The model predicts that CTAs will buy oil next week. WTI crude oil futures have risen this week as tensions between Israel and Iran persist. Our model indicates that short- and medium-term trend followers are quickly increasing their long positions, while long-term models are either exiting or covering their shorts. We expect trend strength across models to rise in the coming week, leading to more buying activity. Additionally, Soybean and Soybean Oil futures have also increased, driven by new regulations favoring US biofuels over imports (refer to our report, Global Agriculture Strategist: June 18, 2025). Trend followers are already holding long positions in Soybeans and Soybean Oil, with further buying anticipated next week. Conversely, our model shows that CTAs still have short positions in Soybean Meal. In other commodities, trend followers maintain long positions in Gold and copper while being short on Aluminum, with a possibility of covering some Aluminum shorts next week.

In terms of CTA equity and bond positioning, there is a variance depending on the model. Trend follower positions in US equities continue to be mixed based on model strategy, with a long position in EURO STOXX 50 being the consensus among the tracked indices. Slower models may cover short positions in the Russell 2000 significantly next week. In fixed income, CTAs hold small short positions in 10Y Treasury futures, and although the positioning in the 30Y futures is mixed, longer-term trend followers might increase their short positions and potentially cover next week. Larger sales of Korean Treasury Bond futures could also occur.

Despite a gain in the US Dollar this week, primarily triggered by the escalation of the Israel-Iran conflict, this increase has not affected the short positioning of trend followers. Our model indicates that CTAs remain in strong consensus, maintaining maximum USD shorts against EUR, GBP, and MXN—still over 1.4% away from unwinding triggers. Positions in JPY, CAD, and AUD are not as extreme, with JPY selling expected against the USD next week.

As of Wednesday’s close, the SPX gamma was slightly long at approximately $1.7 billion (38th percentile for the year). The gamma profile implies that if equities rise next week, SPX gamma may gradually decrease. Since equities sold off in late February, the SPX gamma has been in a subdued state, and according to our estimates, the recent drop in S&P realized volatility owing to gamma over the past month is just 0.6 points (4% of its level), a relatively minor figure. Within the VIX complex, end-user VIX delta exposure is significantly high (at the 94th percentile for the year)—more details can be found in our daily option positioning report.