KlineCode
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The trend has taken shape. On September 24, I wrote that the U.S. was raising rates while Japan was tightening liquidity, and that U.S. stocks and Treasuries could only protect one of them. Now it looks like they can barely protect either. The Nasdaq has been hit by a huge monthly candle—this is no longer how a correction behaves.
The driving force is still the same underlying theme. Money from around the world is borrowing cheap yen to buy U.S. stocks. The dollar-yen exchange rate has fallen from around 164 to 156. As the yen strengthens, both borrowing costs and the pressure to repay rise, leaving investors with no choice but to sell stocks and buy yen to pay back their loans. Even if the Fed keeps injecting liquidity, it can’t stop this deleveraging from feeding on itself, because liquidity injections can’t hold down both the exchange rate and inflation.
The October 22 selloff played out the whole chain reaction. The Nasdaq fell 2.6% to close at 26,008.86, its biggest one-day drop since June. The Philadelphia Semiconductor Index fell 6.72%, and Nvidia lost about 1.5 trillion yuan in market value overnight. Meta fell nearly 7%; its third-quarter free cash flow turned negative for the first time in more than a decade. Amazon also lowered its capital expenditure target. The AI sector is starting to run out of money to burn. Bitcoin fell below $81,000, down 4.3% in 24 hours. Spot gold fell 2.79%, slipping below $4,050, while silver dropped to $54.58. Safe-haven buying briefly pushed the 10-year Treasury yield back below 5%, but Brent crude surged past $113. With oil prices rising again and inflation still a headwind, easing policy will only get harder.
From here, I’m sticking with this view: the decline in U.S. stocks isn’t over. As long as the yen keeps strengthening, carry trades will keep unwinding. Even the AI giants are cutting back on spending, and the most highly valued stocks will be the first to buckle. Let’s talk about a bottom only when the Nasdaq closes back above 26,700. Until then, treat every rebound as a brief flicker before the lights go out.
$BTC #美股 #黄金 #Yen
The trend has taken shape. On September 24, I wrote that the U.S. was raising rates while Japan was tightening liquidity, and that U.S. stocks and Treasuries could only protect one of them. Now it looks like they can barely protect either. The Nasdaq has been hit by a huge monthly candle—this is no longer how a correction behaves.
The driving force is still the same underlying theme. Money from around the world is borrowing cheap yen to buy U.S. stocks. The dollar-yen exchange rate has fallen from around 164 to 156. As the yen strengthens, both borrowing costs and the pressure to repay rise, leaving investors with no choice but to sell stocks and buy yen to pay back their loans. Even if the Fed keeps injecting liquidity, it can’t stop this deleveraging from feeding on itself, because liquidity injections can’t hold down both the exchange rate and inflation.
The October 22 selloff played out the whole chain reaction. The Nasdaq fell 2.6% to close at 26,008.86, its biggest one-day drop since June. The Philadelphia Semiconductor Index fell 6.72%, and Nvidia lost about 1.5 trillion yuan in market value overnight. Meta fell nearly 7%; its third-quarter free cash flow turned negative for the first time in more than a decade. Amazon also lowered its capital expenditure target. The AI sector is starting to run out of money to burn. Bitcoin fell below $81,000, down 4.3% in 24 hours. Spot gold fell 2.79%, slipping below $4,050, while silver dropped to $54.58. Safe-haven buying briefly pushed the 10-year Treasury yield back below 5%, but Brent crude surged past $113. With oil prices rising again and inflation still a headwind, easing policy will only get harder.
From here, I’m sticking with this view: the decline in U.S. stocks isn’t over. As long as the yen keeps strengthening, carry trades will keep unwinding. Even the AI giants are cutting back on spending, and the most highly valued stocks will be the first to buckle. Let’s talk about a bottom only when the Nasdaq closes back above 26,700. Until then, treat every rebound as a brief flicker before the lights go out.
$BTC #美股 #黄金 #Yen
The driving force is still the same underlying theme. Money from around the world is borrowing cheap yen to buy U.S. stocks. The dollar-yen exchange rate has fallen from around 164 to 156. As the yen strengthens, both borrowing costs and the pressure to repay rise, leaving investors with no choice but to sell stocks and buy yen to pay back their loans. Even if the Fed keeps injecting liquidity, it can’t stop this deleveraging from feeding on itself, because liquidity injections can’t hold down both the exchange rate and inflation.
The October 22 selloff played out the whole chain reaction. The Nasdaq fell 2.6% to close at 26,008.86, its biggest one-day drop since June. The Philadelphia Semiconductor Index fell 6.72%, and Nvidia lost about 1.5 trillion yuan in market value overnight. Meta fell nearly 7%; its third-quarter free cash flow turned negative for the first time in more than a decade. Amazon also lowered its capital expenditure target. The AI sector is starting to run out of money to burn. Bitcoin fell below $81,000, down 4.3% in 24 hours. Spot gold fell 2.79%, slipping below $4,050, while silver dropped to $54.58. Safe-haven buying briefly pushed the 10-year Treasury yield back below 5%, but Brent crude surged past $113. With oil prices rising again and inflation still a headwind, easing policy will only get harder.
From here, I’m sticking with this view: the decline in U.S. stocks isn’t over. As long as the yen keeps strengthening, carry trades will keep unwinding. Even the AI giants are cutting back on spending, and the most highly valued stocks will be the first to buckle. Let’s talk about a bottom only when the Nasdaq closes back above 26,700. Until then, treat every rebound as a brief flicker before the lights go out.
$BTC #美股 #黄金 #Yen
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In this round of reserve releases, it’s not about how much price pressure you can apply—it’s because inventories are already at rock bottom. There aren’t many people who truly want to drive prices down.
The U.S. will take at most 40 million barrels in this round; it’s the wrap-up of the March phase. Strategic reserves have been drawn down to 283.8 million barrels. The last time it was this low was October 1982. There’s only about 30 million barrels of buffer left above the legal minimum.
What’s really constraining things is refining—not crude oil. Refineries in Europe have been shut down or idled; in Russia, refineries have been hit by drones, knocking out nearly 30%. Gulf Coast refining capacity has also been badly affected. Globally, the amount of oil that can be refined has been steadily shrinking.
In the first 20 days this time, the G7 is putting out diesel—not crude oil. The shortage has always been refined product, not crude.
The bottleneck is also on the export side. Russian diesel is limited until October 31, gasoline until January next year. In China, refined product exports were paused in October—cutting global supplies by about 31 to 46 million barrels per month. With reserve releases and export curbs coming at the same time, it can’t hold out for long.
There’s another layer that gets less attention: neither side treats inflation as the number-one enemy. Countries with heavy debt want to dilute their debt via inflation. And those trying to keep factories running also don’t want prices to collapse—so they have limited ability to push for lower prices.
The smoothest route here is items that don’t earn interest. On Monday, gold returned to around $4,152; silver is near $61; and Bitcoin has risen above $86,000. But last week, gold fell 3.68% and silver dropped 6.77%. The dollar and interest rates haven’t eased yet.
As the market continues moving downward, the direction still points upward. Both Brent above $101 and U.S. oil around $90 have been falling. Saudi Aramco cut its November price to Asia to the lowest in six years. The fact that they’re willing to sell at those levels suggests inventories aren’t thick. With both refining and exports constrained, prices can’t be held down—this pullback is essentially buying time.
The variable lies in refining, not crude. In the last week of September, exports were higher on four days than before the war. Yet crude can move, but refining can’t keep up—diesel remains tight. Since the refining bottleneck can’t be made up, oil prices can’t be pushed down.
$BTC #原油 #柴油 #通胀
In this round of reserve releases, it’s not about how much price pressure you can apply—it’s because inventories are already at rock bottom. There aren’t many people who truly want to drive prices down.
The U.S. will take at most 40 million barrels in this round; it’s the wrap-up of the March phase. Strategic reserves have been drawn down to 283.8 million barrels. The last time it was this low was October 1982. There’s only about 30 million barrels of buffer left above the legal minimum.
What’s really constraining things is refining—not crude oil. Refineries in Europe have been shut down or idled; in Russia, refineries have been hit by drones, knocking out nearly 30%. Gulf Coast refining capacity has also been badly affected. Globally, the amount of oil that can be refined has been steadily shrinking.
In the first 20 days this time, the G7 is putting out diesel—not crude oil. The shortage has always been refined product, not crude.
The bottleneck is also on the export side. Russian diesel is limited until October 31, gasoline until January next year. In China, refined product exports were paused in October—cutting global supplies by about 31 to 46 million barrels per month. With reserve releases and export curbs coming at the same time, it can’t hold out for long.
There’s another layer that gets less attention: neither side treats inflation as the number-one enemy. Countries with heavy debt want to dilute their debt via inflation. And those trying to keep factories running also don’t want prices to collapse—so they have limited ability to push for lower prices.
The smoothest route here is items that don’t earn interest. On Monday, gold returned to around $4,152; silver is near $61; and Bitcoin has risen above $86,000. But last week, gold fell 3.68% and silver dropped 6.77%. The dollar and interest rates haven’t eased yet.
As the market continues moving downward, the direction still points upward. Both Brent above $101 and U.S. oil around $90 have been falling. Saudi Aramco cut its November price to Asia to the lowest in six years. The fact that they’re willing to sell at those levels suggests inventories aren’t thick. With both refining and exports constrained, prices can’t be held down—this pullback is essentially buying time.
The variable lies in refining, not crude. In the last week of September, exports were higher on four days than before the war. Yet crude can move, but refining can’t keep up—diesel remains tight. Since the refining bottleneck can’t be made up, oil prices can’t be pushed down.
$BTC #原油 #柴油 #通胀
The U.S. will take at most 40 million barrels in this round; it’s the wrap-up of the March phase. Strategic reserves have been drawn down to 283.8 million barrels. The last time it was this low was October 1982. There’s only about 30 million barrels of buffer left above the legal minimum.
What’s really constraining things is refining—not crude oil. Refineries in Europe have been shut down or idled; in Russia, refineries have been hit by drones, knocking out nearly 30%. Gulf Coast refining capacity has also been badly affected. Globally, the amount of oil that can be refined has been steadily shrinking.
In the first 20 days this time, the G7 is putting out diesel—not crude oil. The shortage has always been refined product, not crude.
The bottleneck is also on the export side. Russian diesel is limited until October 31, gasoline until January next year. In China, refined product exports were paused in October—cutting global supplies by about 31 to 46 million barrels per month. With reserve releases and export curbs coming at the same time, it can’t hold out for long.
There’s another layer that gets less attention: neither side treats inflation as the number-one enemy. Countries with heavy debt want to dilute their debt via inflation. And those trying to keep factories running also don’t want prices to collapse—so they have limited ability to push for lower prices.
The smoothest route here is items that don’t earn interest. On Monday, gold returned to around $4,152; silver is near $61; and Bitcoin has risen above $86,000. But last week, gold fell 3.68% and silver dropped 6.77%. The dollar and interest rates haven’t eased yet.
As the market continues moving downward, the direction still points upward. Both Brent above $101 and U.S. oil around $90 have been falling. Saudi Aramco cut its November price to Asia to the lowest in six years. The fact that they’re willing to sell at those levels suggests inventories aren’t thick. With both refining and exports constrained, prices can’t be held down—this pullback is essentially buying time.
The variable lies in refining, not crude. In the last week of September, exports were higher on four days than before the war. Yet crude can move, but refining can’t keep up—diesel remains tight. Since the refining bottleneck can’t be made up, oil prices can’t be pushed down.
$BTC #原油 #柴油 #通胀
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Reserves are being released, yet inventories are running outThis round of oil release is quite dramatic—it’s more like digging into the deepest stockpiles. On October 2, the G7 said it would release up to 100 million barrels of diesel and crude oil over four months, with the first twenty days mainly focusing on diesel. Earlier this week, the U.S. Department of Energy also announced it would, via swaps, put up to 40 million barrels of strategic reserves into the market, and said this is the final batch of the 172 million barrels planned as promised since March.
The reserves themselves are also running low. In the week of September 25, U.S. strategic petroleum reserves fell to 283.8 million barrels—the lowest since October 1982. With the statutory minimum operating threshold at 252.4 million barrels, there’s only about a 30 million barrel buffer left. A government accountability report said that because of salt cavern construction and malfunctions, more than a quarter of the reserve crude oil can’t be extracted. The fact that they’re willing to pull out the household cash is itself evidence that commercial inventories are already tight. Right now, the global daily crude supply shortfall is about 1.8 million barrels. Releasing reserves can only temporarily pressure prices and cannot solve supply disruptions caused by geopolitical conflicts.
Reserves are being released, yet inventories are running out
This round of oil release is quite dramatic—it’s more like digging into the deepest stockpiles. On October 2, the G7 said it would release up to 100 million barrels of diesel and crude oil over four months, with the first twenty days mainly focusing on diesel. Earlier this week, the U.S. Department of Energy also announced it would, via swaps, put up to 40 million barrels of strategic reserves into the market, and said this is the final batch of the 172 million barrels planned as promised since March.
The reserves themselves are also running low. In the week of September 25, U.S. strategic petroleum reserves fell to 283.8 million barrels—the lowest since October 1982. With the statutory minimum operating threshold at 252.4 million barrels, there’s only about a 30 million barrel buffer left. A government accountability report said that because of salt cavern construction and malfunctions, more than a quarter of the reserve crude oil can’t be extracted. The fact that they’re willing to pull out the household cash is itself evidence that commercial inventories are already tight. Right now, the global daily crude supply shortfall is about 1.8 million barrels. Releasing reserves can only temporarily pressure prices and cannot solve supply disruptions caused by geopolitical conflicts.
The reserves themselves are also running low. In the week of September 25, U.S. strategic petroleum reserves fell to 283.8 million barrels—the lowest since October 1982. With the statutory minimum operating threshold at 252.4 million barrels, there’s only about a 30 million barrel buffer left. A government accountability report said that because of salt cavern construction and malfunctions, more than a quarter of the reserve crude oil can’t be extracted. The fact that they’re willing to pull out the household cash is itself evidence that commercial inventories are already tight. Right now, the global daily crude supply shortfall is about 1.8 million barrels. Releasing reserves can only temporarily pressure prices and cannot solve supply disruptions caused by geopolitical conflicts.
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This time, only one can be saved: U.S. stocks and U.S. TreasuriesThe U.S. is raising interest rates, and Japan is also tightening liquidity. How will the U.S.-Japan interest rate spread change? That determines which market—stocks or bonds—will be the first to give out. These are the choices in front of us: continue raising rates, or first protect the government bond market.
Only if the U.S. continues raising interest rates and the U.S.-Japan spread widens can U.S. stocks hold on for a while, propped up by cheap yen. In that case, U.S. Treasuries are the first to fall. If the U.S. and Japan both act at the same time and the spread stays the same, U.S. stocks may hold up a bit before heading lower; U.S. Treasuries will still be hurt. The hardest scenario is when Japan raises rates more than the U.S.—the spread narrows and global capital moves back in unison. With these two legs—stocks and bonds—official policy can only protect one.
This time, only one can be saved: U.S. stocks and U.S. Treasuries
The U.S. is raising interest rates, and Japan is also tightening liquidity. How will the U.S.-Japan interest rate spread change? That determines which market—stocks or bonds—will be the first to give out. These are the choices in front of us: continue raising rates, or first protect the government bond market.
Only if the U.S. continues raising interest rates and the U.S.-Japan spread widens can U.S. stocks hold on for a while, propped up by cheap yen. In that case, U.S. Treasuries are the first to fall. If the U.S. and Japan both act at the same time and the spread stays the same, U.S. stocks may hold up a bit before heading lower; U.S. Treasuries will still be hurt. The hardest scenario is when Japan raises rates more than the U.S.—the spread narrows and global capital moves back in unison. With these two legs—stocks and bonds—official policy can only protect one.
Only if the U.S. continues raising interest rates and the U.S.-Japan spread widens can U.S. stocks hold on for a while, propped up by cheap yen. In that case, U.S. Treasuries are the first to fall. If the U.S. and Japan both act at the same time and the spread stays the same, U.S. stocks may hold up a bit before heading lower; U.S. Treasuries will still be hurt. The hardest scenario is when Japan raises rates more than the U.S.—the spread narrows and global capital moves back in unison. With these two legs—stocks and bonds—official policy can only protect one.
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Hawkish rate hike can’t hold up a strong dollarThis rate hike was the toughest in the past few years, but it can’t prop up the dollar. In the end, the dollar’s confidence lies in fiscal policy, not what the Fed says. With rates raised to 3.75%–4.00%, the decision passed unanimously with all 12 votes.
The hard-nosed effect only lasted a day. On the day of the resolution, the U.S. dollar index touched 100.33; the next day it retreated to 100.25, down 0.6%. The 10-year Treasury yield also fell from 5.02% to 4.95%.
Inflation figures also don’t support stubbornly pushing it through. Total PCE is 3.6%, core PCE is 3.2%, and CPI is 2.4%—all are moving down. The Fed itself says that current financial conditions are not restrictive, but it won’t give guidance on whether it will raise rates in the future. It’s leaving room for ambiguity.
Hawkish rate hike can’t hold up a strong dollar
This rate hike was the toughest in the past few years, but it can’t prop up the dollar. In the end, the dollar’s confidence lies in fiscal policy, not what the Fed says. With rates raised to 3.75%–4.00%, the decision passed unanimously with all 12 votes.
The hard-nosed effect only lasted a day. On the day of the resolution, the U.S. dollar index touched 100.33; the next day it retreated to 100.25, down 0.6%. The 10-year Treasury yield also fell from 5.02% to 4.95%.
Inflation figures also don’t support stubbornly pushing it through. Total PCE is 3.6%, core PCE is 3.2%, and CPI is 2.4%—all are moving down. The Fed itself says that current financial conditions are not restrictive, but it won’t give guidance on whether it will raise rates in the future. It’s leaving room for ambiguity.
The hard-nosed effect only lasted a day. On the day of the resolution, the U.S. dollar index touched 100.33; the next day it retreated to 100.25, down 0.6%. The 10-year Treasury yield also fell from 5.02% to 4.95%.
Inflation figures also don’t support stubbornly pushing it through. Total PCE is 3.6%, core PCE is 3.2%, and CPI is 2.4%—all are moving down. The Fed itself says that current financial conditions are not restrictive, but it won’t give guidance on whether it will raise rates in the future. It’s leaving room for ambiguity.
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Gold’s pricing anchor has shifted from rate cuts to U.S. TreasuriesGold’s pricing mechanism has changed. Previously, people watched when the Fed would cut rates; now they watch whether the market still believes the Fed, with the outcome showing up in long-end Treasury yields.
Here, rate hikes are seen as compensation for inflation—how much money inflation eats away, interest rates must make up for it. What determines the direction isn’t whether this particular hike happens, but whether long-end Treasury yields can hold steady.
In the early hours of September 17 Beijing time, the U.S. Federal Reserve raised interest rates by 25 basis points to 3.75%–4.00%. All 12 votes passed unanimously, the first rate hike in more than three years. The dot plot showed that there will be one more hike during the year. It will not be until 2029 for inflation to return to 2%. The U.S. Dollar Index rose to 100.33, the 10-year U.S. Treasury yield rebounded to 5.02%, and the 2-year yield rose to 4.73%. Spot gold fell 0.70% to $4,264, with the intraday low dropping by about 3%. Silver fell 0.68% to $63.42. The Dow fell 1.21%, the S&P 500 fell 0.45%, and the Nasdaq closed roughly flat.
Gold’s pricing anchor has shifted from rate cuts to U.S. Treasuries
Gold’s pricing mechanism has changed. Previously, people watched when the Fed would cut rates; now they watch whether the market still believes the Fed, with the outcome showing up in long-end Treasury yields.
Here, rate hikes are seen as compensation for inflation—how much money inflation eats away, interest rates must make up for it. What determines the direction isn’t whether this particular hike happens, but whether long-end Treasury yields can hold steady.
In the early hours of September 17 Beijing time, the U.S. Federal Reserve raised interest rates by 25 basis points to 3.75%–4.00%. All 12 votes passed unanimously, the first rate hike in more than three years. The dot plot showed that there will be one more hike during the year. It will not be until 2029 for inflation to return to 2%. The U.S. Dollar Index rose to 100.33, the 10-year U.S. Treasury yield rebounded to 5.02%, and the 2-year yield rose to 4.73%. Spot gold fell 0.70% to $4,264, with the intraday low dropping by about 3%. Silver fell 0.68% to $63.42. The Dow fell 1.21%, the S&P 500 fell 0.45%, and the Nasdaq closed roughly flat.
Here, rate hikes are seen as compensation for inflation—how much money inflation eats away, interest rates must make up for it. What determines the direction isn’t whether this particular hike happens, but whether long-end Treasury yields can hold steady.
In the early hours of September 17 Beijing time, the U.S. Federal Reserve raised interest rates by 25 basis points to 3.75%–4.00%. All 12 votes passed unanimously, the first rate hike in more than three years. The dot plot showed that there will be one more hike during the year. It will not be until 2029 for inflation to return to 2%. The U.S. Dollar Index rose to 100.33, the 10-year U.S. Treasury yield rebounded to 5.02%, and the 2-year yield rose to 4.73%. Spot gold fell 0.70% to $4,264, with the intraday low dropping by about 3%. Silver fell 0.68% to $63.42. The Dow fell 1.21%, the S&P 500 fell 0.45%, and the Nasdaq closed roughly flat.
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The dollar and interest rates together are weighing on the marketIn the short term, what’s truly weighing on the market is not just a dollar rebound, but the dollar and interest rates rising together. The U.S. dollar index is back near 99.08, and the 10-year Treasury yield has risen to 4.965%. With cash and bonds offering better returns, other assets are more likely to be sold off.
This change is different from yesterday’s conditions of “a weaker dollar, with gold and silver still supported.” Prices at the U.S. production end rose 5.4% year over year in August, and oil prices have also climbed above $100, increasing expectations for further rate hikes. In other words, what the market is worried about has shifted from pressure in the bond market to inflation forcing interest rates to keep rising.
Put it on the market and watch: Bitcoin could return to about $77,900; the three major U.S. stock indexes all fell by about 0.6%. Gold dropped 1.94%, and silver fell 5.48%. Silver is weaker because, besides worrying about high interest rates, it also fears cooling industrial demand. If tonight’s inflation data stays elevated, the dollar and yields may continue to weigh on risk assets; if the data clearly cools, this view needs to be reassessed.$BTC #美元 #美债 #gold
The dollar and interest rates together are weighing on the market
In the short term, what’s truly weighing on the market is not just a dollar rebound, but the dollar and interest rates rising together. The U.S. dollar index is back near 99.08, and the 10-year Treasury yield has risen to 4.965%. With cash and bonds offering better returns, other assets are more likely to be sold off.
This change is different from yesterday’s conditions of “a weaker dollar, with gold and silver still supported.” Prices at the U.S. production end rose 5.4% year over year in August, and oil prices have also climbed above $100, increasing expectations for further rate hikes. In other words, what the market is worried about has shifted from pressure in the bond market to inflation forcing interest rates to keep rising.
Put it on the market and watch: Bitcoin could return to about $77,900; the three major U.S. stock indexes all fell by about 0.6%. Gold dropped 1.94%, and silver fell 5.48%. Silver is weaker because, besides worrying about high interest rates, it also fears cooling industrial demand. If tonight’s inflation data stays elevated, the dollar and yields may continue to weigh on risk assets; if the data clearly cools, this view needs to be reassessed.$BTC #美元 #美债 #gold
This change is different from yesterday’s conditions of “a weaker dollar, with gold and silver still supported.” Prices at the U.S. production end rose 5.4% year over year in August, and oil prices have also climbed above $100, increasing expectations for further rate hikes. In other words, what the market is worried about has shifted from pressure in the bond market to inflation forcing interest rates to keep rising.
Put it on the market and watch: Bitcoin could return to about $77,900; the three major U.S. stock indexes all fell by about 0.6%. Gold dropped 1.94%, and silver fell 5.48%. Silver is weaker because, besides worrying about high interest rates, it also fears cooling industrial demand. If tonight’s inflation data stays elevated, the dollar and yields may continue to weigh on risk assets; if the data clearly cools, this view needs to be reassessed.$BTC #美元 #美债 #gold
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Repos don’t equal easing—the pressure on long-dated Treasuries is still thereThis time, the U.S. Treasury raised the limit on long-term Treasury repo operations to $6 billion. The market didn’t treat it as genuine easing; instead, it continued to sell long-dated Treasuries. The 10-year yield climbed to about 4.84%, suggesting that people are more concerned with how much debt the U.S. will issue and who will ultimately absorb it in the future, rather than how many old bonds can be bought in a single repo operation.\n\nRepos are more like moving an old car to a new parking spot: they can improve transactions, but they don’t reduce the number of cars on the road. The U.S. issues more than $2 trillion of debt every year. Putting $600 million into this pool is unlikely to change the pressure from supply. If the fiscal deficit, inflation, and oil prices continue to rise, long-end yields may still put pressure on the market.\n\nIn market terms, yields moving higher first weigh on high-valuation stocks. The S&P 500 and the Nasdaq fell overnight by about 0.48% and 0.64%, respectively. BTC is around $78,100, down slightly but still volatile. What really matters is whether the dollar and yields weaken together. The U.S. Dollar Index is about 98.80. Gold closed at roughly $4,402, and silver at about $67.28. Safe-haven demand and a weaker dollar provide temporary support to precious metals, but silver is still influenced by industrial demand.\n\nNext, it’s more suitable to keep an eye on long-end yields, subsequent actual repo transaction activity, and inflation data. If yields keep rising, the stabilizing effect of repos hasn’t yet been recognized by the market. If rates fall and the dollar weakens, risk assets may get a clearer window to breathe.\n\n$BTC
Repos don’t equal easing—the pressure on long-dated Treasuries is still there
This time, the U.S. Treasury raised the limit on long-term Treasury repo operations to $6 billion. The market didn’t treat it as genuine easing; instead, it continued to sell long-dated Treasuries. The 10-year yield climbed to about 4.84%, suggesting that people are more concerned with how much debt the U.S. will issue and who will ultimately absorb it in the future, rather than how many old bonds can be bought in a single repo operation.\n\nRepos are more like moving an old car to a new parking spot: they can improve transactions, but they don’t reduce the number of cars on the road. The U.S. issues more than $2 trillion of debt every year. Putting $600 million into this pool is unlikely to change the pressure from supply. If the fiscal deficit, inflation, and oil prices continue to rise, long-end yields may still put pressure on the market.\n\nIn market terms, yields moving higher first weigh on high-valuation stocks. The S&P 500 and the Nasdaq fell overnight by about 0.48% and 0.64%, respectively. BTC is around $78,100, down slightly but still volatile. What really matters is whether the dollar and yields weaken together. The U.S. Dollar Index is about 98.80. Gold closed at roughly $4,402, and silver at about $67.28. Safe-haven demand and a weaker dollar provide temporary support to precious metals, but silver is still influenced by industrial demand.\n\nNext, it’s more suitable to keep an eye on long-end yields, subsequent actual repo transaction activity, and inflation data. If yields keep rising, the stabilizing effect of repos hasn’t yet been recognized by the market. If rates fall and the dollar weakens, risk assets may get a clearer window to breathe.\n\n$BTC
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Rising yen is pulling out cheap fundingThis round of Japanese yen strength is causing ripples beyond the FX market. In the past, some people borrowed low-interest yen, exchanged it for US dollars, and used those dollars to buy U.S. Treasuries, U.S. stocks, and other high-yield assets—essentially profiting from higher returns using cheap loans. As long as the yen didn’t appreciate, the deal was relatively stable. Now that the yen is strengthening and expectations for Japan to raise interest rates are increasing, both borrowing costs and repayment costs have risen together, forcing some funds to sell assets and buy back yen.
As of the morning of September 9, the USD/JPY exchange rate is around 153.7, having briefly traded as low as 152.9 during the day. Since September began, the yen has appreciated by about 4%. This suggests that the unwinding of carry trades has already started, but it’s still some way from spiraling out of control. The real thing to watch is whether the yen’s rise continues, and whether the declines in the stock market and high-volatility assets are being magnified at the same time.
Rising yen is pulling out cheap funding
This round of Japanese yen strength is causing ripples beyond the FX market. In the past, some people borrowed low-interest yen, exchanged it for US dollars, and used those dollars to buy U.S. Treasuries, U.S. stocks, and other high-yield assets—essentially profiting from higher returns using cheap loans. As long as the yen didn’t appreciate, the deal was relatively stable. Now that the yen is strengthening and expectations for Japan to raise interest rates are increasing, both borrowing costs and repayment costs have risen together, forcing some funds to sell assets and buy back yen.
As of the morning of September 9, the USD/JPY exchange rate is around 153.7, having briefly traded as low as 152.9 during the day. Since September began, the yen has appreciated by about 4%. This suggests that the unwinding of carry trades has already started, but it’s still some way from spiraling out of control. The real thing to watch is whether the yen’s rise continues, and whether the declines in the stock market and high-volatility assets are being magnified at the same time.
As of the morning of September 9, the USD/JPY exchange rate is around 153.7, having briefly traded as low as 152.9 during the day. Since September began, the yen has appreciated by about 4%. This suggests that the unwinding of carry trades has already started, but it’s still some way from spiraling out of control. The real thing to watch is whether the yen’s rise continues, and whether the declines in the stock market and high-volatility assets are being magnified at the same time.
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The U.S. Treasury can’t take more rate hikes—expanding the balance sheet to support the market is likely unavoidableThe U.S. Treasury market can’t withstand further rate hikes anymore. No matter what the inflation data looks like, the likelihood of the Fed raising rates directly is very small. If they said they would reduce the balance sheet, you can treat it as talk for now—when it really comes down to it, it’s more likely to go the other way.
The FIMA tool sounds sophisticated, but it’s basically just a temporary mechanism for central banks in different countries to borrow U.S. dollars from each other. Its scale is too small; it’s only a drop in the bucket for the whole market and can’t solve the big problems.
The problem is that inflation is already moving in a malignant direction. Once prices can’t be kept under control, it becomes very difficult to clean things up later. How to choose between issuing national rescue bonds and suppressing inflation—there will likely be tug-of-war again and again. Ultimately, where things go will depend on the actual data.
The U.S. Treasury can’t take more rate hikes—expanding the balance sheet to support the market is likely unavoidable
The U.S. Treasury market can’t withstand further rate hikes anymore. No matter what the inflation data looks like, the likelihood of the Fed raising rates directly is very small. If they said they would reduce the balance sheet, you can treat it as talk for now—when it really comes down to it, it’s more likely to go the other way.
The FIMA tool sounds sophisticated, but it’s basically just a temporary mechanism for central banks in different countries to borrow U.S. dollars from each other. Its scale is too small; it’s only a drop in the bucket for the whole market and can’t solve the big problems.
The problem is that inflation is already moving in a malignant direction. Once prices can’t be kept under control, it becomes very difficult to clean things up later. How to choose between issuing national rescue bonds and suppressing inflation—there will likely be tug-of-war again and again. Ultimately, where things go will depend on the actual data.
The FIMA tool sounds sophisticated, but it’s basically just a temporary mechanism for central banks in different countries to borrow U.S. dollars from each other. Its scale is too small; it’s only a drop in the bucket for the whole market and can’t solve the big problems.
The problem is that inflation is already moving in a malignant direction. Once prices can’t be kept under control, it becomes very difficult to clean things up later. How to choose between issuing national rescue bonds and suppressing inflation—there will likely be tug-of-war again and again. Ultimately, where things go will depend on the actual data.
20
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Rate-Hike Expectations Warm Up Less—The Yen May Become a Liquidity-Adjustment ToolBased on the information available at present, the probability of a Vosh rate hike is already very low.
First, the focus of monetary policy may shift to the yen exchange rate, aiming to tighten liquidity by raising the yen;
Second, from the perspective of U.S. Treasuries, the rate-hike path faces significant constraints, leaving limited room for implementation.
Conclusion: In the short term, watch closely the cooling of rate-hike expectations and the yen’s trend, but do not place heavy bets based on this.
Rate-Hike Expectations Warm Up Less—The Yen May Become a Liquidity-Adjustment Tool
Based on the information available at present, the probability of a Vosh rate hike is already very low.
First, the focus of monetary policy may shift to the yen exchange rate, aiming to tighten liquidity by raising the yen;
Second, from the perspective of U.S. Treasuries, the rate-hike path faces significant constraints, leaving limited room for implementation.
Conclusion: In the short term, watch closely the cooling of rate-hike expectations and the yen’s trend, but do not place heavy bets based on this.
First, the focus of monetary policy may shift to the yen exchange rate, aiming to tighten liquidity by raising the yen;
Second, from the perspective of U.S. Treasuries, the rate-hike path faces significant constraints, leaving limited room for implementation.
Conclusion: In the short term, watch closely the cooling of rate-hike expectations and the yen’s trend, but do not place heavy bets based on this.
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The energy crisis is not an accident, but part of the American game: with Middle East and Russia cutting production, American oil companies get the first bite, but the cost is high oil prices that crush inflation, nullify interest rate cuts, and gradually hollow out the dollar's hegemony. At this point, I am more concerned not about how much oil can still rise, but that the dollar's credit is starting to pay the price for the energy war.
The energy crisis is not an accident, but part of the American game: with Middle East and Russia cutting production, American oil companies get the first bite, but the cost is high oil prices that crush inflation, nullify interest rate cuts, and gradually hollow out the dollar's hegemony. At this point, I am more concerned not about how much oil can still rise, but that the dollar's credit is starting to pay the price for the energy war.
1
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The current pullback in precious metals seems more like a sign that dollar liquidity is tightening, not the end of the bullish logic. When the market truly lacks dollars, the first assets to be sold are often not the worst ones, but those that can be easily converted into cash. As long as oil prices remain suppressed, long-term interest rates do not decrease, and U.S. stocks drop further, the main trading focus will shift from 'waiting for rate cuts' to 'seeking liquidity.' When that happens, precious metals may also be sold off initially, and only when the dollar shortage reaches its peak will the anti-devaluation logic be seriously priced in by the market.
The current pullback in precious metals seems more like a sign that dollar liquidity is tightening, not the end of the bullish logic. When the market truly lacks dollars, the first assets to be sold are often not the worst ones, but those that can be easily converted into cash. As long as oil prices remain suppressed, long-term interest rates do not decrease, and U.S. stocks drop further, the main trading focus will shift from 'waiting for rate cuts' to 'seeking liquidity.' When that happens, precious metals may also be sold off initially, and only when the dollar shortage reaches its peak will the anti-devaluation logic be seriously priced in by the market.
1
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The key to winning this round of Middle Eastern games is not missiles, but oil prices. The F-35 is suspected to be hit, yet the United States still has to allow Iranian crude to pass through the sea, and is even considering easing sanctions and releasing reserves to suppress oil prices. This indicates that what it truly fears is not an escalation of conflict, but uncontrollable inflation. Once oil prices cannot be suppressed, the dream of interest rate cuts will awaken, and stagflation trading will reclaim the market.
The key to winning this round of Middle Eastern games is not missiles, but oil prices. The F-35 is suspected to be hit, yet the United States still has to allow Iranian crude to pass through the sea, and is even considering easing sanctions and releasing reserves to suppress oil prices. This indicates that what it truly fears is not an escalation of conflict, but uncontrollable inflation. Once oil prices cannot be suppressed, the dream of interest rate cuts will awaken, and stagflation trading will reclaim the market.
1
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The real thunder in the United States is not recession, but stagflation has been officially recognized: growth cannot be sustained, inflation cannot be suppressed, the high level of 10-year U.S. Treasury bonds is not strong, but the market is adjusting for real inflation. If oil prices continue to rise, both the U.S. stock market and the fantasy of interest rate cuts need to be reassessed. Gold and silver will benefit in the long run, but may not necessarily rise in the short term; I am more cautious about first killing liquidity, then trading on the depreciation of the dollar.
The real thunder in the United States is not recession, but stagflation has been officially recognized: growth cannot be sustained, inflation cannot be suppressed, the high level of 10-year U.S. Treasury bonds is not strong, but the market is adjusting for real inflation. If oil prices continue to rise, both the U.S. stock market and the fantasy of interest rate cuts need to be reassessed. Gold and silver will benefit in the long run, but may not necessarily rise in the short term; I am more cautious about first killing liquidity, then trading on the depreciation of the dollar.
2
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I just completed a new transaction! Copy my portfolio with one click👇
I just completed a new transaction! Copy my portfolio with one click👇
KlineCode
Open Position
XPLUSDTLong 5x
Position Size(USDT)
7639
Entry Price
0.1011
3
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I just completed a new transaction! Copy my portfolio with one click👇
I just completed a new transaction! Copy my portfolio with one click👇
KlineCode
Open Position
PIPPINUSDTLong 5x
Position Size(USDT)
7373
Entry Price
0.18404
8
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