SPEAKER_01 0:00

So picture a floor that's just, you know, completely covered in tightly packed dominoes. But instead of just standing next to each other, they're physically tied together by these invisible threads of margin debt. Like one falls in the Middle East and it just forcibly yanks down tech stocks in New York.

SPEAKER_00 0:15

Yeah, exactly. I mean, i there's really no isolating a geopolitical spark in today's highly leveraged system. These standard economic playbooks are just being completely rewritten by military updates at this point.

SPEAKER_01 0:28

Right. And that's exactly what we're looking at today. Welcome to this deep dive into the June 11th, 2026 Pre-market Futures Briefing. This is authored by Eli Levy over at Canon Trading Company, and you can actually reach him directly at Eli at Canon Trading.com.

SPEAKER_00 0:44

Which is a great resource, by the way.

SPEAKER_01 0:45

Oh, totally.

SPEAKER_00 0:45

Yeah.

SPEAKER_01 0:46

And our mission today is really to trace how a single kinetic incident is just disrupting global supply and dictating monetary policy. But uh before we map all this out, I do need to read a quick but crucial disclaimer.

SPEAKER_00 0:57

Go for it.

SPEAKER_01 0:57

Disclaimer. Trading futures, options on futures, and retail off-exchange foreign currency transactions and other financial instruments involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

SPEAKER_00 1:26

Aaron Powell, so let's look at that first domino you mentioned. We had this major overnight escalation involving U.S. strikes on a Pelinon flagged tanker in the Sea of Oman.

SPEAKER_01 1:35

Aaron Powell Right. And that was followed by Tehran retaliating right after a U.S. Apache helicopter went down.

SPEAKER_00 1:41

Aaron Powell Exactly. And that kind of kinetic event immediately threatens the Strait of Hormuz. I mean, that is the world's most critical oil choke point. So the market instantly priced in that supply threat, pushing Brent crude past $93 a barrel.

SPEAKER_01 1:53

Well, okay, wait. I do have to challenge the panic here a little bit. Because historically, we see these tanker flare-ups, right? Oil spikes for maybe 48 hours, and then the market just completely forgets about it.

SPEAKER_00 2:05

Aaron Powell Yeah, that is the usual pattern.

SPEAKER_01 2:07

Right. So why is JP Morgan treating this like a potential permanent shock rather than just, you know, a weekend headline blip?

SPEAKER_00 2:15

Aaron Powell So the issue right now is that global inventories are already sitting near operational stress levels. There's just no buffer to absorb a hit. I mean, Goldman Sachs is taking the optimistic view, predicting vessel traffic normalizes by late June.

SPEAKER_01 2:30

Aaron Powell Okay, but JP Morgan is looking at that lack of buffer and saying what?

SPEAKER_00 2:33

Aaron Powell They're warning that if this disruption extends, Brent Crude could easily hit the 120 to 130 zone. And if it really drags on, they are keeping a 150 scenario completely on the table.

SPEAKER_01 2:44

Aaron Powell 150, wow. So we have oil threatening to hit $150. That immediately bleeds into everyday prices, which, you know, explains the jarring 4.2% jump in the May headline consumer price index.

SPEAKER_00 2:55

Yeah, the briefing notes, a massive 60% of that monthly gain was driven purely by energy.

SPEAKER_01 3:01

60%? That is wild.

SPEAKER_00 3:04

It is. And that specific 4.2% print completely killed the market's recent relief rally. The NASDAQ dropped almost 2%, and we saw traders aggressively dumping Ditcoin and gold.

SPEAKER_01 3:16

Right. And this is the part that I think might really confuse people. Because the briefing also noted the core CPI, which strips out volatile things like food and energy, was actually quite soft at just 0.2%.

SPEAKER_00 3:28

Right. It was practically flat.

SPEAKER_01 3:29

So if the core economy is genuinely cooling off, why are traders just liquidating assets like Bitcoin?

SPEAKER_00 3:35

It really comes down to the mechanics of a liquidity crunch. Like when headline inflation spikes to 4.2%, traders realize the Federal Reserve isn't coming to the rescue with rate cuts. Borrowing costs are going to stay punishingly high.

SPEAKER_01 3:48

Ah, so the brokers step in.

SPEAKER_00 3:50

Exactly. Brokers start demanding more collateral for leverage positions, hitting traders with immediate margin calls.

SPEAKER_01 3:55

And those traders don't sell gold and Bitcoin because they suddenly hate the assets, right?

SPEAKER_00 3:59

No, not at all. They sell them because they're highly liquid and they desperately need cash to cover their margins. It's pure survival mode.

SPEAKER_01 4:06

Aaron Powell That makes so much sense. So that energy-driven headline number basically ties the Fed's hands completely. They look at 4.2% and simply cannot justify a rate cut. Right. Which is why the market is overwhelmingly pricing in a rate hold at the upcoming June 17 FOMC meeting.

SPEAKER_00 4:23

Aaron Powell And the pressure on the Fed is compounding from multiple angles, too. It's not just oil. We are seeing severe supply side constraints across the board.

SPEAKER_01 4:31

Like what?

SPEAKER_00 4:32

Well, take agricultural commodities. Ahead of the USDA's June Was Day report, which is essentially the global gold standard for crop data estimates for U.S. wheat production, have hit their lowest point since 1965.

SPEAKER_01 4:45

Wait, 1965?

SPEAKER_00 4:47

Yeah, 1965.

SPEAKER_01 4:48

That is staggering. So you have severe crop issues squeezing the food supply at the exact same time geopolitical conflict is squeezing the energy supply.

SPEAKER_00 4:56

Which creates an absolute nightmare scenario for central banks. I mean they use interest rates to cool down demand, but they can't print more wheat or force tankers safely through the Sea of Oman.

SPEAKER_01 5:05

No, they really can't.

SPEAKER_00 5:06

The supply side is fundamentally broken.

SPEAKER_01 5:08

Aaron Powell So the big takeaway here from Eli Levy's briefing is that geopolitical supply shocks, not standard domestic economics, are completely dictating our monetary policy right now. Like the first domino falls in the Middle East and it dictates what you pay for a mortgage in Ohio.

SPEAKER_00 5:24

It really leaves us with a critical question about the limits of the tools we rely on to manage the economy.

SPEAKER_01 5:30

Absolutely. If central banks cannot actually control the geopolitical conflicts or crop failures driving our current inflation, have traditional interest rate adjustments lost their power to stabilize the economy? Think about that as you watch the markets this week. And to wrap up, one final time disclaimer. Trading futures, options on futures, and retail off-exchange foreign currency transactions and other financial instruments involve substantial risk of loss and are not suitable for all investors. The past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.