The dominant macro driver overnight was the continued surge in global sovereign yields, with the US 10-year Treasury reaching 5.29% — a multi-decade high — and the 30-year climbing to 5.64%, a 5bp move in a single session. The bear steepening of the curve, with the 2-year slipping 1bp to 4.88% while the long end sold off hard, signals markets are repricing the duration of the 'higher for longer' regime rather than simply pricing a single hike: the fiscal supply argument and sticky energy-driven inflation are forcing a structural re-rating of the term premium. Brent crude at $102.31/bbl and WTI at $92.94 — with oil having traded briefly above $100 — underpin the inflation narrative and complicate any central bank pivot calculus heading into today's US payrolls print.
For Asia-Pacific, the cross-asset pressure is concentrated in rate-sensitive and FX-leveraged sectors. USD/JPY has pushed back to 158.06, a 0.32% move, reflecting the widening US-Japan rate differential despite the BoJ's hawkish meeting opinions; yen weakness is a double-edged input — supportive of Japanese exporter earnings but amplifying imported inflation and complicating BoJ normalisation optics. CNY is pinned at 6.7045, stable for now, but the broader USD bid is a headwind for Asian EM currencies. The Nikkei VIX's sharp 21.3% drop to 21.83 — even as the global VIX ticked up to 16.39 — reflects the idiosyncratic semiconductor-driven rally in Tokyo rather than genuine regional calm, while KOSPI's -0.48% and SGX's -0.68% underperform signal that the bond rout is weighing on financials and rate-sensitive plays across the region.