Rising oil prices and a 5% 10-year Treasury yield are pressuring risk assets, with Bitcoin falling 4% as markets price in higher inflation and aggressive Fed rate hike expectations.
WTI crude surged to $105.83 after Saudi Arabia shut its East-West pipeline following Houthi attacks, tightening supply and adding to inflation concerns.
The 10-year Treasury yield reached 5%, its highest since 2007, driven by hotter core CPI and a jump in Fed rate hike odds to 90%.
Brent climbed to $108.75 as the pipeline closure and canceled September cargoes for European refiners reinforced supply disruption fears.
Bitcoin declined roughly 4% as WTI jumped to $103.60 and the 10-year Treasury yield hit 5%, with a $288 million long liquidation cascade following the CLARITY Act vote failure.
The 30-year Treasury yield hit 5.36%, its highest level in 19 years, as long-end inflation expectations rose alongside oil prices.
Gold fell despite geopolitical tensions as the 10-year Treasury yield at 5% and rising real rates weighed on the metal.
Saudi Aramco has not provided a restart timeline for the East-West pipeline after Houthi attacks, creating operational uncertainty despite higher oil prices.
Global markets face intense pressure as Saudi Arabia's East-West pipeline closure drives WTI crude to $105.83, fueling inflation concerns. The 10-year Treasury yield climbed to 5%, its highest level since 2007, triggering a sell-off in risk assets including Bitcoin, which dropped 4% following the failure of the CLARITY Act.
The pipeline is a critical conduit for Saudi crude, and its closure due to Houthi attacks has tightened supply, canceled European cargoes, and spiked oil prices, which in turn exacerbates global inflation concerns.
Bitcoin is currently showing a high sensitivity to macro factors; as the 10-year Treasury yield rises, the opportunity cost of holding risk assets increases, leading to downward pressure on crypto prices.