Wealthion Macro Bites – Oil Prices Now Driving Treasury Yields, FT Data Shows

The FT reports the correlation between Brent crude and 10-year Treasury yields has reached its tightest since 1990.  The Iran standoff is setting the oil price, and the oil price is now shaping bond market yields.  The 10-year yield touched 5.272% on Monday (highest since '07).  However, the yield curve is approaching inversion as the market begins to price in risks of rate hikes stalling the economy.  Japan's 40-year bond auction drew its strongest demand since 2020 suggesting some buyers see value in duration.

On Monday, Nashwauk Minnesota-based mining and steelmaking company Mesabi Metallics (backed by India’s Essar Group) announced at an Oval Office summit of steel industry executives its plans to build a $15B mega-steel plant in eastern Iowa, which is projected to become the largest steelmaking facility in U.S. history.  The corporate initiative is central to the Trump administration’s “100% American mined, melted, and poured" supply chain designed to re-shore critical steel manufacturing. The steel mill will be supplied entirely by Mesabi Metallics’ newly opened $2.5B iron ore mine and pellet plant also located in Nashwauk. The U.S. Export-Import Bank is providing up to $10B in financing to back the expansion.

On Monday, China’s Ministry of industry and Information Technology published the 15th Five-Year Plan (2026–2030) for the new-type battery industry targeting initial large-scale commercialization of all-solid-state batteries by 2030.  The plan outlines 19 priority tasks focused on commercializing next-generation technologies and scaling supply chains.  Key targets established for ‘30 include: achieving initial large-scale industrial application of all-solid state batteries and developing long-life lithium batteries capable of reaching a 15,000 charge-discharge cycle life.  To reinforce these R&D goals, China is simultaneously leveraging tax exemptions for sodium-ion and solid-state tech through 2028, while phasing in consumption taxes on legacy lithium chemistries.

AI watch:  Bloomberg reports China has expanded travel restrictions to cover the families of top AI researchers and engineers, broadening a national-security measure that previously applied only to the talent themselves.  The policy risks stalling overseas recruitment and joint ventures at a time when Beijing is racing to close the gap with US chipmakers.