Oil's 10% crash on a Hormuz peace deal reshapes the macro backdrop — bullish for risk assets, but Fed hawkishness and China's June 15 minerals cliff demand caution.

Us Session Recap

US equities closed mixed with a tech-laggard rotation. SPY settled at $745.64 while QQQ slid to $717.54, suggesting rotation out of high-beta tech into cyclicals as oil's collapse eases inflation premiums. The 10-year Treasury yield popped to 4.56%, signaling bond vigilantes remain alive despite the commodity relief. VIX held a contained 16.70 — not panic, but not complacency. Traders on X flagged the oil-driven energy sector unwind as the key event risk clearing, with the "reflation trade" losing steam.

China Watch

X traders are buzzing about the yuan at a three-year high (6.83 USD/CNY), with BoA targeting 6.70 by year-end. Foreign inflows hit $29B in April alone ($72B YTD) — the 5th-largest monthly haul on record. Goldman, Morgan Stanley, and Franklin Templeton are overweight China for H2. But here's the contrarian angle: Shanghai Composite remains 33% below its 2007 peak while every other major index hit all-time highs. That's a valuation discount that institutional money is finally waking up to.

Risk Flag

New Fed Chair Kevin Warsh holds his first FOMC June 16-17. April minutes showed "rate hike bias" with CPI still sticky at ~4%. If Warsh signals hawkishness, the dollar strengthens and the yuan rally reverses — that kills the China equity inflow thesis instantly.

Trade Signal

Long KWEB ($26.91) via July $27 calls. A-shares have momentum, cheap valuations, and foreign tailwinds. The Hormuz peace deal removes oil tail-risk that was squeezing EM. Size to 5-8% of portfolio. Take profits if Warsh turns hawkish or yuan breaks 7.00.