The Rout Went Global

The bond selloff went global overnight. Japanese ten-year yields touched 3% for the first time since 1996 and gilts ran eleven basis points to 5.25%. Treasuries followed. The US ten-year is 4.79%, a fifth straight session higher and the most since January 2025, with the long bond back over 5.30%. ISM manufacturing and JOLTS at ten, payrolls Friday. SPX closed 7,686 yesterday, down a third of a percent, and still finished August up two and a half. Premarket 7,646, down forty.

Four sessions ago Trump said the Hormuz mines were cleared and ten million barrels had moved through in a day. Overnight a supertanker caught fire in the southern strait after striking two of them. Iran has hit the UAE as well as Jordan, and Trump has extended his threats to Kharg Island, Iran's main export terminal. Brent $91.28, WTI $86.57. What matters for rates is that late August had just broken the pattern where oil undid every dovish repricing, with sanctions news pushing crude lower four days running. That break lasted a week, and hike odds are now near two in three against 40% a week ago.

Premarket is forty-nine points under the flip at 7,695, the widest gap beneath it since Aug 18. The put wall prints 7,650, four points overhead, the largest node on the profile and bigger in absolute terms than the call wall. Read it as at price, not resistance. Most reactive level of the session. Underneath is the problem. 7,625 carries almost the same weight, and the flip down to 7,450 sums to nearly 24,000 against about 4,000 of positive gamma above it, the heaviest downside of this run. The call wall at 7,705 is small, but the band above it sums four and a half times the wall, so clearing it would pull. Fifty-nine points away.

The lean is short into strength, and 7,670 is the place to sell it, where the 21-day average and prior resistance meet. Reclaiming 7,650 gets the tape back to even and nothing more. Longs below are for the levels, not the direction: 7,630 and 7,616 are real prior demand, but the weight under them is the heaviest of this run, with no positive gamma to slow a break. Rallies into 7,670 are for selling until it is taken.