Higher for longer

Two events. One, US government shutdown is looming from Oct 01. Two, Evergrande failed to honor onshore bond repayment. There is no need to bite nails on the former in my view. But what can make you bite nails is the fact the world almost accepted that CBs would keep interest rates higher for longer.?

European bond yields are at the multi-year highs. The 10 years US Treasury yields hit a peak of 2007-2008 crisis and were at 4.566%.?The U.S. dollar hit a?10-month high at 106.2, as surging yields attracted interest in the US currency. You can check strength of the dollar against other currencies separately, but I must mention the 1US dollar is equivalent of 148.97 yen.150 yen a dollar is seen as a red line and will spur Japanese authorities into action.?

Oil prices fell as a strong dollar heightened fears of prolonged higher interest rates that can damage demand.?Brent crude was down 1.24%, at $92.13 a barrel. The momentary weakness should not last long. Why do I say so? Oil has seen rally of 30% in the last 100 days or so. Oil supply continues to be tight, Russia and Saudi Arabia prolonged production cuts to the end of the year. Gold slid below $1,915 an ounce.?

As expected, the non-ferrous metals fell today, thanks to firm dollar and sentiment around the Chinese property sector. Zinc is an exception. Combined inventories of copper on the LME and ShFE rose nearly 60% since Aug at 218,065 tons. This indicates weak physical demand, and strong contango. Cash copper is traded at discount of $71 to 3M copper on the LME. This is 31-year high contango. In another related news, CSPT maintained CY Q4 guidance for TC / RC at 95/9.5, a six-year high. 3M copper in London was down by more than half a percent below $8,100 a ton, but regained momentum at $8,130 a ton. 3M Ali eased to $2,220 a ton but managed to gather some strength to be at $2,238 a ton. Nickel dipped below $19,000 per ton, a nearly two-year low.?