Truce Lapses: 30-Year Yield at 5.32%, a 19-Year High; Brent Tops $91
The 30-year Treasury yield climbed to 5.321% during Asian hours, its highest level since 2007, while the 10-year tested 4.735% intraday before settling at 4.729%. The trigger was the lapse of the temporary US-Iran ceasefire, which Washington declined to extend, alongside Tehran's announcement that it is shifting to a "fully offensive" military posture; overnight, UKMTO reported that a vessel in the Strait of Hormuz was hit by an unidentified projectile, with one crew casualty. What is new today is not the chokepoint itself but where the bill is landing: the latest 30-year auction cleared at 5.216%, a 25-year peak, and the second leg of the selloff is not the war at all but the US budget deficit and the wave of corporate issuance funding the AI capex build.
The market response is showing up in energy and in premarket futures. Brent rose 0.3% to $91.14, its highest since July 30, and WTI climbed to $85.04 — but the real squeeze is in products rather than crude, with the US diesel crack topping $100 for the first time ever and setting a record at $102.20 a barrel intraday Monday. The mechanism is inventories and capacity: US distillate stocks stood at 107.1 million barrels on August 7, the lowest for this time of year since 1996, while global refinery runs averaged 80.9 million barrels a day in July, roughly 5 million bpd below a year earlier. Ahead of the open, Nasdaq 100 futures are down 0.91%, S&P 500 futures 0.51% and Dow futures 0.10% — the selling is concentrated in the most rate-sensitive corner of the market.
