Overnight
The ten-year Treasury yield has crossed 5%, and the qualification matters more than the headline. It printed 5.006% — six thousandths of a percentage point above the line, less than one basis point. The desk's own reading late Tuesday was 4.998%, and we called that approached, not crossed. This morning it is through, and no more than through. Tuesday's US cash close was lower: the S&P 500 at 7,585.73, off 0.45%; the Nasdaq at 25,981.57, off 0.78%. Who sold duration, and why, the desk cannot say without inventing it.
Asia and Europe
Asia and Europe closed Tuesday before New York finished. The Hang Seng finished at 24,667.25, down 1.00%. The Nikkei 225 at 63,483.88, down 0.01% — flat, with a minus sign attached. Europe was softer but orderly: the FTSE 100 at 10,658.13, down 0.37%; the DAX at 25,402.28, down 0.15%. Tokyo and Hong Kong reopen this morning to price Tuesday's US levels.
FX, rates and commodities
The yen is the cleanest number: 155.00 to the dollar, the round number, softer by 0.62%. The dollar sits at 7.8445 against the Hong Kong dollar, just under the weak-side guarantee. EUR/USD is 1.1539, down 0.46%; sterling 1.3483, down 0.18%. Crude is the one moving: WTI at US$105.32, roughly US$4 above the desk's own late-Tuesday observation of US$101.29, and still well above US$100. Gold at US$4,287.50, where it sat last night. Crypto has handed back the week: bitcoin US$75,832 from US$77,023, ether US$2,405 from US$2,480.
The day ahead
Wednesday's questions are Tuesday's, with one answer now on the board: the long end is above 5%, by as little as it can be. The desk will watch behaviour rather than forecast: whether the level holds, and whether the round number changes anything now that it sits behind the market rather than ahead of it. Asia prices it first; London and New York follow. Equities carry a discount rate that has just taken the line. A quiet morning is not an answer; it is a postponement.
One number
5.006% — the ten-year yield, and the distance to 5% is now zero. It crossed by six thousandths of a percentage point, less than one basis point: a line crossed, not a level conquered.
One read
The morning's two threads are one argument in our markets desk's Oil past US$100, a ten-year near 5%: one problem for portfolios. A barrel above US$100 and a long bond at the line are not separate stories but one chain of arithmetic — diesel, the inflation statistics, the term premium, and out again as the discount rate on every earnings stream. It lands differently on producers, hauliers, chemicals and utilities, and puts gold at the end of the chain.
