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August 21, 2026 - 07:56
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(Bloomberg) — Treasuries stabilized after two days of whipsaw trading as investors questioned whether US efforts to contain long-term borrowing costs through buybacks would offer more than a temporary reprieve. The dollar weakened.Yields on 30-year bonds held at 5.25% after sliding nine basis points on Wednesday, and then jumping six basis points the following day as investors reacted to the Treasury’s plans to boost debt buybacks. Yields rose on Thursday even as Treasury Secretary Scott Bessent flagged scope for larger repurchases and a fiscal plan.Bonds fell in Japan, Australia and New Zealand, following Thursday’s decline in their US peers. The dollar slipped against all its Group-of-10 peers before US manufacturing PMI data that may give investors more insight into the health of the world’s biggest economy.As bonds stabilized, MSCI’s Asia Pacific stocks gauge rose 0.6% and equity-index futures pointed to modest gains on Wall Street. European shares were set for a tepid start after seven days of losses, their longest losing streak since September 2023.The volatile trading in bonds extended a period of uncertainty on Wall Street as a series of Treasury decisions underscored growing concern over elevated long-term yields. Lofty government financing costs are feeding through to the broader economy and weighing on equities, after years of elevated inflation and government spending.“Bessent’s expanded Treasury buyback plan failed to convince investors it can durably contain long-term borrowing costs,” said Fabien Yip, a market analyst at IG International in Sydney. “That sits alongside lingering Middle East tension and thin catalysts in tech.”The market’s focus now shifts to Nvidia Corp.’s earnings and the Jackson Hole symposium next week, she said.Elsewhere, the yen edged up after Japan’s key price gauge accelerated for a second month, keeping the central bank on track for another near-term interest rate hike. The currency traded around 159 per dollar.What Bloomberg Strategists Say…“Long-end yields are shaking off the impact of US Treasury Secretary Bessent’s efforts to contain that part of the Treasuries curve. The robust outlook for economies worldwide backs the case for elevated borrowing costs, and holding down bond yields will remain a tough ask as long as the data pulse stays strong.”Brent crude dropped 0.3% to about $93.45 a barrel, snapping a five-day rally. Gold rose 0.7% to about $4,550 an ounce, on track for a third weekly gain.Bitcoin continued to rally in Asia on Friday, putting it on track for its best weekly gain in more than two years. The original cryptocurrency climbed as much as 4.2% to $75,740.Investors were also focused on technology stocks as Samsung Electronics Co. shares climbed 4%. The company is expected to announce a shareholder return package Friday that may be worth as much as 110 trillion won ($80 billion), according to a person familiar with the matter.Meanwhile, Bessent played down Thursday’s market moves, saying “anything that happens within a 24-hour period is noise.” He also said the expanded buyback operations “could be more than the $4 billion” size planned to start next month.Market participants are warning that a lack of predictability when it comes to the US Treasury’s debt management strategy could ultimately portend higher borrowing costs.Investors and analysts at JPMorgan Chase and Co., Jefferies LLC and PGIM Inc. say that surprises stand to increase term premium, or the extra compensation demanded in the market to offset potential risks, on US government debt.Without any meaningful change to the US fiscal trajectory, given that the US budget is set by Congress and not the Treasury, tweaks around buybacks can only have a small, transient impact on markets, DBS Bank strategists including Samuel Tse wrote.“My view is that the ‘Bessent put’ is still going to fail to keep yields down from multi-decade highs over the longer term,” said Hardika Singh at Fundstrat Global Advisors. “Making yields go down over the longer period will require the painful work of bringing down the debt.”Corporate Highlights:Anthropic PBC expects to match or beat the size of SpaceX’s record-setting initial public offering, according to people familiar with the matter. Banca Monte dei Paschi di Siena SpA is seeking to buy two separate banks for a combined value of €34 billion ($40 billion) as it seeks to prevent being bought by rival Intesa Sanpaolo SpA. Broadcom Inc. is in talks with a group of lenders to raise more than $60 billion in debt for an AI chip financing deal that will benefit Anthropic PBC and other companies, according to people with knowledge of the matter. Some of the main moves in markets:StocksS&P 500 futures were little changed as of 6:54 a.m. London time Nasdaq 100 futures rose 0.2% The MSCI Asia Pacific Index rose 0.7% The MSCI Emerging Markets Index rose 0.9% Japan’s Topix was little changed Australia’s S&P/ASX 200 fell 0.3% Hong Kong’s Hang Seng rose 0.8% The Shanghai Composite fell 0.2% Euro Stoxx 50 futures were little changed CurrenciesThe Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.2% to $1.1697 The Japanese yen rose 0.1% to 158.85 per dollar The offshore yuan was little changed at 6.7214 per dollar The British pound rose 0.1% to $1.3650 CryptocurrenciesBitcoin rose 3.7% to $75,355.92 Ether rose 1.8% to $2,360.22 BondsThe yield on 10-year Treasuries was little changed at 4.70% Japan’s 10-year yield advanced three basis points to 2.875% Australia’s 10-year yield advanced five basis points to 5.06% CommoditiesSpot gold rose 0.7% to $4,547.20 an ounce West Texas Intermediate crude fell 0.6% to $86.34 a barrel This story was produced with the assistance of Bloomberg Automation.–With assistance from Winnie Hsu and Ruth Carson.©2026 Bloomberg L.P.
