Don’t worry. Donald Trump’s not going to kill off an “entire civilization” tonight. Nor tomorrow night. Nor any night before November 3.
“I want to make it clear to everybody that… we will not be attacking Iran at any time prior to the Midterm Elections,” Trump said Thursday, in a social media post plainly aimed at allaying market concerns tied to multiple reports suggesting the US could resume major combat operations against the Guards in the coming days or weeks.
In the same message, Trump claimed for the however-manyth time that his envoys are engaged in “productive discussions” with the IRGC, an ad nauseam contention the Guards habitually dispute. Trump was keen to highlight Iran’s parlous economic plight and reiterated, in all-caps, that the country won’t get a nuke.
He also put a number on the amount of oil that made it through the Strait of Hormuz on Wednesday evening: 22 million barrels, “with not one barrel coming from, or going to, Iran!”
If true (and by all accounts it is in fact the case that oil, if not refined products, is getting through at rates close to pre-war levels), that’s quite the feat. And it speaks to the notion that, as discussed in the linked article above, Trump may be able to wait the Guards out as hyperinflation takes hold in Iran.
Whatever the case, Trump’s post was well-received by bonds, which rallied as oil retraced some of the day’s advance. About 45 minutes after Trump clarified the timeline on his next attempt to throttle the rabid badger he and Pete Hegseth cornered earlier this year, Scott Bessent managed another respectable auction.
Thursday’s 30-year reopening boasted non-dealer bidding of 93.2%, indicative of strong end-user demand for an offering that sported the highest yield for any long bond sale in 26 years. Dealers were left with 6.8%. Recall that last month’s long bond sale saw the lowest dealers on record, just 2.2%.
As an aside, note the outlier on the chart: The infamous November 9, 2023, debacle that saw dealers stuck with nearly a quarter of a sale that tailed by more than 5bps.
If I thought he was this savvy, I’d suggest Trump’s social media post was aimed at influencing the auction. After all, Thursday morning’s price action reinforced the notion that, all bigger-picture fiscal concerns aside, the daily swings in bond land are still very much tethered to crude. A resumption of major combat operations in the Gulf would suggest triple-digit oil’s here to stay for a while longer.
Whatever the case, all three of this week’s Treasury supply events came and went without incident, with Wednesday’s 10-year sale standing out as particularly strong. That’s a major relief at a time when, as one observer indelicately put it, “the world’s safest instruments act as if they have no bid most days.”
Meanwhile, in that other gulf, 25% of regional oil production was suspended as of Thursday morning in anticipation of Hurricane Isaias. You needn’t fret too much, though: Worse comes to worst, Trump can always nuke it.
Or use his magic sharpie to redraw the path and send it back to Mexico (or Iran depending on how powerful the sharpie is).
This is good.
Hurricane America.
His mind is like a maze and even he gets lost in it most of the time. Yes. No. Maybe. Where was I?
I think you nailed it!
Sounds like Israel will be bombing Iran well before US elections, likely be suspending elections and US will follow Israel if Iran substantially responds.
I think it’s a feint. Trump’s military strategy is as limited as his vocabulary. Say you’re not going to attack and you want to negotiate, then attack.
Hurricanes are a Chinese hoax.
Has anyone seen how much the Hormuz operation is costing us on a daily basis? Sure, oil is getting out, close to pre-war levels, but not in the same operational way it was pre-war. The US military thought they were being exploited for oil before? They are litterally escorting oil tankers. Now that’s what I call defending the Constitution!
He’s a man with a plan
Got a counterfeit dollar in his hand
He’s Misstra Know-It-All
Playing hard, talking fast
Making sure that he won’t be the last
He’s Misstra Know-It-All.
Makes a deal with a smile
Knowing all the time that his lie’s a mile
He’s Misstra Know-It-All
Must be seen, there’s no doubt
He’s the coolest one with the biggest mouth
He’s Misstra Know-It-All
When you tell him he’s living fast
He will say, “What do you know?
If you had my kind of cash
You’d have more than one place to go”
Ooh-ooh-ooh-ooh-ooh
Any place, he will play
His only concern is how much you’ll pay
He’s Misstra Know-It-All
If he shakes on a bet
He’s the kind of dude that won’t pay his debt
Oh, He’s Misstra Know-It-All
— Stevie Wonder (1974).
He has conceded to losing the midterms and is handing the dems a pile of stink. They will get claimed for high inflation come next presidential election. Now we can inflate our way out of the debt. Wage inflation due to immigration cutting off labor and other inflation due to Canada. Dumb luck or master plan.
My read on the auction was a little different. The QRAs have reduced the 10y and 30y auctions enough that the supply meets mandated buying by pensions, collateral requirements of various types, and Bessent’s share buybacks, oops, I meant the minor signalling of Government bond buybacks of double the size, and so forth. It appears the entire finance media universe is trying hard to sell us and each other bonds (Everyone should do their part! Financial media knows who butters their bread.)
While it appears demand was solid and dealers didn’t have to absorb an outsized position, there has been nothing on the fiscal side to actually relieve any financing pressure, nor US credibility and the November QRA will be closely watched for Bessent’s blinking. And he has assured us, the Nov QRA will look like July again.
Count me as skeptical. As always.
What do you mean the QRAs “have reduced the 10Y and 30Y auctions”? There hasn’t been a reduction in nominal auction sizes since the August 2022 QRA?
I see The House has hired Judy Shelton as an advisor on, ostensibly, China and FX.
Yeah, so that’s Judy and David Z. in the space of a month. I guess it’s Kudlow and Moore next. This feels so deliberate on most days that you can’t help but think they’re just trolling everybody. It long since became impossible to satirize any aspect of “Trump 2.0.” The facts are far sillier than any caricatured version of them.