Fri: the flash composite PMI fell to 57.6, nothing triggered, and Brent's jump to $117 lifted yields.
Written Monday October 26, covering Friday October 23; the plan was committed Friday before the 9:45 AM ET releases. The S&P Global flash composite was 57.6 against 58.4 (Kitco, Seoul Economic Daily), inside the no-call band. Grade: nothing triggered. December Brent rose 3.5 percent to $117.12 and the 10-year 3.5 basis points to 4.988 percent, mostly breakevens (FRED). Michigan final 48.0 (UMich). The DFII10 2.84 statement was falsified; the T10YIE statement survived, not cleanly met.
Written Monday October 26, covering Friday October 23. The plan graded below was committed Friday October 23, before the 9:45 AM ET releases. Every Friday price here comes from Friday's session; nothing from Monday is used to grade Friday. Drafted Monday evening; built and committed before the US open on Tuesday October 27, with no Tuesday data used. The S&P Global flash US composite PMI for October came in at 57.6, down from September's 58.4 and well inside the band where the plan made no call. Grade: nothing triggered, for the third session running. The day's real mover was oil: December Brent rose 3.5 percent to $117.12 at 4:00 PM ET, and yields rose with it, the 10-year by 3.5 basis points to 4.988 percent.
This continues Thursday's note, where the 10-year fell 19.3 basis points on an equity sell-off. Friday took back about a fifth of that, and this time the rise came with oil, not with stocks.
What the data said
- S&P Global flash US PMIs, October. Composite output 57.6, down 0.8 from September's 58.4; services business activity 57.9 (September 58.8); manufacturing PMI 56.0, up from 55.9 and its highest in 53 months; manufacturing output 55.8. We could not open S&P Global's own release page (it returned 403), so these figures come from Kitco News and the Seoul Economic Daily, which agree on every number they both report. The same coverage quotes S&P Global's Chris Williamson saying the economy "continued to boom at the start of the fourth quarter" and that selling prices rose at the fastest pace since August 2022. investingLive put services expectations at 58.0. The plan dated the release 9:45 AM ET from secondary listings; we did not confirm the time from S&P Global. For how the flash survey relates to ISM, see flash PMIs vs ISM.
- University of Michigan, final October, 10:00 AM ET. Sentiment 48.0, up from the preliminary 46.3 and against 48.1 in September; current conditions 46.7 (September 50.9); expectations 48.8 (September 46.3). Year-ahead inflation expectations 4.7 percent (September 4.6), long-run 3.5 percent (September 3.4), "highest readings since May" (source: University of Michigan Surveys of Consumers). Recorded, not graded. Background on the survey is in inflation-expectations surveys.
- CFTC Commitments of Traders (positions as of Tuesday October 20, released Friday). Non-commercial euro futures: 226,421 long, 360,945 short, a net short of 134,524 contracts, 3,049 smaller than a week earlier. Yen: net long 69,878, up from 50,207 (source: CFTC legacy futures-only report). Recorded, not graded. Method in the COT positioning guide.
The tape
| Market | Thu Oct 22 | Fri Oct 23 | Change |
|---|---|---|---|
| 5Y yield (close) | 4.768% | 4.805% | +3.7 bp |
| 10Y yield (close) | 4.953% | 4.988% | +3.5 bp |
| 30Y yield (close) | 5.287% | 5.315% | +2.8 bp |
| DXY (4 PM ET) | 101.631 | 101.799 | +0.17% |
| Gold (GC=F, 4 PM ET) | 4,044.4 | 4,013.3 | -31.1 (-0.77%) |
| USD/JPY (4 PM ET) | 156.87 | 156.83 | -0.02% |
| EUR/USD (4 PM ET) | 1.1220 | 1.1198 | -0.20% |
| Brent, December (BZZ26, 4 PM ET) | 113.12 | 117.12 | +3.54% |
| Brent, January (BZF27, 4 PM ET) | 108.69 | 111.94 | +2.99% |
| Natural gas, November (NGX26, 4 PM ET) | 2.786 | 2.628 | -5.67% |
| S&P 500 (close) | 7,663.43 | 7,623.68 | -0.52% |
Sources: Yahoo Finance query1. Yields and the S&P 500 are daily closes (^FVX, ^TNX, ^TYX, ^GSPC). Everything else is the 4:00 PM ET print, the close of the 3:30 PM 30-minute bar; Thursday's column uses the same convention, so it differs slightly from Thursday's table, which took the hourly bar that ends at 5:00 PM. Brent and gas are quoted by contract month because Yahoo's continuous BZ=F and NG=F rolled overnight into Friday. The Nasdaq fell 0.21 percent to 25,955.34 (^IXIC).
Grading the plan
The plan had one leg: the flash composite against September's final 58.4, with thresholds 3.0 points either side. At 55.4 or lower, the 5- and 10-year yields close below Thursday's 4.768 and 4.953 percent; at 61.4 or higher, above them; from 55.5 to 61.3, no call. Classification: composite 57.6, neither.
| Line in the map | Expected | Actual | Grade |
|---|---|---|---|
| Weak (≤ 55.4): ^FVX below 4.768% | if triggered | composite 57.6 | Not triggered |
| Weak (≤ 55.4): ^TNX below 4.953% | if triggered | composite 57.6 | Not triggered |
| Strong (≥ 61.4): ^FVX above 4.768% | if triggered | composite 57.6 | Not triggered |
| Strong (≥ 61.4): ^TNX above 4.953% | if triggered | composite 57.6 | Not triggered |
| Neither (55.5 to 61.3) | no call | 57.6; ^FVX 4.805%, ^TNX 4.988% | No call |
Grade: nothing triggered. No hits, no misses, nothing void. Michigan, the CFTC report and the European PMIs were recorded, not graded, as the plan said. Worth saying plainly: the composite fell, and yields rose. Had the band been narrow enough to call 57.6 "weak," the plan would have graded two misses.
Event-window record, as the plan specified (not graded): ^FVX opened the 9:20 AM bar at 4.787 percent and the 10:20 AM bar at 4.803, up 1.6 basis points; ^TNX went from 4.970 to 4.988, up 1.8. DXY opened the 9:30 AM bar at 101.721 and the 10:30 AM bar at 101.760 (Yahoo 30-minute bars). Small, and in the opposite direction to the composite's fall. Why we record but do not grade this window is covered in event windows.
Oil did the work
On Treasury's curves, the 10-year nominal yield rose 4 basis points to 5.00 percent and the 10-year real yield 2 to 2.66; the 5-year nominal rose 4 to 4.82 and the 5-year real only 1 to 2.34 (nominal, real). FRED shows the 5-year breakeven up 3 basis points to 2.48, the 10-year up 2 to 2.34, and the 5-year, 5-year forward up 1 to 2.20 (FRED T5YIE, T10YIE, T5YIFR, via our proxy). So the short end of the rise was mostly inflation compensation, the shape you would expect from a $4 oil move.
The named cause, from investingLive, not verified by us: worries about escalation with Iran, with Brent "hitting the highest since May at $117," and a pre-close rally remark from President Trump about a "little Epic Fury," which the outlet linked to reports of a short bombing campaign. investingLive wrote that the oil jump "lifted Treasury yields" and put WTI up $4.01 to $103.47. Gold fell $31 at 4:00 PM, the second day it fell while oil rose. How oil feeds through to inflation gauges is in oil-inflation transmission.
Open statements: one falsified, one survived
- The 10-year real yield at or above 2.84: falsified. The October 19 note said that if DFII10 closed at or above 2.84 on any day from October 21 to 23, the mid-October real-yield fall was a temporary haven bid that had fully reversed. It was wrong if DFII10 stayed below 2.84 on every day in the span. FRED: 2.76, 2.64, 2.66. Wrong.
- The 10-year breakeven below 2.38: not falsified, not cleanly met. The October 15 note said the breakeven would stay at or below 2.35 through October 23 while Brent stayed above $100, and was wrong at 2.38 or higher. T10YIE from October 16: 2.35, 2.35, 2.35, 2.37, 2.32, 2.34. The falsifier never printed, but the condition broke on October 21 at 2.37. As with the October 8-9 statement, graded the same way in the October 15 note, we grade it not falsified, not cleanly met, and do not count it as a hit.
What we do not know
- The flash PMI from S&P Global directly. Two outlets agree on the numbers; we have not read the release.
- Whether the oil headlines were the cause of the yield rise. The timing fits; we did not tie the yield path to specific headline times.
- Why gold keeps falling with oil rising. Same open question as Thursday.
What would change the read
This note is written after Monday's close, so it makes no forward statement of its own. No plan was registered for Monday; the Monday session, and the conditional statements for the rest of the week, are in the Monday note.
What to read alongside
Nothing on this site is investment advice or a recommendation to trade. Most retail traders lose money. Conditional statements published here are falsifiable hypotheses, graded in public, not signals.