War, Inflation, and Weather into the Weekend: 3 Trades to Consider (June 13, 2025)

AiQ's First Look at Cotton in 2025, a DXY Reversal, and Wheat Buyers Beware

Markets are prescient—something we often forget until the chart reminds us. Crude is up over 20% on the month, climbing like it saw a catalyst coming before the bombs fell. The technicals have shifted decisively: support is at $72, and resistance doesn’t show up until $80 if it can hold these gains.

The new normal is a world where we must ask, “Who knew what and were they trading it?”

Here Are 4 Key Weather Maps Heading into the Weekend—Explanation on Maps

Just as Investors Were Getting Comfortable

The VIX (volatility index) gauges of fear in equity markets Wednesday traded back to its lowest level since mid-March and pre “Spring of Tariffs” excitement. Professional investors have been adding to risk over the last month, after underperforming in Q2, after retail bought the post-Liberation Day dip.

The administration talking about stablecoins and attacking Powell for more rate cuts will look short-sighted and complacent in the event of an inflation rebound if the war escalates—inflation was already bouncing. The spillover into other commodities must be monitored and may open the door for two trades (more on this below.)

This does not bode well for inflation. Energy prices have been one of the few bright spots, helping suppress inflation below its stubborn 2.5-3% new normal. This morning, WTI is > 20% off May 31st lows.

Trump has locked onto rate cuts like a dog with a bone. But here’s the issue: inflation today isn’t being driven by monetary policy. A steeper yield curve might help in some corners—but it’s also stoking inflation expectations.

His repeated calls are adding term premia to long-end bonds, undermining his own agenda. The irony? Trump’s own policy mix is fueling the very inflation he wants the Fed to fight. If this keeps up, the bond market won’t be the only thing delivering a painful lesson by the midterms.

We “borrowed” the meme from Shrub—because let’s be honest, we’re neither better informed on Iran’s next move nor can we compete with elite meme-making. The administration can feign frustration that Israel acted unilaterally while it was mid-good-faith talks with Tehran, and quietly celebrate that a “Tehran TACO” takes the spotlight off those underwhelming “trade deals.”

Stolen from Shrub, Substack here

Three Trade Setups to Consider Post Bombing:

1. The Dollar Finally Has Its Catalyst for a Short-Term Reversal?

2. Wheat Buyers Need to watch Europe over the next 10 days.

3. AiQ’s First Look at Cotton in 2025: Is it Building a Bull Case?