21/08/2026
After two days of drastic fluctuations, U.S. Treasury bond prices have gradually stabilized. However, investors cast doubts on whether the U.S. efforts to curb long-term borrowing costs through bond buybacks can deliver lasting relief, while the U.S. dollar weakened across the board.
Long-term U.S. Treasury yields experienced notable volatility. The 30-year Treasury yield fell 9 basis points on Wednesday before rebounding 6 basis points on Thursday, settling steadily at 5.25%. Market movements were driven by investor reactions to the U.S. Treasury’s expanded debt buyback plan. Despite U.S. Treasury Secretary Scott Bessent signaling on Thursday a potential expansion of the buyback scale and the launch of supporting fiscal initiatives, long-term Treasury yields continued to climb.
The slump in U.S. bonds triggered spillover effects across global markets, with bonds in Japan, Australia and New Zealand also declining following Thursday’s U.S. market drop. In the foreign exchange market, the U.S. dollar depreciated against all G10 currencies. Investors are awaiting the release of the U.S. Manufacturing Purchasing Managers’ Index (PMI) data, which will offer further insights into the health of the world’s largest economy.
As the bond market calmed down, global stock markets showed divergent performance. The MSCI Asia Pacific Index rose 0.6%, and U.S. stock index futures pointed to a modest higher opening on Wall Street. In contrast, European stocks are set for a weak start after seven consecutive days of declines, marking the longest losing streak since September 2023.
The violent swings in the bond market have heightened uncertainties on Wall Street. A string of policy moves by the U.S. Treasury has underscored market concerns over persistently elevated long-term yields. Sustained high inflation and government spending have kept U.S. government financing costs elevated, which are now spilling over to the broader economy and weighing on equity markets.
Market focus has now shifted to NVIDIA’s earnings release and the upcoming Jackson Hole Economic Symposium, with the two key events set to steer short-term market trends.
Among non-U.S. currencies, the Japanese yen edged higher. Japan’s key price index accelerated for the second consecutive month, fueling expectations that the Bank of Japan will implement another interest rate hike in the near term. The USD/JPY exchange rate stood at around 159.
Commodities traded mixed. Brent crude fell 0.3% to settle at approximately $93.45 per barrel, ending a five-day winning streak. Gold climbed 0.7% to around $4,550 per ounce, on track to post a third consecutive weekly gain.
Cryptocurrencies maintained upward momentum. Bitcoin continued its rally in Asian trading hours on Friday, poised for its best weekly gain in more than two years. The flagship cryptocurrency surged as much as 4.2% to hit $75,740.
Technology stocks gained traction, with Samsung Electronics’ share price jumping 4%. According to people familiar with the matter, Samsung is set to announce a shareholder return program worth up to 110 trillion South Korean won (approximately $80 billion) on Friday, a major boost for its stock performance.
Downplaying Thursday’s market turbulence, Treasury Secretary Bessent remarked that “anything that happens in a 24-hour period is just noise”. He also noted that the expanded bond buyback program is likely to exceed the initial $4 billion scale scheduled to launch next month.
Nevertheless, market participants warned that the U.S. Treasury’s unpredictable debt management strategy may ultimately lead to higher borrowing costs, which could weigh on global asset markets in the long run.
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