1. Japan’s Yen Problem Isn’t Going Away
The Bank of Japan raised its benchmark interest rate to its highest level since 1995.
However, as this happened, the yen depreciated against the USD.
So, another intervention coming? Will the U.S. help? Will Japan sell its U.S. Treasuries?
Japan’s 10-year bond yield is above 3%.
This is a story that shouldn’t be overlooked.
2. Oil’s Physical Market Has Some Serious Issues
Saudi Arabia is telling European refiners that they will not be getting crude next month.
As this happens, we are also learning that oil tanker rates have spiked to $1 million, with no sign of cooling anytime soon, as shipping companies aren’t willing to go through Hormuz and possibly now the Red Sea.
The physical oil market has some issues at the moment.
But, looking at the futures chain, it looks like the oil market is potentially pricing in some sort of TACO/de-escalation. It could even come as early as this weekend.
3. Yields Are Heading Back Toward 5%
Yields dropped a little yesterday, but now, with oil rising, the U.S. 10-year yield is getting close to 5%.
The yield curve (10-year minus 2-year) is flattening like no tomorrow.
Surely, lots of people these days don’t want to pay attention to the curve because “it doesn’t work.” But know that it does show problems in the wiring, at the very least.
Also, keep in mind the U.S. government is trying to intervene in the bond market.
As we have said before, the only way for the Treasury to bring down long-term rates, it would have to issue a lot of short-term debt.
4. The S&P 500 Is Testing Its 50-Day Moving Average
The S&P 500 is back to testing the 50-day moving average.
Memory names are above their 50-day moving average and getting some life back in them.
You know, Netflix is down like 46% from its highs made in 2025. Remember how it was the hottest name in town not too long ago?
Also, did you know: only 50% of the S&P 500 companies are trading above their 200-day moving average?
The equal-weight S&P 500 is down about 5% since August 19 and below the 50-day moving average.
5. Gold, Bitcoin, Canada & a Diesel Crisis?
Keeping our eyes on $4,300 gold. Big bounce yesterday, but if yields and oil go higher today, could we potentially retest?
A solid move is happening in Bitcoin. Above $82K, we get to $100K fairly quickly.
Odds of an interest rate hike from the Bank of Canada have jumped a little.
Diesel crisis happening in the U.S.?