It’s not really interesting for anyone else that the oil price fell by 1% in a day, returning to a level slightly above 90; Iran has also softened its position on pausing uranium enrichment in exchange for eased sanctions—geopolitical tension really is easing.
But if, because of this, you decide to buy up risk assets, then you haven’t understood the pricing logic of this round—the pressure on the price of cryptocurrencies and U.S. stocks is caused not by the war, but by interest rates.
The yield on 10-year government bonds is still at 5.2%, the highest level since 2007—at this cost of money, credit assets are forced to gradually reduce leverage.
A drop in oil is good for lowering inflation, but as long as rates haven’t started coming down, don’t interpret a “risk sentiment pullback” as “it’s time to enter the market.”
First, let’s see how 2-year Treasury bonds behave, and only then will we talk about risk appetite.
$CL $BZ
But if, because of this, you decide to buy up risk assets, then you haven’t understood the pricing logic of this round—the pressure on the price of cryptocurrencies and U.S. stocks is caused not by the war, but by interest rates.
The yield on 10-year government bonds is still at 5.2%, the highest level since 2007—at this cost of money, credit assets are forced to gradually reduce leverage.
A drop in oil is good for lowering inflation, but as long as rates haven’t started coming down, don’t interpret a “risk sentiment pullback” as “it’s time to enter the market.”
First, let’s see how 2-year Treasury bonds behave, and only then will we talk about risk appetite.
$CL $BZ
