Assesses global trade intensity and capital flows by combining USD regime signals, macro positioning (e.g., supply stress), and speculative risk tone to characterise how currency dynamics and demand conditions influence cross-border trade and investment activity.

Global Trade and Demand

Regime Assessment:

Regime: Expansionary / Risk-Positive
Regime Confidence Index: Medium Confidence
Stability: Fragile

Why This Regime:

The dominant drivers for this regime are the weakening U.S. dollar and broad risk-on speculative positioning.
The USD Index Signal is Bearish, indicating a weakening U.S. dollar due to the index trading below its 12-month moving average (9). This signal carried a High Aggregation Weight, High Conviction, and High Confidence, operating on a Cyclical time horizon.
Concurrently, the Global Risk-On / Risk-Off Positioning Tone signal shows a "Risk-On" regime, reflecting an expansion of speculative appetite (1). This signal received a Medium Aggregation Weight and High Confidence.
The combined influence of easing financial conditions from a weakening USD and positive speculative sentiment strongly supports an Expansionary / Risk-Positive outlook.
The Regime-Specific Macro Themes signal was significantly downweighted due to its Low Confidence and Internal Conflict Flag (5). Its partial classification of "Supply_Stress" did not override the dominant, higher-weighted signals.

Alignment & Tensions:

Signals reinforce each other as the "Risk-On" positioning tone (1) is consistent with a weakening USD environment (9). A depreciating dollar typically eases global financial conditions and encourages risk-taking.
Tensions exist with the "Supply_Stress" theme identified by the Regime-Specific Macro Themes signal (5). This indicates potential physical market tightness in Energy or Agriculture.
These tensions do not overturn the regime call. The "Supply_Stress" signal's low weighting, low confidence, and internal conflicts mean it is not robust enough to counter the clear directives from the higher-weighted and more confident signals. Its impact is more tactical, while the USD signal is cyclical.

Scenario Balance:

Dominant scenario: Continued Expansionary / Risk-Positive conditions, sustained by broad speculative risk appetite and a weakening U.S. dollar.
Primary upside risk: A further decline in the U.S. dollar, coupled with an acceleration into a "Strong Risk-On" speculative environment.
Primary downside risk: Escalation of "Supply_Stress" to a broader inflationary impulse, or a sudden reversal in speculative sentiment towards "Risk-Off."

What Would Change the Regime:

The USD Index rising above its 12-month moving average, or its 6-month change exceeding +5%, would invalidate the current Bearish USD signal (9).
The CoT Market Tone robust z-score falling below 0.5 would invalidate the "Risk-On" interpretation (1).
A significant and confirmed increase in `hedger_deep_long_share` across Energy and Ags, combined with broader speculative long crowding, leading to a confident "Inflation_Impulse" theme (5).

Inputs

Global Positioning Tone

Signal Summary:

The CoT Market Tone signal is currently in a "Risk-On" regime as of 2026-01-20 (1).
This indicates an expansion of speculative appetite.
Conviction Band: Medium, Interpretation Confidence: High Confidence, Internal Conflict Flag: No.

Key Dynamics:

The `net_tone` metric, representing the difference between crowded long and crowded short shares, registered 0.019074 (1).
This positive shift pushed the robust z-score to 0.533811, moving the signal from "Neutral" to "Risk-On" (1).
No internal offsets or tensions are observed.
Conditional Invalidation: The "Risk-On" interpretation would be invalidated if the CoT Market Tone robust z-score falls below 0.5.

Scenario Balance:

Base Case dominant: Continued "Risk-On" sentiment, supported by sustained positive net speculative positioning.
Upside secondary: A transition to "Strong Risk-On", driven by further relative increases in crowded long positions.
Downside residual: A reversion to "Neutral" or "Risk-Off" if net long crowding diminishes significantly.

Time Horizon & Aggregation:

Time Horizon: Tactical (weeks), reflecting near-term shifts in speculative positioning from weekly CoT data (1).
Aggregation Weight Hint: Medium, as this signal is a valuable gauge of broad speculative sentiment and tactical market shifts.

Macro Relevance:

This signal primarily informs macro dimensions of Sentiment and Liquidity.
It is sensitive to shifts across all cycle positions.
It typically interacts with volatility signals (2) or credit conditions (3) to confirm risk regime transitions and contributes to cross-asset positioning composites (4).

Data & References:

`df_cot_tone_daily` (CoT data) as of 2026-01-20 (1).
The `net_tone` of 0.019074 and `CoT_Market_Tone_z` of 0.533811 for 2026-01-20 were most influential (1).
Additional public datasets that would improve depth: VIX (2) and global equity index performance.

Global Positioning Tone

Regime Specific Macro Themes

Signal Summary:

For the latest date of 2026-01-20, only the "Supply_Stress" macro theme is currently active, indicating potential physical tightness in Energy or Agricultural markets (1). Other themes, "Inflation_Impulse" and "Global_Slowdown," are not active based on available data, while "Disinflation" cannot be fully assessed due to missing components.
The signal is in a state of partial classification. Conviction Band: Low | Interpretation Confidence: Low Confidence | Internal Conflict Flag: Yes.

Key Dynamics:

The "Supply_Stress" theme is driven by hedgers being deeply long in Energy markets, with a `hedger_deep_long_share` of 0.214286 (exceeding 0.20) on 2026-01-20 (1). This share increased from 0.178571 on 2026-01-13, showing rising physical market stress.
A key tension arises from the inability to evaluate the "Disinflation" and "Global_Slowdown" themes due to the absence of explicit overall market breadth data (`cl_total`, `cs_total`, `net_tone`) in the provided tables (1).
Conditional Invalidation: The "Supply_Stress" theme would be invalidated if the `hedger_deep_long_share` in both Energy and Ags sectors falls below 0.20 (1).

Scenario Balance:

Base Case dominant: Continued Supply Stress, supported by persistent commercial hedger long positioning in Energy, implying ongoing physical market tightness.
Upside secondary: An unexpected broad increase in speculative long crowding across Energy and Metals could activate an "Inflation_Impulse" theme (1).
Downside residual: A significant rise in speculative short positioning in Metals, combined with a broad risk-off sentiment, could trigger a "Global_Slowdown" theme (1).

Time Horizon & Aggregation:

Time Horizon: Tactical (weeks). The signal relies on weekly CoT data and immediate breadth conditions (1).
Aggregation Weight Hint: Low. The signal's incomplete assessment capability due to missing data reduces its utility and composite weighting.

Macro Relevance:

Macro dimension informed: Primarily informs Supply dynamics and potential Pricing pressures (1).
Cycle position: It flags specific thematic pressures within the broader economic cycle.
Typical interaction with other macro signals: Provides commodity positioning context for inflation measures (2), global growth indicators (3), and other commodity-specific signals (4).

Data & References:

Sector Theme and Theme Continuous tables from 2026-01-06 to 2026-01-20.
The `hedger_deep_long_share` for Energy (0.214286 on 2026-01-20) was most influential for the "Supply_Stress" theme (1).
The explicit overall market breadth data (`crowded_long_share`, `crowded_short_share`, `net_tone` for total markets) would significantly enhance the signal's reliability and enable full theme evaluation (1).

Regime Specific Macro Themes

USD Index Signal

Signal Summary:

The USD Index Signal remains in a Bearish regime as of 2026-01-01, indicating a weakening U.S. dollar (1). The current state reflects a continued transition from previous bullish phases.
Conviction Band: High | Interpretation Confidence: High Confidence | Internal Conflict Flag: No

Key Dynamics:

The primary driver for the Bearish signal is the Broad U.S. Dollar Index (Value_Monthly: 120.4478) remaining below its 12-month moving average (122.277133) (1).
The 6-month change in the USD Index is -1.36%, which, while negative, is not below the -5% threshold for a more aggressive Bearish classification (1).
Conditional Invalidation: The signal would reverse to Bullish if the Broad U.S. Dollar Index rises above its 12-month moving average, or if its 6-month change exceeds +5% (1).

Scenario Balance:

Base Case dominant: Continued USD weakness is expected as the index consistently trades below its long-term average.
Upside secondary: A sustained rebound in the USD Index, pushing it above its 12-month MA, could shift the signal to Bullish.
Downside residual: Further significant negative momentum (e.g., 6-month change falling below -5%) would confirm deeper USD depreciation.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months). The signal relies on 6-month momentum and a 12-month moving average for its classification (1).
Aggregation Weight Hint: High. The U.S. dollar's direction is a critical macro input influencing global financial conditions and asset prices.

Macro Relevance:

Macro dimension informed: Liquidity, pricing, sentiment. A weakening USD typically suggests easing financial conditions globally (1).
Cycle position: Mid-cycle, as the signal oscillates between bullish and bearish within a broader trend.
Typical interaction with other macro signals: Often inversely correlated with commodity prices and emerging market assets, and influences inflation dynamics (1).

Data & References:

FRED DTWEXBGS (Broad U.S. Dollar Index), latest observation 2026-01-01.
The `Value_Monthly` (120.4478) relative to `USD_12Month_MA` (122.277133) are most influential for the current state.
Additional public datasets that would improve depth or reliability: Real Interest Rate Trend Signal (2), Federal Reserve Liquidity Composite Signal (3).

USD Index Signal