特朗普拒绝延长伊朗停火，30年期美债收益率创2007年来新高

Good morning. This is horizons, Middle East and Africa. Our top stories this morning. Peace prospects dim. President Trump rules out extending the Iran truce as the 60 day window expires. Washington and Tehran remain divided over Hermas and Iran's nuclear program. Bond selloff deepens 30 year Treasury yields hit the highest since 2007. Fiscal concerns, sticky inflation and heavy borrowing pushed long term rates higher.

Plus, BP's full year profit jumps by almost a third as the world's biggest miner gets a boost from rising copper prices. We will hear from the CEO Brendan Craig, later on. The show is just gone 8 a.m. across the Emirates. I'm a bit of a nomad in Dubai. A lot of fluctuations in markets. This morning we saw S&P futures a little bit flat earlier. Now they're 3/10 lower. Now that follows a negative session in the S&P 500 yesterday.

Nasdaq was 100. Was also in the red at the close yesterday. One gauge that was in the green was the Sox index more than 1% higher at the close. And this is because of those anthropic numbers that Bloomberg had reported about $65 billion in revenue, annualized revenue, according to Bloomberg sources. So that really affected chip makers, and that is why the Sox index was rising. And then when we look at Asian stocks this morning, they were rising earlier.

Now they're about 8/10 lower. The cost B was at 1.3% higher at the open after it was closed yesterday. But this but as of this point it's about 1% lower. Brent crude of course a third day in the green about 8/10 higher. More than $90 on the barrel. The freshest attack came this morning. The UK Navy reporting that an attack in the Strait of Hormuz had had occurred. A casualty had occurred. Of course, we keep an eye on the wider negotiations on those negotiations between Oman and Iran and the mechanism to reopen the Strait of Hormuz.

Of course, we will be talking about that momentarily. But the story this morning is really with the yields. Now, the U.S. 30 year yields are not doing much this morning about a basis points higher. But that follows, uh, the yield rising on those notes to 5.31%. We're now seeing them at 5.32%. But yesterday six basis points higher. Now multiple reasons leading to that surge in government spending, a flood of long dated bond sales and sticky inflation are leading to that and also affecting bonds in Asia this morning Australia, New Zealand we're seeing similar moves.

And so a big story for us to watch this morning. And I'm sure Winnie Sue in Hong Kong will tell us more about that. And wider market moves in Asia. Winnie, what do you have for us? Yeah. Good morning Iberia. As you just mentioned, we are seeing Asian stocks turning more negative right now and that it's driven by that macro environment with higher oil prices, renewed geopolitical tensions, and of course, the higher yield environment.

And that is particularly bad for tech stocks given the valuation. And that's why you're seeing the tech gauge in Japan here are down about 1.8% leading losses here in Asia. Now, when it comes to the bonds front, you just mentioned how it's really tracking those losses in the treasuries. And we can see that across the region from Australia to here in Japan all falling in. Worth noting that the ten year JGB yield here inching closer to that 3%, which is something that we are very closely watching out for as traders see that as potentially a danger zone.

Now, before we take a look at the summary of the China eco data that came out yesterday afternoon. Now it's pretty much a very disappointing picture. Missing estimates among major gauges. That is coming already at a very low expectation. And you're looking at industrial production, fixed asset investments as well as retail sales all missing when it comes to industrial production, for example, here up about 4.5%, missing an estimate of 5%.

Well, another disappointment here at retail sales, um, a rising 0.6%, also lower than that 1.5% estimate. So overall, it's still pointing to that picture of how outside of text, um, outside of the tech, um, sector, pretty much weakness across the board. And that is also pointing to that key shape trend that we are seeing in the Chinese economy, and perhaps that the government will have to step up their stimulus support to be able to reach that growth target that they have for the year.

And that's why we did see the U. N also extending some gains after these data come through. Back to you up here. All right. Bloomberg's Renee Sue in Hong Kong. She'll be back with us in 30 minutes or so. Now turning back to the bond story, the yield on 30 year U.S. treasuries hit the highest in almost two decades, reflecting investor angst over surging government spending and inflation. For more on this, we're now joined by Mark Cranfield, Bloomberg Am Live strategist.

Mark, good morning. Good to have you with us, especially this morning with these massive moves that we're seeing across treasuries but also bonds in Asia. Should we expect 5.31% or 5.32% at this point to be the new norm when it comes to the long term yields in the United States? Solving this issue, you've got a negative feedback loop here which is building up between oil prices, the spreads the Treasury yields, the auctions which that we've had and some coming up as well.

And the fact that we don't see much chance of a peace agreement in the Middle East anywhere, anytime soon. So they're just feeding into one another. On top of all that, as you mentioned, there are concerns about fiscal management, particularly in the United States. They just seem to be allowing the deficit to get wider and wider. So last week, we saw that those ten on 30 year Treasury yields ahead to produce extremely high yields to get the auctions sold.

And yet third year, you know, it's already higher again this week. And we have a 20 year auction coming up which is usually more difficult to sell even than the 30 year auction. It's not a particularly liked sector of the of the Cup. And we have a Japanese 20 year auction less than 24 hours later. So pretty tough week for fixed income investors looking at both of those. There's a lot more talk now among traders about these oil spreads, which are statewide and seems to be getting worse that the difference between.

Crude oil and gas. Oil. And diesel. Now, the reason why this is so concerning is because in the United States, especially with the driving season going on, the diesel issue is particularly one that transportation costs will continue to go up unless those price can start to contract. And there's no particular sign of that because of the shortages. Of course, they also sprayed emerging markets as well who are heavily reliant on that.

So that's all feeding back into the risk that inflation stays higher for longer. That hurts the duration of bonds, particularly keeping the the premium for the term premium much higher as well. And when you have no particular incentive for people to to stop worrying about Hormuz and the whole Middle East situation, that's not going to get any better either. So it just becomes a vicious circle and somebody needs to stop it until then.

Yields are going to stay very high. So Mark speaking of someone needs to stop it. What does this whole thing mean for the Federal Reserve then. And the next move in in September. It puts them in a in a very tricky spot because they you can see they've had some, some weakest data. Retail sales inflation numbers came in a little bit below expectations. Consumer confidence is not that great. They can they can look at some of their raw data.

And they can see that the the American economy jobs data wasn't too good recently either. So some of that is telling them that they shouldn't be adjusting interest rates at all. They some parts of the American economy is not doing that well, even though the stock market hit record highs recently as well. But they can see what's happening to the long end of the bond market. It puts the