Crude oil kept falling for four straight days, erasing the risk premium, as the yield on the 10-year U.S. Treasury note slid below 5% in step. Just as the heaviest “risk-free rate” mountain weighing on risk assets briefly loosened, capital quickly proved to be sharp enough to flow back into non-yielding assets.
$BTC was raised in kind to 87,000 dollars. The spot ETF once again logged more than a hundred million dollars in net purchases on the day. On the trading screen, short-sellers’ liquidations are erupting in dense waves. What looks like a valuation correction that had been suppressed for a long time is quickly being realized in a short span of time.
But the cross-market signals behind the screen have not been fully sorted out. With the long-end rates easing as trading inflation cools, the 2-year short-end yields remain hovering around 4.738%, and the market is still pricing in a rate hike next month. The divergence between the long and short ends suggests that the true “water faucet” of liquidity has not yet been fully turned on.
In the current setup, the rally looks more like an advance move driven by macro expectations. The substance and outcome of U.S.–Iran diplomatic contact will directly determine whether oil prices can hold at low levels. If geopolitical developments cause repeated setbacks and push oil prices and long-end yields back up, investors chasing at higher levels may find themselves facing pullback tests driven by tightening in the short end at any moment.
$BTC was raised in kind to 87,000 dollars. The spot ETF once again logged more than a hundred million dollars in net purchases on the day. On the trading screen, short-sellers’ liquidations are erupting in dense waves. What looks like a valuation correction that had been suppressed for a long time is quickly being realized in a short span of time.
But the cross-market signals behind the screen have not been fully sorted out. With the long-end rates easing as trading inflation cools, the 2-year short-end yields remain hovering around 4.738%, and the market is still pricing in a rate hike next month. The divergence between the long and short ends suggests that the true “water faucet” of liquidity has not yet been fully turned on.
In the current setup, the rally looks more like an advance move driven by macro expectations. The substance and outcome of U.S.–Iran diplomatic contact will directly determine whether oil prices can hold at low levels. If geopolitical developments cause repeated setbacks and push oil prices and long-end yields back up, investors chasing at higher levels may find themselves facing pullback tests driven by tightening in the short end at any moment.