Why Financial Markets Might Dismiss Positive US Employment Figures During the Iran Conflict

1. Global sovereign bonds sold off in tandem this week, with Japan at the epicenter. On September 2, the 10-year JGB yield reached 3.0175%, breaking above 3% for the first time since 1996. Over the past 12 months, it has risen 133.9 basis points, the largest increase among the six major developed-market maturities tracked. Over the same period, the French 10-year yield rose 79.7 basis points, the U.S. 10-year 74.6 basis points, and the German 10-year 70.8 basis points. The sell-off was driven less by renewed rate-hike expectations than by a repricing of fiscal supply and term premium, compounded by an approximately 10% weekly rise in crude oil, which pushed inflation expectations higher again. 2. The bond sell-off and crypto rally are not contradictory; they reflect the same underlying repricing dynamic. Bitcoin gained 2.50% for the week to $79,804 and 23.95% over the month, while gold rose 10.40% over the month. When markets are more concerned about sovereign solvency and currency purchasing power than the cost of capital, supply-constrained assets can rise alongside bond yields. On September 4, U.S. August nonfarm payrolls increased by 162,000, well above the 53,000 expected, and the implied probability of a September rate hike rose from 49.4% to 58% that day. This repricing dynamic still has further to run. 3. Within crypto, the most active capital is not concentrated in major assets, but in a new blockchain launched only in July. Robinhood Chain's TVL rose 26.2% week over week to $836 million, while seven-day DEX volume reached $11.30 billion, up 105.7% week over week and already above BSC's $8.70 billion and Base's $5.75 billion. ARB gained 50.97% for the week, UNI rose 41.35%, and PONS surged approximately 359%, compared with just 2.50% for Bitcoin over the same period. 4.Assets to watch: BTC, ETH, PONS, ARB, UNI, MARSCOIN, XAUUSD, UKOUSD, ORCL, ADBE.