Copper hit records. Bonds smell a hike.

Transcript

Tom Alright, London — copper at records, bonds pricing a hike, and software CEOs can finally exhale? Let's break it down.

Marie I'm Marie, this is Investment Flash, London Edition, Wednesday September ninth. Tom's here, Gerald's here, and the macro is doing something weird — let's get into it.

Gerald Okay, the morning's biggest tension is rates. Treasury yields up, but the dollar fell — that's not supposed to happen if the Fed is hiking on strong jobs.

Tom Right, and the yen is surging on the same move. Carry trades are getting squeezed, and that hits bitcoin and risk assets across the board.

Marie So the long-duration Treasury ETF is sitting one percent above its fifty-two-week low — everyone is already short duration. That's crowded. The dollar leg is less obvious, but the dollar ETF is only two percent below its high.

Gerald Yesterday I said sell long-duration Treasuries. Today that looks even better on paper, buddy. But honestly, when a trade is that crowded, I start looking for the exit before the stampede.

Tom No way, Gerald — the move's just getting started. If the Fed hikes next week, the long end has further to fall.

Marie But the dollar falling alongside higher yields is weird. It suggests the market is pricing oil into the inflation path, not just jobs. That's a different regime.

Gerald Exactly — that's the thing. Shorting the long-duration Treasury ETF here is like shorting something already at the bottom. I'd rather short the dollar and the yen crosses.

Tom So sell the dollar ETF and sell dollar-yen. Fine, but the rates story is still the big one for me.

Marie Then there's copper. Records on both US and UK exchanges, tariff fears, supply tightness — and CoinDesk is adding AI demand on top. The copper ETF is one percent below its high.

Tom And Freeport-McMoRan is up forty-seven and a half percent year to date. Buddy, that's a freight train, and it's only five percent from its fifty-two-week high.

Gerald Look, copper's supply story hasn't broken, but Freeport at forty-seven percent year to date? The easy rerating is done. I'd rather own the copper ETF than chase the miner.

Marie Fair point, but the tariff distortion isn't going away this week. If anything, the squeeze gets worse before it gets better.

Tom And remember yesterday? We had a buy on the copper tracker. It's up again, and the copper squeeze is the one trade holding the macro tension together.

Gerald Ha — you called copper, I'll give you that. But if bonds are smelling a hike, the dollar should be stronger, not weaker. That tells me this is more about physical shortage than macro.

Tom Exactly.

Gerald Right, right.

Marie That's the whole story.

Marie Okay, shift gears. WSJ's Asa Fitch says AI disruption is hitting software slower than feared. Salesforce and Workday are being pummelled, but the financials still hold.

Tom Salesforce fell three point nine percent last session, Workday four point nine. Workday's now twenty-five percent below its high at fourteen times forward earnings. That's cheap for a software name with a sticky base.

Gerald Cheap? Fourteen times forward for a company whose growth is decelerating into an AI wave? That's not cheap, that's a value trap until proven otherwise.

Marie But if the AI disruption timetable keeps slipping right, the pummelling looks overdone. Both names are showing financial strength. I'm more constructive than you, Gerald.

Tom See, Gerald — even Marie is on the growth side today. Buy Salesforce, buy Workday, maybe the software ETF if you want broad exposure.

Gerald Alright, I'll give you the low bar: if AI fears don't materialise, the snapback is violent. But I'm watching the next quarter's guidance, not the share price.

Marie Citi's quant work is interesting: US stocks usually stumble after the first Fed hike, while Japan and UK equities average two to three percent relative outperformance.

Gerald Japan's already up twenty point four percent year to date, one percent from its high. The easy money's been made. But UK equities? The UK ETF is only two percent below its high and lagged — that's the better relative trade.

Tom Japan's my favourite, buddy — it's a momentum machine. But I'll take the UK exposure as a value hedge. The UK ETF does have more room.

Marie Hold on — Citi's saying relative rotation, not absolute US shorting. So you hold the S&P 500 ETF, but you add Japan and UK. That's a clean way to express the post-hike regime.

Gerald Exactly. And if the Fed doesn't hike, the trade still works — those markets have structural reasons to catch up.

Tom Fair enough. S&P 500 ETF hold, Japan ETF buy, UK ETF buy. Got it.

Gerald The UK just paid its highest borrowing cost since 1998 at a thirty-year gilt auction. Thirty-year yields at five point eight two percent. That's not a typo.

Marie And the FT is all over it. The UK long gilt ETF is down three point three percent year to date, and the long end is still bleeding. The global bond sell-off is now hitting public finances directly.

Tom So sell UK long gilts? Gerald, your bond doom-loop returns.

Gerald Ha — fair. But this isn't doom, it's math. When a government pays the highest in decades to borrow, the short on long duration is the cleanest expression.

Marie And it's not just the UK. This is the same story as US rates, but with a fiscal twist. Long-end weakness is global.

Tom Right — so the trade is sell the UK long gilt ETF. Fine, I'll add it to the short-duration basket.

Marie Crypto is splitting in a way that matters. Bitcoin slipped to seventy-eight thousand eight seventy-four, BNB chain tokens bucked the selloff, and CoinDesk ties it all to that yen rally and higher yields.

Tom And then there's the Cronos rollback. Validators rewrote nearly two hours of chain history to recover one hundred eleven million dollars, leaving attackers with only nine point one nine million.

Gerald That's the most original take today, honestly. If validators can reverse an attack, what exactly is immutable? The money recovery is real, but the governance precedent may matter more.

Marie No but that's exactly my point — this is a state rollback on a supposedly decentralised network. It's a fork in the industry's road, and nobody's pricing that risk.

Tom Exactly.

Gerald That's the whole thing.

Marie Spot on.

Tom For real, though — BNB relative strength is the alpha here. Sell bitcoin, sell Cronos, buy BNB. Selective exposure, not index-level direction.

Gerald Sell Cronos makes sense to me, but buying BNB on relative strength alone? That's a momentum call, not a fundamental one. Fine, but size it small.

Marie The divergence argues for selective crypto exposure. I agree with Tom on BNB, but I want to see volume confirmation before I call it a trend.

Tom Defense is getting a nod from UBS — they say a major defense company has earnings upside investors are not appreciating. CNBC hides the name, but the sector's got room.

Gerald The defense ETF is thirteen percent below its high, Lockheed Martin twenty-three percent below at sixteen times forward earnings. That's a value guy's playground.

Marie Hold on — the headline hides the name, so conviction is low. But the direction is clear: buy the defense ETF, maybe Lockheed if you want a single name.

Tom Lockheed's the likely candidate. Sixteen times forward, twenty-three percent below its high — that's a re-rating waiting for a catalyst.

Gerald Alright, I'll take the defense ETF for the diversification. Lockheed is fine, but the sector's been left behind for a reason. Let's see the earnings.

Marie VodafoneZiggo sold tower assets for six hundred seventy million euros to a DigitalBridge-led consortium. Liberty Global gets a cleaner balance sheet ahead of the Ziggo spinoff.

Gerald Liberty Global is twenty-one percent below its high and trading at zero point four times book. Debt reduction can unlock value — that's the deleveraging candidate.

Tom Vodafone's stake benefits modestly, but the stock is already up twenty-six point four percent year to date. Most of the move's in the price, so hold Vodafone.

Marie The tower sale is small, but it's the signal — deleveraging is back in favour. Liberty Global is the cleaner expression.

Gerald South Korea's budget office says stablecoins could save merchants three point eight billion dollars a year, but they'd disintermediate banks. That's a structural risk hiding in a payments story.

Marie The South Korea ETF is up eighty-five point eight percent year to date, fourteen percent below its high. Korea beta is already hot. The stablecoin risk is real but distant — watch, don't short.

Tom Regional banks too — the regional banks ETF is five percent below its high. This is a global echo, but it's not an action item today.

Tom Uber is going for a Hong Kong operator licence by end of October. Macau users were the largest non-local riders. That's a major Asian market opening.

Marie Uber is down eleven point seven percent year to date, twenty-eight percent below its high at sixteen point six times forward earnings. A regulatory green light could re-rate the name hard.

Gerald Regulatory approval is the key word. If it goes through, Uber gets a new growth leg. But Hong Kong is notorious for taxi politics.

Tom I'm buying Uber here — the valuation has already compressed, and any positive news is a catalyst.

Marie Before we wrap the view, as always, none of this is investment advice.

Marie Here's our view. The dominant tension is a bond market repricing the Fed while a commodity boom refuses to blink. Yields up, dollar down, copper at records. That's a market trying to hold two opposite regimes at once.

Gerald The bear case is positioning is already where the story points. The long-duration Treasury ETF at its fifty-two-week low means short-duration is the crowd. Freeport up forty-seven and a half percent, the South Korea ETF up eighty-five point eight. Crowded trades unwind fast if Friday's jobs data softens.

Tom But what's missing is energy beyond oil's effect on yields. Copper is covered, but oil's rise into the hike-odds narrative gets only a passing mention. If oil stays elevated, the rate path is not just about jobs.

Marie Exactly — nobody is pricing the second-round inflation leg. That's the blind spot.

Gerald So our cleanest expression is not one ticker, it's relative value. Long copper-producing equities funded by short long-duration Treasuries. That captures both sides without paying for crowded single-name shorts.

Tom I like that — copper plus short treasuries. It's the macro pair trade.

Marie That's the London Edition for today. If you're just finding us, hit follow on Spotify — or check investmentflash.com for the full digest with charts and sources.

Gerald We're back with the New York Edition, later today at nine a.m. New York time. Don't miss it.

Tom See you there, buddies.