Driven by the worsening geopolitical situation between the United States, Iran, and the region, international oil prices have remained consistently high, directly triggering a sharp sell-off in the overnight U.S. Treasury market. The benchmark 10-year Treasury yield surged by as much as 11 basis points to 5.27% at one point, the highest level in nearly 19 years, while the 30-year Treasury yield also rose to 5.55%. In the early trading session, Asia-Pacific Treasuries—including those in New Zealand and Australia—fell across the board.
This latest bout of volatility has brought renewed focus to inflation concerns that had just begun to ease. Morgan Stanley analyst Chris Larkin made it clear that unless this week’s labor market data brings a major surprise, the expectation that the Federal Reserve will maintain tight policy—and possibly continue to raise rates—will remain a drag on the market under the combined pressure of high oil prices and high yields.
Liquidity conditions for traditional financial assets are tightening rapidly. The spike in Treasury yields has directly lifted the risk-free funding cost across society. Capital is accelerating back into the U.S. dollar and commodities, and sentiment in both global stock and bond markets is currently leaning toward cautious defense.
For our brothers in the crypto circle, a high-interest-rate environment lasting longer implies that the pace of inflow of incremental off-exchange capital will slow down. $BTC and mainstream alternative coins are likely to maintain a range-bound, choppy pattern in the short term. Long and short forces are currently relatively balanced, and the market is waiting for further catalysts from upcoming macro data.
#BondYields #FederalReserve #OilPrices
This latest bout of volatility has brought renewed focus to inflation concerns that had just begun to ease. Morgan Stanley analyst Chris Larkin made it clear that unless this week’s labor market data brings a major surprise, the expectation that the Federal Reserve will maintain tight policy—and possibly continue to raise rates—will remain a drag on the market under the combined pressure of high oil prices and high yields.
Liquidity conditions for traditional financial assets are tightening rapidly. The spike in Treasury yields has directly lifted the risk-free funding cost across society. Capital is accelerating back into the U.S. dollar and commodities, and sentiment in both global stock and bond markets is currently leaning toward cautious defense.
For our brothers in the crypto circle, a high-interest-rate environment lasting longer implies that the pace of inflow of incremental off-exchange capital will slow down. $BTC and mainstream alternative coins are likely to maintain a range-bound, choppy pattern in the short term. Long and short forces are currently relatively balanced, and the market is waiting for further catalysts from upcoming macro data.
#BondYields #FederalReserve #OilPrices