Yields surge, oil climbs: is a market reality check coming?

Summary

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Podcast Summary: "Yields surge, oil climbs: is a market reality check coming?"

Moving Markets — Julius Baer
Date: May 18, 2026
Host: Bernadette Anderko
Guests: Roman Canciani (Head of Product and Investment Content), Mensor Pochinsi (Head of Technical Analysis)

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Episode Overview

This episode offers a crisp, expert-driven snapshot of global financial markets amidst rising US treasury yields and surging oil prices. Bernadette Anderko speaks with Roman Canciani for global market context and then invites Mensor Pochinsi for a technical analysis. Together, they dissect the causes and implications of recent asset fluctuations, review geopolitical tensions, and assess potential market correction risks.

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Key Discussion Points & Insights

1. Market Recap: Yields, Equities, and Oil Volatility

• Mixed Sentiment: The week was a “tale of two halves” — early optimism (especially in big tech, fueled by the AI narrative) faded, replaced by worries about persistent inflation, climbing yields, and geopolitical tensions.
  Quote:

  “Most major US indices finished lower despite hitting record highs mid week... The S&P 500, the energy sector bucked the trend and actually advanced. That speaks volumes about the impact of oil price volatility.”
  — Roman Canciani (01:14)

• Bond Market Stress: The US 10-year treasury yield surged past 4.60%, hitting a yearly high, reflecting persistent concerns around inflation and the Fed’s stance.
  (01:41)

2. Central Bank Backdrop and Inflation Risks

• Fed Caution: The Chicago Fed president (Austan Goolsbee) openly identified inflation as a broad-based, persistent issue, not driven solely by energy or tariffs.
  Quote:

  “Austan Goolsbee acknowledged that we at the Fed definitely have an inflation problem... fueling worries the Federal Reserve might need to maintain its restrictive monetary policy for longer than anticipated.”
  — Roman Canciani (02:09)

• Broader Impact: European stocks mirrored US concerns, with the Eurostoxx 600 down nearly 1%.
  (02:35)

3. Geopolitics & Oil Prices

• Middle East Tensions: Hopes for Middle East de-escalation faded; increased US naval activity and political rhetoric spooked markets.
  Quote:

  “Concerns about potential disruption to oil supplies immediately translated into high prices, exacerbating those existing inflationary pressures.”
  — Roman Canciani (02:46)

• Asia-Pacific Reflection: Renewed anxieties about Iran led to a selloff, though Samsung’s rebound buoyed the Korean market.
  (03:17–03:31)

4. China and Emerging Markets

• China’s Fade: Despite initial optimism after the US–China summit and decent economic data, lack of concrete policy dampened momentum. Both major mainland indices closed lower, with Hong Kong hit hardest.
  (03:40–04:15)

• Venezuela Debt Story: Venezuela’s proposed $150B debt restructuring sparked a rally in its bonds, as investors bet on renewed international engagement.
  Quote:

  “It's going to be a complex process involving litigation, creditor coordination, and further US sanctions relief.”
  — Roman Canciani (04:25)

5. Looking Forward: What to Watch

• AI & Consumer Focus: Nvidia’s upcoming earnings are critical for the AI/semiconductor narrative; major US retailers (Walmart, Home Depot, Target) will report and shed light on consumer resilience amid inflation.

• PMI Data: The S&P’s global PMI will provide a wider gauge of economic health.

  Quote:

  “Artificial intelligence and consumer resilience will be front and center... These reports will offer crucial insights into whether US consumers are starting to pull back spending amidst higher prices.”
  — Roman Canciani (05:09)

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Technical Market Perspective (with Mensor Pochinsi)

1. US Treasury Yields: Where Next? (06:15–07:33)

• Resistance and Scenario Planning:

  “There is massive resistance around 4.70... We don't expect a swift move back to 5%.”
  — Mensor Pochinsi (06:25)

  • Breaking above 4.70 could open up 5%+ globally, but it's “probably too early.” Instead, expect consolidation and watch for market reactions this week.
  • If yields drop below 4.25%, that would signal a more bullish bond scenario.

2. Gold & Silver Under Pressure (07:33–08:16)

• Key Support Levels:
  • Gold: Support at $4,300 (note: likely a transcription or asset mismatch, but retains context)
  • Silver: Support at $70

  “As long as these levels hold, it's still a consolidation... We expect prices to move higher and the secular uptrend to remain intact.”
  — Mensor Pochinsi (07:38)

3. Semiconductors: Bubble or Bullish? (08:16–10:48)

• No Bubble—Yet:

  “A 100% increase in an industry is no sign of a bubble. When we look at data since 1950, we see that 12 months later, on average, an industry which more than 100% continues to advance.”
  — Mensor Pochinsi (08:23)

  • External indicators do not point to a bubble.
  • Correction Wanted: For a sustained uptrend, some correction (15–20%) would be healthy; relentless parabolic rises risk a bubble dynamic.

  “The worst thing that could happen... is if prices continue to move higher every day... this is the worst time to be invested.”
  — Mensor Pochinsi (09:45)

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Notable Quotes & Memorable Moments

• On Inflation and the Fed:
  “We at the Fed definitely have an inflation problem.”
  — Quoting Austan Goolsbee via Roman Canciani (02:09)

• On Market Sentiment:
  “Initial optimism... quickly gave way to anxieties about persistent inflation, climbing treasury yields, and of course, the escalating geopolitical risks.”
  — Roman Canciani (01:14)

• On Semiconductors & Bubbles:
  “The best thing that could happen for the bulls of semiconductors is if the sector corrects by 15 to 20%, then it would for sure extend the bull market.”
  — Mensor Pochinsi (10:34)

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Key Segment Timestamps

• Intro & Market Wrap: 00:01–05:59
• Technical Analysis with Mensor: 06:08–10:54

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Conclusion

This episode delivers a concise but thorough review of why markets are jittery: persistent inflation, spiking treasury yields, oil volatility tied to geopolitics, and uncertainty around China and emerging markets. For investors, attention should focus on upcoming AI and retail earnings, as well as whether treasury yields break above key resistance. From a technical perspective, consolidation is more likely than imminent surges in rates or metals, while the semiconductor rally is not a bubble—for now.

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Listen for a sharp, balanced market check-up with actionable insights and a calm, analytical tone throughout.

Transcript

[A]

Good morning everyone and welcome to the Moving Markets podcast on Monday 18th May. With me, Bernadette Anderko. Joining me on today's podcast are Roman Canciani, Head of Product and Investment Content at Julius Baer, and our head of Technical analysis, Mensor Pochinsi. Before we get into today's podcast, I'd just like to let you know that our latest View beyond podcast went live this weekend. The AI story Behind us Equity Highs I sat down with Karsten Menke, Head of Next Generation Research at Julius Baer, and Manuel Villas, co Manager of the Julius Baer Next Generation Equity Fund, last week to discuss the rapid development of AI, the unprecedented growth in data center infrastructure, and the evolving dynamics of the global value chain. For anyone interested in the evolution taking place, it's well worth a listen. So why not tune into that on the Moving Markets channel later today. But now let's get back to the latest financial financial markets news. Good morning Roman. Thanks for joining me today.

[B]

Good morning, Bernadette.

[A]

Let's get up to speed with the big picture. How did equity and bond markets perform overall in the past week?

[B]

Well, yes, it was a bit of a tale of two halves really. We saw initial optimism, particularly around those large cap tech names and the AI narrative. But that quickly gave way to anxieties about persistent inflation, climbing treasury yields, and of course, the escalating geopolitical risks. Most major US indices finished lower despite hitting record highs mid week. Not surprisingly, within The S&P 500, the energy sector bucked the trend and actually advanced. That speaks volumes about the impact of oil price volatility. Bond markets felt the heat too, with yields increasing across the board. The 10 year treasury yield climbed to its highest level in over a year, shooting through the $4.60 level this morning.

[A]

So yeah, inflation continues to be a thorn in the side. And one of the triggers for the bond rout was a Fed speaker. Right, we heard from the Chicago Fed president. What was his assessment?

[B]

Yes sir, Austan Goolsbee acknowledged that we at the Fed definitely have an inflation problem. He pointed out it wasn't just energy or tariffs driving it, but a broader issue that fueled worries the Federal Reserve might need to maintain its restrictive monetary policy for longer than anticipated. And across the pond, European markets also faced headwinds with with the Eurostox 600 ending the week down nearly 1%. So geopolitical tensions played a role, of course, mirroring the concerns we see elsewhere.

[A]

And speaking of geopolitics, we have to turn to the situation in the Middle east that's clearly driving the news flow.

[B]

Absolutely. Well, last week's hopes for de escalation proved fleeting. Trump's rhetoric ratcheted up tensions also over the weekend, and the movement of US Naval assets certainly didn't calm nerves. Concerns about potential disruption to oil supplies immediately translated into high prices, exacerbating those existing inflationary pressures. We saw similar reductions in Asia Pacific markets this morning with a bit of a sell off triggered by renewed warnings regarding Iran. Oil prices jumped over 2% and bond yields followed suit this morning reflecting those inflation fears. However, the South Korean Cosby pared its losses and is now up almost 1% as Samsung electronic is rebounding.

[A]

OK, why don't we talk about China? We saw some initial positive momentum linked to the US China summit, but that faded. So what's going on there?

[B]

Initially, there was support from expectations of continued stabilization in US China relations and surprisingly resilient economic data. However, the lack of concrete policy breakthroughs at the summit dampened enthusiasm. Both the CSI 300 and Shanghai Composite indices ended the week lower. Hong Kong equities underperformed, particularly particularly in the Internet and export sensitive sectors. That keeps on being the case this morning. Hong Kong is trading down about 1.5%, underperforming Chinese onshore stocks, which are down about 0.6%.

[A]

Once again, turning to a less conventional story, Venezuela recently announced plans for a massive sovereign debt restructuring. What's the significance of that?

[B]

Well, it's potentially quite significant. We're talking about roughly US$150 billion in outstanding obligations. The authorities are call the debt unsustainable and are aiming to reconnect with international financial institutions after years of isolation. Markets reacted positively with Venezuelan PTVSA bonds rallying sharply. Investors are hoping for eventual normalization and formal negotiations with creditors, aided by improved engagement with the U.S. however, it's going to be a complex process involving litigation, creditor coordination and further US Sanctions relief.

[A]

All right, then. Finally looking ahead to the coming week, Roman, what key events should investors be paying attention to?

[B]

Artificial intelligence and consumer resilience will be front and center. Nvidia reports earnings on Wednesday and that will be heavily scrutinized. Investors want to know if the demand for AI chips remains strong and if Nvidia can maintain its dominance. Alongside that, we'll be watching retail earnings from Walmart, Home Depot and Target very closely. These reports will offer crucial insights into whether US Consumers are starting to pull back spending amidst higher prices. Also, SP's global PMI data for May will be released, providing a broader gauge of economic activity. So it's certainly going to be a very interesting week. For now, US Equity market futures point to a lower open when the markets open in the US this afternoon. That's it from me.

[A]

Thank you very much Roman for bringing us the news highlights today.

[B]

Thank you very much for inviting me. Always a pleasure.

[A]

And now as ever on a Monday, it's time to take a look at the markets from a technical perspective. Good morning to you, Mensor.

[C]

Good morning Bernadette.

[A]

So well, Roman mentioned it. Higher treasury yields. U.S. treasury yields have risen above 4.5%. Will they move to 5%?

[C]

Yes, I think this is the key question for most investors. Most financial or all financial instruments are priced off in one way or the other from the US 10 year treasury yield. When we look at the chart from a technical point of view, basically what we see is that there is massive resistance around 470. So we think there is going to be a consolidation around current levels and we don't expect a swift move back to 5%. So we think we will see a test here and key will be this week how the market reacts to this. 470. In a, in a bullish case of course interest rates would need to drop back below 425 and the rise above 470 would then open the way towards 5% and then maybe as well open the way for global interest rates to rise. So then we would have to conclude that the price action since 2024 was basically a consolidation and higher interest rates are on the horizon everywhere. But it's probably too early for this. So let's wait and see what happens at 470. So we take it one level at a time.

[A]

And it's not just Treasuries. Gold and silver are under pressure too. What are the support levels there?

[C]

Yes, so the price action in gold and silver continues to be mixed. In the short term we still think this is a medium term consultation as medium term momentum is bottoming and prices consolidate and the volatility declines. So for gold we can say that as long as 4300 holds that this is still a consolidation. We expect prices to move higher and the secular uptrend to remain intact. When you look at silver the level is at US$70. So as long as US$70 holds, we think that this is a healthy consolidation and prices can, can attempt to recover later.

[A]

Okay, and finally then Mensour semiconductors, they're the top performing industry at the moment. Is it a bubble?

[C]

Yes. Many investors of course are scared. One reason is that most investors Missed the rally. And if you don't have semiconductors, you underperform badly this year. And it's very interesting that it's semiconductors which are driving global markets everywhere and not only in large caps, but in small caps as well. Yes. What can we add to the discussion or what are the points here? So first of all, when we look at the price action, a 100% increase in a industry is no sign of a bubble. When we look at data since 1950, we see that 12 months later, on average, an industry which more than 100% continues to advance by more than 10% in the next 12 months. So that's not the case. Secondly, when we look at some external indicators, we don't have the feeling that it's a bubble yet. What is important here for semiconductors to avoid becoming a bubble? I think the most important thing is that what sounds now a bit counterintuitive, the sector should have a correction sooner or later. So the worst thing that can happen to the sector and which would dampen the bull market is if prices continue to move higher every day. So like today, you heard it before, equity markets are under pressure in Asia across the board. The only equity market which is rising is South Korea and it's due to two stocks, Samsung Electronics and SK Hynix. So this would be the worst case if those stocks just continue every day to move higher because then of course, it would increase the feeling of investors that nothing can go wrong. And then usually, of course, this is the worst time to be invested. So the conclusion from technical side, it's not a bubble yet. What is needed to extend the bull market is basically a correction in the next few weeks. So the best thing that could happen for the bulls of semiconductors is if the sector corrects by 15 to 20%, then it would for sure extend the bull market. The worst thing that could happen is if over the next six months the index just continues in a straight line higher and moves up, let's say another 40 to 50%, then I think the odds are quite high that the sector moves into a bubble.

[A]

Okay, well, I'll look forward to catching up on that with you at a later date then. Munsell, thank you very much for joining the show today.

[C]

Thank you, Bernadette.

[A]

Well, that brings us to the end of today's show. I hope you enjoyed it. Thanks again to Roman and Mensour. Please do come back and join me again tomorrow when I'll be back with more of our experts to keep you in the loop on what's moving markets. Meanwhile, good luck today and in the week ahead, and goodbye for now.

[D]

The information and opinions expressed in this podcast constitute marketing material and are not the result of independent financial or investment research. Please refer to www.juliusbear.com legal forward/podcasts for further other important legal information.