Oil at $100, 10-year Yield at 4.8% Era Arrives

The U.S. 10-year Treasury yield surpassed 4.81%, putting significant pressure on the market. Oil prices also exceeded $100 per barrel for Brent crude, intensifying inflationary pressure.

This rise in interest rates has led to concerns that it could exceed what the market can bear. Experts diagnose that the possibility of bond yields rising to 5% should also be considered.

Concerns over crude oil supply increased as the possibility of conflict between U.S. forces and Iranian vessels emerged in the Middle East.

At the same time, China's crude oil purchases, which had been quiet, resumed, leading to a sharp increase in demand. This situation, where supply decreases and demand increases, is pointed out as the main reason fueling the surge in oil prices.

If this amount does not meet market expectations, market participants' disappointment could grow.

This, coupled with large corporate bond issuance volumes, could become an additional factor of instability in the market. If the Treasury's buyback is more passive than expected, the effect of improving liquidity in the Treasury market could be limited.

This means that the relative attractiveness of government bonds has increased.

Rising Treasury yields can enhance their appeal, leading investors to return to safe-haven assets. Conversely, it could exert additional upward pressure on corporate bond yields, potentially burdening corporate fundraising.

The possibility of unwinding yen carry trades is raised in conjunction with potential interest rate hikes in Japan.

Yen carry trades involve borrowing low-interest yen to invest in other higher-yielding assets, and pressure to unwind increases if the yen's value rises. This means investors may sell overseas assets, such as U.S. stocks, to repay yen-denominated debts.

Consequently, it could negatively impact the U.S. stock market. If a stronger yen materializes, significant changes in global capital flows are expected.

In particular, the return of Japanese funds could accelerate, affecting overall market liquidity and increasing volatility.

SK Hynix stock price is up 3%, but no major new announcements have been confirmed. The recent rise in semiconductor memory prices is analyzed as the main reason for SK Hynix's stock price increase.

Expectations for a recovery in the memory semiconductor market are believed to have positively influenced investor sentiment. Amid an overall market decline, the semiconductor sector appears to be maintaining a relatively robust trend.

However, a decline in gold prices and macroeconomic uncertainties are complex factors at play.

There is a structural problem that a favorable environment for gold mining companies is created only when gold prices rise and the dollar weakens simultaneously. Currently, with gold prices retreating and the dollar strengthening, it could burden gold mining companies like GFI.

The overall stock market, excluding the memory semiconductor sector, is likely to decline. The high level of the 10-year Treasury yield at 4.8% will inevitably burden the stock market.

If the dollar's strength continues, foreign investors may incur real losses when converted to dollars. This could lead to capital outflows, putting additional downward pressure on the stock market.

Investors need a cautious approach, considering the macroeconomic environment of high interest rates and a strong dollar.

The interest rate levels during this period are very unusual and are considered a serious crisis situation.

2007 was the period immediately before the financial crisis, and the current interest rate hike indicates economic pressure at a level similar to the past. This reminds market participants of past crisis situations, which can negatively affect investor sentiment.