Oil is climbing this morning, as are global yields
April 28, 2026
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–CLM6 (June WTI) is just below $100 bbl as of this Tuesday morning, last at 99.67 +3.30. The highest settle of this particular contract has been 99.38 on 7-Apr. Coinciding with higher energy prices, global 10y yields are moving up and appear to want to break out to the upside.
–First, BOJ did not hike, but there were three dissenters in favor of an immediate raise. Japan 10y JGB now 2.464, at a new high, double the yield from a year ago. However, $/yen dipped briefly and is now 159.58, appears poised to break out above 160 adding to inflationary pressure. ECB and BOE are Thursday. German 10y bund is 3.058, +2.5 bps; there’s a double top at 3.09 (3/27 and 4/13) that appears vulnerable. UK 10y Gilt is 4.983, now testing the late March high of 4.99. US 10y is 4.356, up a couple from yesterday’s mark at the futures settle, but well below the late March high of 4.43. US auctions 7y note today. FOMC tomorrow. Conference Board Consumer Sentiment today.
–There were a few large new put buys on treasuries. TY wk5 THUR (4/30 expiry) 110.75p 6 paid 50k (hedge for 7 yr?) BBG symbol TJWJ26P5 110.75. Also +50k TY wk1 Fri (5/1) 110.75/110.5ps covered 111-00, 4 paid 50k. Finally USN6 110p 41 paid 30k. Settled 48 with 25d vs USU6 113-07. Flows tend to support a view for higher yields, though high gamma TY put buys could just be short term hedges.
–Gold continues to retreat from the mid-April high near 4900. Spot currently at the recent low of 4613, down $69 today.
–SOFR contracts were down 2-3.5 across the board yesterday (and another 1-3 this morning). The Fed Effective rate (EFFR) is 3.64%. SOFR Rate is 3.66%. SFRM6 is 9634, exactly at EFFR. The peak contract is SFRH8 at 9654, now only 20 bps lower in yield than SFRM6. The market continues to squeeze out easing prospects. SFRH8 as of this note is 9651.5.
–A couple of lower K items:
@jeffreytucker
Some 40% of auto loans are now underwater, a historical high. This problem traces to the lockdowns of 2020 which restricted supply and caused a huge price increase. Buyers took on more debt than they could handle and now face trade-in valuations that are far less than loan equity.
U.S. Farm Bankruptcies Surge +46% as Fertilizer Costs Squeeze Farmers: The American Farm Bureau Federation reported 315 Chapter 12 bankruptcy filings in 2025, up from 216 in 2024 and the third consecutive annual increase. The Midwest got hit hardest with 121 filings, a +70% jump. The Southeast followed with 105, up +69%. Together, those two regions accounted for more than two-thirds of every farm bankruptcy in the country. Fertilizer prices are pouring gasoline on the fire. Urea, the most widely used nitrogen fertilizer on the planet, has ripped +87% year-to-date and trades near $720 a tonne.
