Trading Desk

US10Y has broken above the multi-year descending trendline and pushed toward 4.7%. Given the repeated whipsaws around this trendline, the break needs to hold. As long as US10Y stays above the trendline around 4.6%, the path remains open toward 4.8%, followed by 5%. A sustained move back below the descending trendline would put 4.4% back in focus.

US30Y is now testing the prior high around 5.2%. A sustained close above 5.2% would confirm the breakout and push long-end yields back into pre-GFC territory.

US10Y remains capped below the descending trendline. Bulls need a sustained move above the red trendline around 4.55-4.60% before the 10Y can turn decisively higher again.

Failure to reclaim that trendline keeps US10Y trapped inside the compressing wedge. A break back below the recent pullback low would shift focus back toward the rising trendline support.

US30Y is the cleaner warning. The long bond failed at 5%, lost the breakout, and has now broken the rising support. That is a failed break, and the path of least resistance is lower toward 4.75-4.8% unless buyers reclaim the broken trendline quickly. A close back above 5% would flip the message back to fiscal/term-premium stress and would be bad for equities. Until that happens, the curve read is simple: front-end still hawkish, long-end losing momentum. This is not a broad all-clear. Do not chase duration until the 2Y confirms below 4%.

As I laid out in May, when the MOF first intervened, our model put USDJPY’s fair value above 300. I do not expect an immediate surge to that level, but the path of least resistance remains higher.

USDJPY has now broken above the latest intervention level around 163. Unilateral intervention rarely changes the trajectory of a fundamentally driven currency move. This move is being driven by higher oil prices, over which Japan has no control whatsoever.

Technically, 162.6-163 is now the first support. As long as USDJPY holds above it, the breakout remains intact. A sustained break back below 162.6 puts 160.8 back in focus. Below 160.8, the ascending trendline becomes the next major support.

The longer the war lasts and oil remains elevated, the higher USDJPY is likely to go. Unless Japan secures multilateral coordination, unilateral intervention will ultimately be in vain.

USDJPY has returned to the 162-163 area. The latest sharp reversal faded quickly, reinforcing the same point I have made repeatedly. Intervention can slow the move, but intervention alone will struggle to reverse a trend driven by fundamentals.

As long as USDJPY stays above 160.8, the path of least resistance remains higher. A sustained break above 163 would show that the new intervention level is failing, while a sustained break below 160.8 puts the ascending trendline around 159-160 back in play.

Confirming signs from EWY.

Friday's estimates raised U.S. corn, soybean and wheat ending-stock forecasts. But I continue to expect the Iran war backdrop to eventually feed into food-price inflation and accelerate the already out-of-control spiral in yields.

DBA