US 30-Year Yields Hit 2007 High, Gold Surges as Iran Tensions Flare
22 August 2026 · Evening
The calming effect of Treasury Secretary Bessent's long-term bond buyback announcement quickly evaporated, sending 30-year Treasury yields to their highest since 2007.
This renewed concerns over dollar debasement, boosting gold prices by +1.64% to $4,592 and weakening the dollar index by -0.24%.
Geopolitical tensions also flared as Iran threatened "destructive retaliation" against impending "toughest ever" US sanctions, maintaining WTI crude near a 4-week high despite a slight -0.18% dip.
Meanwhile, China's property sector continued its deleveraging with a 30.8% drop in state land sales, while Japan's core CPI at 1.8% intensified pressure on the BOJ for a September rate hike.
Global markets are navigating a complex landscape, reacting to mixed economic signals and escalating geopolitical tensions.
Only 7 vessels transited the Strait of Hormuz yesterday, a 50% drop from the previous day, excluding large oil and LNG tankers.
The strait typically handles about 20% of global crude oil and LNG imports, raising concerns about supply chain risks.
Uncertainty in US-Iran peace talks is expanding the geopolitical risk premium in energy markets.
Global Stocks Face Worst Weekly Drop Since Mid-JulyWeekly decline
Global equity funds saw $220.1 billion in net inflows last week, a three-week high, before widespread declines this week.
US bond yields resumed their rise since Wednesday, and oil prices remained near a 4-week high, reigniting inflation fears.
Reduced Hormuz Strait traffic is seen as exacerbating inflation concerns and pressuring equity valuations through higher oil prices.
US National Debt Exceeds $40 Trillion>$40T debt
The US national debt has surpassed $40 trillion for the first time, contributing to rising borrowing costs across G7 nations.
G7 government bond yields are nearing 10-year highs, driven by increased fiscal pressures from the Iran conflict, climate change, and defense spending.
Record high temperatures also contribute to rising fiscal burdens.
Australian Dollar Breaks Key Resistance Levels+0.4% AUD/USD
The Australian dollar (AUD/USD) rose +0.4% today, breaking resistance at 0.7130-35 and targeting 0.7200, its highest since May 29.
Australia's August Manufacturing PMI was 52.0 (unchanged), while Services PMI slightly declined to 52.9 from 53.6.
The currency's strength is linked to market doubts about the US Treasury's ability to curb rising bond yields.
New Zealand Dollar Continues Upward TrendResistance broken
The New Zealand dollar (NZD/USD) adjusted -0.3% from yesterday's high of 0.5964 but then broke resistance at 0.5925-30, aiming for 0.5995-0.6095.
New Zealand's July trade deficit worsened to -NZ$1.95 billion monthly and -NZ$5.24 billion year-over-year.
The upward momentum is supported by skepticism about US Treasury's yield control and a +2.0% rise in Brent crude prices.
Brent Crude Oil+6% Weekly
Brent crude oil gained 6% this week, heading towards $94 per barrel.
Persistent supply concerns stemming from the US-Iran standoff continue to drive prices.
United States
Bessent's Bond Buyback Fails to Sustain Yield Relief30Y yield +5.25%
Treasury Secretary Bessent's long-term bond buyback plan, announced Wednesday, saw its calming effect vanish within a day.
The 30-year Treasury yield surged back to 5.25% today, nearly reaching pre-intervention levels, as the US national debt surpassed $40 trillion.
Market participants dismissed Bessent's comments on expanding buybacks as 'political theater,' fueling fears of dollar debasement and driving gold up >3% and Bitcoin up 13%.
Dollar Index Weekly Decline AcceleratesDXY -0.24%
The dollar index's weekly decline accelerated as the Treasury's bond buyback policy was viewed as a temporary fix, weakening dollar-bearish bets.
The Euro (EUR/USD) advanced to $1.1694 for its fourth consecutive weekly gain, while the Korean Won and Indonesian Rupiah hit multi-month highs.
Energy-exporting currencies like the Mexican Peso, Norwegian Krone, and Canadian Dollar are gaining attention due to high oil prices and the Treasury's efforts to curb long-term yields.
Trump Escalates Iran Sanctions ThreatOil 4-week high
President Trump threatened 'economic war' on Iran, with Treasury Secretary Bessent promising 'the toughest sanctions in history' to be detailed Monday.
Iran warned of a 'destructive response,' while China rejected US calls for cooperation, stating sanctions are unhelpful.
Oil prices surged to a 4-week high, contributing to inflationary pressures and bond yield increases, and expanding global risk-off sentiment.
US Consumer Budgets Tighten, Luxury Demand StrongWalmart basket weak
US retail sales declined for the first time in nine months in July, though Home Depot noted robust demand from budget-conscious consumers.
Luxury brands like Ralph Lauren (RL) outperformed, highlighting a widening consumption gap between middle and high-income households.
Fed's September Rate Hike Remains PossibleHawkish FOMC
FOMC minutes revealed three members expressed hawkish views, suggesting a September rate hike remains possible despite moderate inflation and employment data.
New Fed Chair Warsh is expected to provide interest rate guidance at the Jackson Hole Economic Symposium on August 28.
A hawkish signal from Warsh could lead to a dollar rebound, while dovish remarks might cause further weakening.
Asian Equities Face Weekly SlideKOSPI weekly fall
Asian emerging market equities, including Korea's KOSPI and Taiwan's index, are set for weekly declines.
Rising US long-term yields (30-year at 2007 high) and oil prices (4-week high) are increasing risk-off pressure.
Japan's Nikkei 225 also experienced a challenging week amidst these global pressures.
North Korea Lukewarm to Trump's Meeting OfferNK negotiation weak
Trump's proposal for another meeting with Kim Jong Un was met with a lukewarm response from Kim Yo Jong, signaling reduced urgency for negotiations.
North Korea's strengthened ties with China and Russia have lessened its need for US sanctions relief.
A potential meeting opportunity remains around the APEC meeting in Shenzhen later this year.
Europe
Germany Sells 30-Year Bonds at 2011-High Yield3.79% yield
Germany sold 30-year bonds at a 3.79% yield, the highest since 2011, as Eurozone bond supply reaches record levels.
Commerzbank projects Germany's net bond supply to hit a record €40 billion in 2027, with Barclays also forecasting record Eurozone supply next year.
Persistent funding needs from the COVID-19 pandemic to the Iran conflict are intensifying pressure on European bond markets.
Eurozone Business Activity Fastest in 11 MonthsComposite PMI 52.1
Eurozone business activity grew at its fastest pace in 11 months, with the Composite PMI at 52.1, exceeding expectations.
New orders saw their largest increase in approximately 40 months, primarily driven by the manufacturing sector.
Exports expanded for the first time since February 2022, accompanied by signs of easing price pressures.
Mixed Economic Signals Across EuropeUK Services 6-month high
Germany's Composite PMI of 51.0 slightly missed expectations due to weaker services, despite a manufacturing rebound.
France's Services PMI contracted to 48.4, reflecting the impact of a heatwave, while its Manufacturing PMI rose to 51.5.
The UK Services PMI hit a 6-month high of 52.8, and consumer confidence recovered to a 2-year high.
UK Retail Sales Fall in July-0.5% sales
UK retail sales volume fell -0.5% in July, a rebound after strong event-driven demand in June, with annual growth plummeting from 3.8% to 1.6%.
Demand adjusted following World Cup-related purchases of air conditioners and fans, and supermarket promotions.
Clothing sales recorded their largest drop since May, as retailers launched summer sales earlier than usual.
Eurozone negotiated wage growth slowed to 2.44% in Q2 from 2.56% in Q1, signaling more flexibility for monetary policy.
Consumer 12-month inflation expectations improved to 2.9% in July, marking the third consecutive monthly decline.
Belgium's August consumer confidence index worsened to -7, and the unemployment outlook rose to 14% for the third month.
Eurozone Bond Yields Adjust, EUR/USD Outlook BoostedEUR/USD +0.26%
Eurozone government bond yields saw slight adjustments after a week of global bond market stress, with strong economic signals boosting EUR/USD expectations.
The US Treasury Secretary's intervention provided only a day of relief, with yields quickly resuming their upward trend.
If EUR/USD surpasses 1.1696, it targets a return to the May 6 high of 1.1797, supported by strong PMI improvements.
German Machinery Exports Decline, Gas Storage at RiskH1 exports -0.8%
German machinery exports declined -0.8% in the first half of the year, as a 57.8% surge in Middle East exports could not offset weakness elsewhere.
Gas storage levels are at 50%, risking the November 1 target of 70%, with the BDEW warning of increasing tension.
Rising gas prices due to the Iran conflict are delaying corporate purchases, complicating storage efforts.
Eurozone Wage Growth SlowsQ2 Wage Growth
Wage growth in the Eurozone decelerated during the second quarter, according to ECB data.
This slowdown could influence future monetary policy considerations by the European Central Bank.
Eurozone consumers further reduced their inflation expectations, as shown by an ECB poll.
This trend might alleviate some of the inflationary pressures on the European Central Bank.
Eurozone Business Activity RisesBusiness Activity Up
Eurozone business activity growth reached its highest level since November.
This positive trend was indicated by the latest PMI data, suggesting economic momentum.
China
Government Land Sales Revenue DropsLand Sales -30.8%
China's government land sales revenue plummeted 30.8% year-on-year from January to July.
Total revenue was 1.1731 trillion yuan, reflecting weakness in the real estate sector and impacting local finances.
Evergrande Unit Bankruptcy AcceptedEvergrande Bankruptcy
A Guangzhou court accepted the bankruptcy and liquidation case for an Evergrande (3333.HK) real estate unit.
This marks a significant step in the restructuring of the world's most indebted property developer, deepening market concerns.
Fiscal Support PledgedFiscal Support
China's finance authorities pledged timely additional fiscal policies to counter the economic slowdown.
Measures include reallocating local government spending to households and raising interest subsidy caps for small businesses from 3,000 to 5,000 yuan.
Foreign Direct Investment DeclinesFDI -6.2%
Foreign direct investment into China fell 6.2% year-on-year from January to July.
The total investment amounted to 43.83 billion yuan, indicating weakening global investor preference amid uncertainties.
Tax Crackdown on WealthyTrust Tax Hike
China is tightening capital controls on the wealthy by increasing taxation on trust assets.
New regulations impose a 20% tax rate on trust asset transfers and annual income, prompting reevaluation by high-net-worth individuals.
Yuan StrengthensYuan Strong
The Chinese Yuan continued to strengthen, nearing a 3.5-year high against the dollar.
This appreciation is driven by a weaker US dollar and expectations surrounding the Federal Reserve's policy ahead of the Jackson Hole Symposium.
Japan
JGB Yields Nearing 3%JGB Yields
Japan's 10-year government bond yield is approaching 3%, adjusting to 2.875% today after hitting a 30-year high of 2.945%.
Analysts believe a break above 3% is only delayed, despite some easing from US Treasury intervention.
Inflation and PMI Support BOJ HikeJuly CPI 1.8%
Japan's July core CPI accelerated to 1.8%, nearing the BOJ's 2% target, with overall inflation at 1.9%.
Strong August PMI data (Manufacturing 55.1, Services 52.3) further supports a potential BOJ rate hike at its September meeting.
Government Prepares for Rate NormalizationPolicy Shift
The government views rising interest rates as a sign of economic growth, preparing for policy normalization.
The Finance Ministry is considering a 3.8% assumed rate for the FY2027/28 budget, up from 3.0%.
Nikkei Weekly DeclineNikkei -4% Weekly
The Nikkei 225 index recorded a 4% weekly decline, its worst since mid-July, closing today at -0.3%.
Middle East tensions and rising oil prices, following US sanctions on Iran, accelerated the unwinding of the yen carry trade.
Emerging Markets
Iran Responds to US SanctionsIran Sanctions
Iran's leadership emphasized overcoming 'unjust sanctions' after the US announced its 'toughest-ever' measures.
US Treasury Secretary Bessent is set to release details of the new sanctions on August 25, potentially reducing the need for further military action.
Indonesia Current Account Deficit WidensCAD -3.3% GDP
Indonesia's current account deficit surged to 3.3% of GDP in Q2, the widest since 2018.
This deterioration from Q1's -1.0% GDP highlights the country's reliance on portfolio capital inflows, creating exchange rate volatility.
Bank of Thailand Holds RatesBoT Rate 1.00%
The Bank of Thailand is expected to maintain its policy rate at 1.00%, likely through 2027, according to a Reuters poll.
This decision is supported by weak domestic economic growth and contained consumer price inflation, which was 1.95% in July.
Turkey Expected to Cut RatesTurkey Rate Cuts
Turkey is anticipated to begin cutting its benchmark interest rate in September, following a lower-than-expected July inflation print.
JPMorgan suggests disinflation momentum and an improving current account provide grounds for monetary easing, maintaining a long position on the Turkish Lira.
South African Rand StrengthensZAR +0.4%
The South African Rand gained 0.4% against the dollar, trading at 16.055 ZAR/USD, marking its third consecutive weekly rise.
This strength is attributed to rising gold prices, a weaker dollar, and US Treasury signals for expanded long-term bond purchases, boosting demand for risk assets.
Russia Open to Ukraine Peace TalksUkraine Peace Talks
Russia's Deputy Foreign Minister Ryabkov indicated conditional openness to new proposals for resolving the Ukraine conflict.
He noted that the US has shown a 'constructive dialogue' and understanding of Russia's position, provided proposals reflect 'realities on the ground'.
Indonesia-China CooperationTrade Revitalized
Indonesia and China agreed to reactivate their trade mechanisms and energy and mineral partnerships.
The agreement followed a meeting between the foreign ministers of both nations, aiming to strengthen economic ties.
Korea
Exports Surge, Trade SurplusExports +56%
South Korea's exports surged 56.0% from August 1-20, leading to a trade surplus of approximately $14 billion.
This robust growth was primarily driven by a boom in semiconductor and AI chip demand, with imports rising 19.0%.
BOK Deputy Governor on PolicyCautious Policy
The new Bank of Korea Deputy Governor, Kwon Minsu, emphasized a cautious and flexible interest rate policy.
This stance comes ahead of the August 28 rate decision, balancing robust growth with persistent inflation and financial stability risks.
Won Exchange Rate OutlookWon Weakening
The Bank of Korea Deputy Governor stated that the dollar-won exchange rate is fundamentally expected to weaken.
The government reaffirmed its commitment to proactively manage foreign exchange market volatility and financial risks.
KOSPI Decline, Retail LossesKOSPI -30%
The KOSPI index has plummeted 30% from its June 19 peak, leading to significant losses for retail investors.
This unprecedented volatility, exacerbated by increased margin borrowing, threatens South Korea's MSCI index inclusion goals and government credibility.
Samsung (005930.KS) Shareholder Return Plan$70B Return Plan
Samsung (005930.KS) is set to review a $70 billion shareholder return plan at its board meeting on Friday.
The plan, including special dividends and share buybacks, follows a surge in earnings from the AI-driven semiconductor boom.
Hyundai Motor (005380.KS) StrikeHyundai Strike
Hyundai Motor (005380.KS) workers launched their first full strike in a decade over stalled wage negotiations.
Workers are demanding an 800% bonus and job protection against AI and automation, following a partial strike that caused 2.3 trillion won in losses.
Future Response FundFuture Fund
The South Korean government plans to establish a 'Future Response Fund' using tax surpluses from the semiconductor boom.
The fund will support youth job creation, housing, marriage, childbirth programs, and investment in AI and regional development.
India
Trade Deficit WidensTrade Deficit $31.98B
India's trade deficit widened to $31.98 billion in July, a six-month high.
This expansion was influenced by the Middle East conflict and a sharp rise in international shipping costs, squeezing importer margins.
Rupee WeakensRupee -6.5% YTD
The Indian Rupee continued to weaken, down 6.5% year-to-date, making it Asia's worst-performing currency.
This depreciation persists despite interventions by the Reserve Bank of India, with the Rupee trading at 95.70/dollar on Friday.
Asia
Indian Rupee Futures Open Interest+700M
Indian rupee futures open interest surged by 700 million, reaching a one-year high.
This increase is attributed to arbitrage trades and suspected central bank intervention.
RBI Monetary Policy StanceEasing End
The Reserve Bank of India signaled an end to its easing cycle.
The interest rate swap market is already pricing in a 75 basis point hike over the next year.
Overnight Index Swaps (OIS)1Y OIS 5.93%
The 1-year Overnight Index Swap (OIS) rate reached 5.93%.
This implies three 25 basis point rate hikes, expected in December and February.
MPC Meeting MinutesHawkish
Minutes from the August Monetary Policy Committee meeting revealed a more hawkish stance than anticipated.
This clearly signals upcoming rate increases.
Government Bond YieldsYield Pressure
Government bond yields are under upward pressure, with concerns that the benchmark 10-year yield could test 6.90%.
Specific Bond Performance2036 Bond 6.87%
The yield on the 6.94% 2036 bond rose to 6.8723%.
This marks its worst performance since early April this week.
Bond Issuance DemandDemand Poor
Poor demand was observed for a 280 billion rupee (approximately $2.93 billion) bond issuance.
Market participants worry yields might not hold current levels.
Banking LiquidityLiquidity Tight
Banks are increasing overseas borrowings amid tight liquidity conditions.
The call money rate is now near the policy rate.
FCNR(B) Swap ClosureDeadline Aug 31
The deadline for including foreign currency non-resident (bank) swaps was advanced to August 31.
It was originally scheduled for late September.
Call Money Rate & Tax OutflowsCall Rate 5.23%
The weighted average call money rate reached 5.23%, close to the RBI's repo rate of 5.25%.
This was influenced by 2 trillion rupees (approximately $2.1 billion) in goods and services tax outflows.
Manufacturing & Services PMIServices Rebound
Manufacturing weakness persisted, but August economic indicators showed a slight recovery driven by a rebound in services.
PMI DetailsMfg PMI 52.9
The Manufacturing PMI registered 52.9, its weakest expansion rate in five years.
The Composite PMI slightly improved to 54.6 from 54.3 in July.
PMI vs. ForecastsBelow Avg
While exceeding the Reuters poll median of 54.3, the PMI significantly underperformed the recent average of 60.
Weak new orders were offset by the services sector.
Construction Equipment Incentives$1.2B Incentives
The government plans to approve a $1.2 billion incentive package to localize construction equipment manufacturing.
This aims to attract $1.8 billion in new investment over seven years.
Import Substitution GoalLocal Value Add
The goal is to achieve local value addition for machinery currently fully imported.
This initiative follows a sharp decline in tunneling machine imports since border tensions with China.
Companies
ICICI Bank$5B Limit
ICICI Bank doubled its overseas borrowing limit to $5 billion.
This will accelerate its fundraising through dollar bonds and loans.
Broadcom (AVGO)+0.43%
The company is reportedly planning over $60 billion in corporate bond issuance to fund AI data center investments.
BMO Capital Markets initiated coverage with an Outperform rating.
Marvell Technology (MRVL)+5.79%
Reportedly secured a $12 billion AI chip supply contract with Google.
Multiple firms, including Citi and Oppenheimer, raised price targets or initiated coverage with positive ratings.
Micron Technology (MU)+3.97%
Announced plans for a new $10 billion AI memory research lab over the next decade.
The company also detailed a $250 billion US investment plan expected to create over 90,000 jobs.
BMO initiated coverage with an Outperform rating.
Nvidia (NVDA)-0.33%
Plans to ship small quantities of custom AI chips for Chinese customers by year-end.
Reportedly discussing investing in AI data provider Merco (valued at $20 billion) and acquiring chip startup Rebellions.
HSBC raised its price target, and BMO initiated coverage with an Outperform rating.
Walmart (WMT)-9.15%
Q2 adjusted EPS of $0.81 beat consensus ($0.74), and revenue of $187.9 billion exceeded estimates ($186.8 billion).
However, US comparable store sales (excluding fuel) grew +2.6%, significantly below the +3.8% consensus, causing the stock to drop.
Annual revenue growth guidance (4-5%) and adjusted EPS guidance ($2.80-$2.87) were both below consensus.
Fifteen investment banks collectively cut price targets, with an average reduction of approximately $14.
Tesla (TSLA)-1.71%
China's regulator announced a recall for 2.98 million Model 3, Y, S, and X vehicles due to issues with emergency door release handles.
The recall, to be addressed via warning labels and OTA updates from September 25, is China's largest for Tesla.
The company also discontinued its solar roof tile business, citing economic viability concerns.
Amazon (AMZN)
Prime Video plans to invest $2 billion in Latin America from 2027-2030 to more than double local original content.
Drone delivery service is set to expand from 11 areas to approximately 500 US locations by year-end.
Boeing (BA)
The US State Department approved a $4.5 billion sale of KC-46A aerial refueling tankers to Qatar.
RTX (RTX)-3.66%
The EU closed its antitrust investigation into Pratt & Whitney (an RTX subsidiary) after the company voluntarily modified contract terms.
Alphabet (GOOGL)-1.17%
Financial Times reported a $12 billion AI chip supply contract with Marvell.
The Indian government requested the deletion of hundreds of accounts and issued notices regarding the misuse of its Firebase platform for phishing.
SpaceX (SPCX)-4.05%
Elon Musk denied reports that SpaceX was seeking to acquire $6 billion worth of wireless spectrum.
Earlier reports also suggested an attempt to acquire AI coding startup Cognition.
AbbVie (ABT)-0.25%
Settled the Gill case and necrotizing enterocolitis (NEC) claims related to specialized infant formula for $670 million.
However, 1,700 lawsuits related to the issue remain pending.
TD Cowen raised its price target.
Merck (MRK)
Shares rose after its personalized mRNA cancer vaccine, co-developed with Moderna, showed significant efficacy in late-stage melanoma trials.
Morgan Stanley upgraded its rating to Overweight.
GE Vernova (GEV)-2.17%
Quinbrook selected GE Vernova as the power conversion and grid stabilization technology supplier for Phase 3 of the Supernode Battery Energy Storage System project in Queensland, Australia.
AMD (AMD)+0.65%
BMO initiated new analyst coverage with an Outperform rating.
Top Gainers
Detail
Nordson (NDSN)
The industrial company saw an additional +1.08% gain in after-hours trading.
+8.00%
Coinbase Global (COIN)
The cryptocurrency exchange also rose +5.34% in after-hours trading.
+7.58%
Deere (DE)
The agricultural machinery manufacturer maintained its price in after-hours trading.
+6.94%
Lumentum Holdings (LITE)
The optical and photonic products company gained an additional +1.96% after hours.
+6.24%
Qorvo Electronics (Q)
The information technology firm's stock remained unchanged in after-hours trading.
+5.93%
Marvell Technology (MRVL)
The semiconductor company extended its gains with a +1.26% rise after hours.
+5.79%
CF Industries (CF)
The fertilizer and agricultural chemicals producer saw no change in after-hours trading.
+5.61%
Mosaic (MOS)
The leading producer of potash and phosphate crop nutrients held steady after hours.
+5.04%
Cboe Global Markets (CBOE)
The global market operator's stock price was unchanged in after-hours trading.
+4.76%
Alexandria Real Estate Equities (ARE)
The urban office REIT focused on life science and technology campuses saw no after-hours movement.