Debts & deficits do now matter/Rig count/Luxury/Pricing/Euphoria (not the show)/China

After the breakout in global bond yields Friday, they continue higher today, albeit more modestly. It started in Japan as yields there moved up again, particularly the longer end of their curve with the 30 yr yield up another 6 bps to 4.10% and the 40 yr yield higher by 9 bps to 4.34%. Evidence that excessive debts and deficits now matter, as one of the factors leading to higher yields, the move up today was in response to talk that the Takaichi government was going to ask for a supplementary budget to cover the extra subsidies for its people to cushion the blow of higher commodity costs, particularly energy. This would entail more bond issuance.

This is also helping to boost the US 30 yr bond yield to a 19 year high at 5.13%.

JGB 30 yr Yield

US 30 yr Yield

We finally got a lift in the Baker Hughes crude oil rig count of 5 rigs to 415, the most since last November but still well below the 465 seen one year ago and the 497 two years ago.

Crude Oil Rig Count

Soybean prices are rebounding by 2%, after falling last week, on news of Chinese purchases coming over the next three years. I believe we’re in the early stages of an ag bull market that will join industrial and precious metals along with energy.