Oil pushed the US long end both ways this week, and I think it's the cleanest look we've had at energy feeding into rates. On 7 October the 30-year touched a 24-year high and the 10-year its highest since 2002, and Reuters tied it to $BZ oil above $100 bringing back worries that inflation stays stubborn. The next day Trump said the US won't attack Iran before the 3 November midterms, and the 10-year closed at 5.22%, down 6bp, with the 30-year at 5.60%, down 7bp.
Underneath that, the ACM model has the expected path of Fed rates down 8.6bp in the week to 7 October while the term premium rose 10.0bp... so the market priced a little less Fed and still asked for more to hold duration.
That long yield is the discount rate for anything without a cash flow, $BTC and $XAU included. September CPI on 14 October is the next print that could move it, and I'll be watching whether the term premium keeps rising if oil cools off.
#Bonds #Rates #Oil #Macro #Gold
Underneath that, the ACM model has the expected path of Fed rates down 8.6bp in the week to 7 October while the term premium rose 10.0bp... so the market priced a little less Fed and still asked for more to hold duration.
That long yield is the discount rate for anything without a cash flow, $BTC and $XAU included. September CPI on 14 October is the next print that could move it, and I'll be watching whether the term premium keeps rising if oil cools off.
#Bonds #Rates #Oil #Macro #Gold