Tens Broke to 5.20%: Yields Higher but Risk Stays Supported

Data: A Mixed Picture That Moves Nobody

There was not much on the data front, just a few pieces of second tier data. The Richmond Fed came out at minus 2 against 5 expected and plus 4 last. New home sales came in at 684,000 against 650,000 expected and 643,000 last. Slightly more significantly, durable goods came in flat month on month against an expectation of negative 0.4 percent and plus 1.1 percent last, with the core reading a little stronger at plus 0.3 percent on the month against 0.6 percent expected and 0.4 percent last.

Overall the economy painted a fairly mixed picture, but this was not data that will move the Fed or the market in either direction.

The Yield Break: 4.95 to 5.20

Wednesday brought an injection of volatility when ten year Treasury yields broke higher. They had been hovering around 4.95 percent, broke through the highs and kept going, all the way to 5.20 percent. There was no real catalyst for the move, just the ongoing trend and worries about fiscal sustainability among global governments and ongoing inflation.

That move pressured risk assets. The S&P fell 1.2 percent and the Nasdaq 1.4 percent. Bitcoin, coming off the back of its big rally, fell 4.3 percent all the way back to 83,500. Since then tens have not really retraced and are still hovering around the highs, but volatility has fallen and there have been no big moves, so the shock has died down. With it, stocks recovered, with the S&P back to 7,750.

Oil: Pushed Around by Headlines

Oil spent the week in a 98 to 108 dollar range, pushed around by geopolitical headlines, with no particular resolution on the horizon in either direction.

SEC: Staking and Buybacks, and a Framework Built by Rule

In crypto news, the SEC issued further guidance on crypto regulation, specifically on how securities law applies to cryptocurrency tokens. It opens the door to legal revenue distribution to holders through staking and through buybacks.

This continues a long list of legal framework creation from the CFTC and the SEC in the wake of CLARITY failing to pass. Those agencies are basically stepping up to create the CLARITY rules in its place, and the rules are becoming very crypto friendly and being pushed through fast. The only downside remains that because this is not going through Congress it is not codified into law and could be undone by a future administration with a less friendly SEC. That is still over two years away, so this should continue to progress during the Trump term.

Bitcoin: Consolidation After the Rally

On the week Bitcoin was really just in consolidation mode, between 87,500 and 82,400. It looks likely to stay in that range without a catalyst to push it either way, which is what would be expected after the big rally: consolidation in the range before the next move.

The level on the topside is really around 89,000, and a push through there should open 95,000. On the downside the bottom of the range is 82,000, through which sits 80,000, and then the big support comes in at 77,000. It is a break of 77,000 that would bring renewed pressure on the downside and break the bullish structure, which currently looks like an uptrend for the foreseeable future.

ETF Flows: 2026 Flips Back Into Positive Territory

Notably, the week brought very strong ETF flows at 2.39 billion dollars of inflows. That flipped 2026 flows back into positive territory, having been at negative 5.8 billion dollars at the worst point in July. The year to date deficit has been fully recovered and then some.

Total ETF net asset value is now 108 billion dollars. That is still some way off the peak of 152 billion, but that peak came when Bitcoin was at its highs of 125,000.

Options: Vol Still Depressed, the Gap Narrows

DVol is still depressed, trading around 35. The option smile is relatively symmetrical, with five delta calls around 39 percent. Implied volatility is still trading under realised, although the gap has closed somewhat. It had widened to 7 points, which is pretty severe, but Bitcoin volatility has died down over the last few days and implied is now about 1 to 1.5 points under realised. That still tells us there is little value in selling at these levels.

This Week: A Heavy Data Calendar

This coming week is quite a heavy data week. Wednesday brings PCE, core PCE, GDP and Chicago PMI. Thursday brings ISM manufacturing. Friday brings non farm payrolls. It is a big week that will probably determine the direction for US yields and give more insight into the Fed’s next move.

DeFi: Ethena

USDe stands at 4.94 billion dollars in circulation and is currently generating a 4.94 percent yield.