U.S. Treasury yields spike higher first, and risk assets tighten up right away.
In this market move, the 10-year U.S. Treasury yield briefly touched 5.135%, the highest level since 2007; the 30-year yield also hit a new high in years, reaching levels not seen since 2004. Meanwhile, Brent crude returned to $103 per barrel. The probability that the Fed will hike by 25 basis points in October has already exceeded 70%, and the U.S. dollar index is back above 101.
Market readings for risk assets like BTC and ETH are leaning bearish: when interest rates and energy prices both rise, it squeezes expectations for liquidity, and it also makes it easier for high valuations and leveraged positions to de-risk. Going forward, one track is U.S. Treasury yields continuing to surge, and the other is whether the dollar can pull back—these two lines will directly affect short-term sentiment.
If macro pressure doesn’t ease, rallies are more likely to turn into de-risking windows; only if yields and the dollar ease in tandem will risk appetite have a better chance to recover. Are you more focused on U.S. Treasury yields, or on the secondary impact of oil prices on the market?
Figure 1: Soaring Treasury yields suppress risk assets · Source: partial screenshot of the page
Image source: https://www.panewslab.com/zh/articles/01a0d1b4-f24b-7409-a34f-78735808d3fd
In this market move, the 10-year U.S. Treasury yield briefly touched 5.135%, the highest level since 2007; the 30-year yield also hit a new high in years, reaching levels not seen since 2004. Meanwhile, Brent crude returned to $103 per barrel. The probability that the Fed will hike by 25 basis points in October has already exceeded 70%, and the U.S. dollar index is back above 101.
Market readings for risk assets like BTC and ETH are leaning bearish: when interest rates and energy prices both rise, it squeezes expectations for liquidity, and it also makes it easier for high valuations and leveraged positions to de-risk. Going forward, one track is U.S. Treasury yields continuing to surge, and the other is whether the dollar can pull back—these two lines will directly affect short-term sentiment.
If macro pressure doesn’t ease, rallies are more likely to turn into de-risking windows; only if yields and the dollar ease in tandem will risk appetite have a better chance to recover. Are you more focused on U.S. Treasury yields, or on the secondary impact of oil prices on the market?
Figure 1: Soaring Treasury yields suppress risk assets · Source: partial screenshot of the page
Image source: https://www.panewslab.com/zh/articles/01a0d1b4-f24b-7409-a34f-78735808d3fd
