[MARKET ANALYSIS] Treasuries remained subdued after sliding yesterday and with the 10yr yield nearing 5% after oil surged
ISNA cites satellite images and sources reporting a Houthi attack on Saudi's East-West pipeline
[MARKET ANALYSIS] DXY takes a breather after recent advances, while the attention turns to US CPI
[MARKET ANALYSIS] Treasuries remained subdued after sliding yesterday and with the 10yr yield nearing 5% after oil surged
US President Trump reiterates pledge to provide USD 5,000 Trump dividend to adults if Republicans win the Midterms and will make Trump tax cuts permanent
Japanese Finance Minister Katayama says won't comment on specific effects levels, adds our stance has not changed at all since the US-Japan coordination, will aim to ensure stable forex movements and will closely communicate with the US
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USTs: -4 ticks
- Remains subdued after sliding as yields climbed to multi-year highs, which saw the US 10yr yield approach near 5% as oil surged, and with prices not helped after the Treasury Buyback operation of USD 5.19bln, while Treasury Secretary Bessent noted that they didn't buy back as many as he said, because they buy cheap.
Bunds: -22 ticks
- Lingers at the prior day's trough beneath the 121.00 level after sliding as the rise in oil stoked inflationary pressures and after the ECB hiked rates as widely expected, with source reports also noting that ECB governors think further policy tightening is likely and may debate another hike as soon as October.
JGBs: -52 ticks
- Retreated after the surge in oil dictated price action across markets and heading into a widely anticipated BoJ rate hike next week, while PPI data from Japan was somewhat inconclusive as the Y/Y reading printed firmer-than-expected, but the M/M showed surprise deflation.
Sessions of this kind, where a broad sovereign sell-off is traced to an oil shock rather than to domestic data, have historically behaved differently from rates-led moves: the transmission runs through inflation expectations rather than real yields, which tends to lift breakevens and bear-flatten or bear-steepen depending on where central banks sit in their cycles. The case distinction here is between markets where the policy response is already in motion and those where it is not. Where a central bank has just hiked and sources flag more to come, the front end carries the move and energy-driven inflation reinforces the pricing; where a hike is anticipated but not yet delivered, the sell-off is more fragile and prone to reversal on any dovish surprise. Synchronized weakness across Treasuries, Bunds and JGBs points to a common commodity impulse rather than idiosyncratic fiscal or supply stories, though buyback operations and auction dynamics can add noise at the margin. Round-number yield levels have historically attracted both flow and commentary, and approaches to them have tended to slow the move rather than accelerate it until a catalyst resolves the question. The follow-ons that matter are the central bank decisions flagged in the text and whether oil holds its gains, since energy retracement has typically unwound this kind of pressure quickly.
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