What now?/Commodity stockpiling/The sushi biz/RBNZ hikes

What now with Iran?

Oil prices are doing what’s expected in response to the news while global bond yields continue higher even with oil prices well off their war highs and a price I mentioned Monday I found most interesting. The US 10 yr yield is now just 10 bps from the May high while the price of oil is still down about 25% from its close high (intraday was about $120).

I’ll emphasize again that the move up in developed market bond yields continues to be global as debts and deficits now matter. The bond bear market continues on. The 10 yr JGB yield closed at a fresh 29 year high at 2.87%. The 10 yr French oat yield has broken out to a 17 yr high at 3.90% up 11 bps today. The 10 yr UK gilt yield is up 10 bps to 4.95% but below its May peak of 5.17%. The German 10 yr yield is up 8 bps to 3.07% though about 12 bps from a 15 yr high.

Oil in orange, US 10 yr yield in white

JGB 10 yr yield

French 10 yr yield

One of my bull cases for commodities has been the expected stock piling I expect to see of a variety of things. A story I read on Bloomberg this morning, “The US Department of Defense is buying lithium for its strategic stockpiles as the nation ramps up efforts to reduce supply risks for critical minerals. The Defense Logistics Agency is seeking offers for almost 36 million pounds, about 16,000 tons, of battery grade lithium carbonate over the next five years in a contract worth as much as $300 million, according to a tender document published on a US government website dated July 2.”