Global Rates

Tokyo is the story, and we are not in it. The Bank of Japan's September hike, which our own analysis called on Aug 3 and which we declined to chase at 42.5c as recently as Monday, now trades at 72c. Reuters reports that the joint Japan-US yen intervention and Treasury Secretary Bessent's public preference for an early move have all but locked it in, layered on a July summary of opinions in which at least three of the nine board members argued for tightening faster than the current pace of roughly two hikes a year. Nothing in that chain of reasoning was beyond us; we wrote most of it on this page. What we lacked was attendance — there was no letter Tuesday and none Wednesday, and the entire repricing happened inside that blackout. It is retired from the watchlist today as a completed miss, with the number written down: 40c when we flagged it, 72c now. A footnote that matters for anyone reading third-party odds: an aggregator was still publishing 23.5% for the September hike while Polymarket printed 72. That is exactly the class of unverified number our Aug 6 verification rule exists to catch, and it is why we quote the source or nothing. Elsewhere the global picture has flipped back toward energy. Vessels were attacked in the Red Sea and the Gulf of Oman, Brent is near $90 and WTI reached a seven-day high around $84.6, even while diplomats describe the Iran-Oman shipping-lane talks as being in their final stages. Iranian officials continue to insist the Strait reopens only once five preconditions are met. Developed long ends have followed the oil, not the labour data: the US 10-year is back to about 4.69% despite a benign US CPI print of 3.4% headline and 2.5% core. That combination — soft consumer prices, hard energy, firm long end — is a term-premium market, not a policy-rate market, and it is why our biggest position sits at 68c and +$78.0. The ECB September hike is unchanged at 86.5c, still a closed chapter. We screened the most liquid non-Fed market on the board, Hormuz normalization by Sep 30 at 16.5c on $133K a day, and refused it in both directions for reasons we set out below. No global trade.