James Brodie
Head of Learning & Development, Flux
Brent Hits $110, Yields Surge, Housing Inventory Imbalance
Brent hits $110 on Houthi pipeline strike; PPI hot at 5.4%; yields surge to cycle highs; diesel tops $6/gal; housing inventory imbalanced.
As Brent spikes briefly touching $110 on news the Hoituis strike Saudi’s E/W pipeline and PPI inflation is up to +5.4%, U.S. 2, 10 and 30-year yields surge to cycle highs (up 15, 12 and 7 bp on the day respectively).
Global yields follow with UK 2yrs also jumping 15bp. The S&P 500 closed marginally lower -0.6% and just below a key support at 5,792, and after the ECB hike 25bp yesterday the OIS prices a 100% change of a Fed hike by the 28th October meeting, and 50bp by 27th Jan. For credibility Warsh and the Fed should hike now.
U.S. 30-year yield. Nothing to see here! (Bloomberg)
CPI comes out today. Note PPI data was taken the week of 13th August so doesn’t include the recent surge in energy. Also note CPI typically lags PPI by about 3 months.
Correlation between yields and oil is now higher than in 2008 (Bloomberg, @Macromadness2)
The Bloomberg Commodity Index has surged to its highest level in over a decade. it's risen by a stunning 32% YTD. While global coal demand will rise to a record high of ~8.94 billion metric tons in 2026 (up ~1.2% from 2025), according to new estimates.
The Breakwave Tanker Shipping ETF ($BWET), which tracks crude oil tanker freight rates, has surged 6,200% in the past 15 months after the Strait of Hormuz effectively closed in February 2026 - yet despite assets growing from $3 million to $157 million, it remains one of the most overlooked trades of the cycle.(Charles Henry Monchau)
US diesel prices officially rise above $6.00/gallon for the first time in history, now up +74% over the last 9 months.
U.S. housing inventory is completely lopsided Sellers outnumber buyers by 563,000, historic 58% gap. This will only get wider for now with rates market events. (Redfin, MLS)
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