International Market Intelligence Morning Briefing

Markets are erratic as the Equity Risk Premium hits a post-GFC low of 2.2%, making equities highly sensitive to bond yields and threatening the 'Momentum' trade. Meanwhile, a de-escalation in geopolitics and strong Tech performance, particularly in Asia, are providing temporary support.

Key Takeaways

• 1.The Equity Risk Premium (ERP) has reached a post-GFC low of 2.2%, suggesting limited room for bond yields to rise before they negatively impact equity markets.
• 2.The Momentum factor is facing significant reversal risks, with high rates acting as 'Kryptonite' for the factor and positioning at extreme 5-year highs.
• 3.Central banks are exhibiting a hawkish lean; FOMC minutes show a majority considering policy firming if inflation persists, while the BOJ signals rate hike support.

Table of Contents

• IDEA & INSIGHTS – IN BRIEF
• IDEAS & INSIGHTS – IN DETAIL
• SALES & TRADING: GLOBAL CHINA SUMMIT 2026 – THE MACRO NARRATIVE
• OVERNIGHT RECAP
• POSITIONING INTELLIGENCE
• J.P. Morgan Global Market Intelligence Contacts

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