Through the ceiling
Bond yields went through a ceiling this week and the rest of the market shrugged. The US 10-year Treasury yield climbed 19 basis points to 5.18%, its highest level since 2007, as the bond market kept repricing after the Fed's first hike since 2023. In most weeks that would have been the whole story.
Instead, 127 of the 194 markets Kinzan tracks finished higher. The Nasdaq 100 rose 3.25%, and crypto had an even bigger week, with the coins Kinzan follows up 14.7% on average. Higher rates are supposed to cool speculation; this week, the market was not listening.
Tech and crypto ignore the bond market
The tone was set on Monday, when Meta jumped 11.3% in a single session, its best day in more than a year. Tech carried the indices from there: the Nasdaq 100 comfortably beat the S&P 500, which rose 1.2%, and Rocket Lab was the best of the stocks Kinzan tracks, up 14.5%.
Not everything rose. Novo Nordisk fell 10.3%, the worst of the stocks Kinzan tracks, Oracle lost 7.1%, and Charles Schwab dropped 6.11% on Tuesday alone. McDonald's closed the week at its lowest level in Kinzan's four-month window.
Crypto's rally broadened out. The week before, a few names did the lifting; this week almost every coin rose. Bitcoin Cash gained 34.5%, NEAR another 31.6% on top of its previous surge, and Avalanche 29.9%, with Litecoin and NEAR both closing at their highest levels in the window. Bitcoin itself rose a steadier 3.9%.
Higher US yields did the expected damage elsewhere. The dollar rose 3.35% against the Mexican peso, a 4.4σ week and the most unusual move on the board, and 6% against the Colombian peso. Precious metals slipped, with gold down 2.3% and silver 3.5%, while natural gas was the best commodity at 9.75%. Oil was choppy, falling early in the week before steadying.
A Saturday shock
The week's biggest quake came on a Saturday, when most markets were shut: Avalanche jumped 23% on 19 September, a 7.3σ move against its own volatility. Bitcoin Cash followed with a 29.3% session on Tuesday, and natural gas added 9.06% on Thursday.
Everyone is long tech
Speculators are as long Nasdaq 100 futures as they have been at any point in their own history, by the CFTC's Tuesday snapshot, and nearly as crowded in copper. Natural gas sits at the other extreme, and sterling positioning is near its lowest. A crowd that long, in a market rallying through rising yields, has a lot riding on next week's data.
Inflation, then jobs
Next week is a big one for data. Australia's central bank sets rates on Tuesday, and Wednesday brings Australian inflation and the US core PCE price index, the Fed's preferred inflation gauge. Friday's US jobs report closes the week: after a hike and a jump in yields, it will show whether the economy is starting to feel them.
Watch the Australian dollar into the rate decision; it was the weakest currency pair on the board this week.
That's the week, dug out. The Dig is back next Sunday. Follow The Dig by RSS.
Background checked against CNBC, Yahoo Finance, FXStreet, Invezz. Every figure is Kinzan's own; see the methodology.
Analysis, not investment advice: nothing in The Dig is a recommendation or an offer to trade.