
US Treasury yields surge as Fed and oil pressure bonds
Fed pricing has turned more hawkish, oil has surged and Treasury yields have backed up hard. Here’s how the pieces fit together.
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Fed pricing has turned more hawkish, oil has surged and Treasury yields have backed up hard. Here’s how the pieces fit together.

It’s a big week ahead with a widely expected FOMC rate hike followed by a Bank of Japan rate decision. But perhaps more pressing are moves showing in US Treasuries and Oil and what that might entail for the macro landscape.

DXY is finding renewed support as front-end Treasury yields push higher, with the strengthening inverse relationship putting fresh pressure on gold.

Gold's price action has changed notably during the week. Over the last four trading sessions, the precious metal has advanced only slightly more than 1%, highlighting a clear slowdown around the $4,600 per ounce area.

A $40 trillion debt pile, rising interest costs and a more interventionist Treasury are giving dollar bears something to think about. EUR/USD sits at the centre of that debate.

The US dollar was hammered after Treasury moved to support longer-dated bonds, sending gold and silver sharply higher. It may be premature to declare the debasement trade back, but the embers are glowing.

Is it a bubble or just a mania? While AI holds a lot of promise the valuations are becoming untethered from historical norms but that doesn’t necessarily mean that prices need to come down.

Fear has reappeared in oil prices but so far, stocks appear to have escaped unscathed. But matters can change quickly in global macro.

Silver’s breakout above $60 may be the opening act for gold. With Treasury futures under pressure and term premium rising, the market is sending a clear message: risk is being repriced.

Q4 begins tomorrow and there are several stretched trends across the macro landscape. Which are set to continue and which are prone to snap?
Stocks are putting in a big move and 10-year Treasury Notes are showing the largest decline in yields since last August, just before stocks bottomed.
The US Dollar was very strong in October as rising odds of a Trump win started to get priced-in to markets, but can equities avoid a pullback if longer-term US rates continue to fly-higher?
S&P 500 futures pulled back again last week and as yields have continued their run-higher, there’s more potential for greater pullbacks ahead. Both the election and FOMC can bring impact on both fronts.
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