**Typhoon Bavi’s approach is the dominant driver of trader positioning.** As of early July 2026, the system is tracking westward toward Taiwan’s southeast, with models favoring a northern passage and closest approach on or around July 10–11. This setup favors increased cloud cover, scattered showers or thunderstorms, and moderated afternoon heating in Taipei, keeping peak readings near the long-term July average of 32–33 °C rather than the hotter 35–36 °C values possible under clear anticyclonic conditions. Official Central Weather Administration guidance and ensemble guidance reflect this, with July 10 forecasts centering on highs near 89 °F (≈32 °C) amid rising rain chances. The tight clustering of market-implied probabilities around 31–32 °C (≈47.5 % combined) versus lower odds for 34 °C+ captures uncertainty in the exact rain timing and steering, while still assigning meaningful weight to scenarios where the typhoon’s outer bands arrive later or miss the peak-heating window.