Sunday Prep:
Navigating the
Liquidity Trap.
The Fed is trapped, yields are at multi-year highs, and the market has been trained to buy every dip. Here's what our desk is watching this week — and why we are being extremely selective.
Pete Currey
Head of Trading, Drawdown
01 / The Macro Reality
The Fed Is Trapped. Here's What That Means.
Inflation is still sticky. Growth is slowing. And Jerome Powell has exactly zero attractive options. This week's PCE print will be critical — if it comes in hot, we expect a risk-off flush across equities and a renewed DXY bid. If it misses, the market will price in rate cuts it probably won't get.
Either way, we are not chasing either move. The asymmetric risk is to the downside in equities and to the upside in USD until we see genuine evidence of disinflation in services.
02 / Levels That Matter
The Exact Levels Our Desk Is Watching.
On the S&P 500, the key level to watch is the weekly open at 5,342. A clean break and hold below this level confirms the bearish momentum. Our target for the first push lower is 5,248, a prior weekly high that should now act as support/resistance.
On EUR/USD, the 1.0850 level is the make-or-break. A daily close below here will open up a move toward parity territory by end of Q2, consistent with our macro thesis of prolonged USD strength.
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- Full macro reality breakdown
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- The behavioural nudge
- Post-session debrief (Friday)
Not Financial Advice
Pete's Memo is framed as market perspective, process, and structured thinking. It is explicitly not a signal service or financial advice. Trading involves significant risk. You are responsible for your own capital.