GLOBAL BOND MARKETS : NOXIOUS STIMULI

The month of October seems to have a Golden lining on its clouds with Spot Gold prices crossing the $4000/oz price mark with aggressive bullish movement.This has been during the period of US Shutdown previous Friday,question remains of the correlation towards the US Energy dominance strategy.Dollar spot pegging against the Petro MMBtu through a WTI production and collar caps in that the hypothesis dictating that, if the fuel MMBtu costs fall,the cost of producing the precious metal i.e Gold falls hence bringing a rise on the financialised Gold prices.

Oil Markets remain on a balance with the OPEC Group assuring market stability with healthy global pricing on the based fundamentals.Production adjustment of 137k b/d from 1.65million b/d additional voluntary adjustment announced on April 2023.This is to be done gradually as market conditions remain a key variable in order not to spook the pricing on the global benchmarks.The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation.Upcoming meeting is on 2nd November2025.

Our main focus is on the Global Bond Markets specifically Asia side of the world.

Japanese Bond Yield jumping to 3.29% bringing it to its highest level in history.

This is a much significant move as its very much known that when Japan sneezes,the global monetary & fiscal systems catch a cold.

Being the largest holder of US Treasuries(approx. $1Trillion worth),ultra low interest rates making it an unattractive investment,however tides have turned with the Bond Yield surging meaning Japanese investors are hitting the greens right at their backyard.Domino effect on the US Treasuries could create a rise with the capital outflows, US Tech stocks at the apex of this spear,Yens increased demand and DollarSpot walking a thin line could all be a result from this Noxious Stimuli.Unwinding positions will be a tough break for investors as we are in the closing months of the year.

The boat is about to be rocked so having your oars fortified would be a wise decision.This is the Great Bond Rebalancing and the fulcrum is shifting massively,a worldwide sovereign debt crisis might be looming,point in case is Greece.

On the broader FX Markets, we have our eyes on the Euro with it having gotten back to the pricing it had roughly 25 years ago,this is one to observe as we get in on the final stages of the financial year.The period before had Russian default,LTCM,US Economic acceleration, post LTCM rate cuts,Asian Crisis and 911 crisis bringing the broth to a boil against the dollar,making the Euro stand out like a sore thumb with overvalued sirens glaring.The bearish moves laid heavy for 2 years with dip buys bringing the bottom out in 2002,creations of bullish horns during the financial crisis,currently having us back to the start of these events.Much to ponder on this currency,might be a dèjavu in play.

Buckle up and enjoy the ride.

Many blessings from the desk,create a balance as we approach the Libra season.

Andy Warr,

TophatFinanceGroup.

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