Market Summary
US Treasury Buybacks Trigger Gold and Bond Rally: The US Treasury announced a significant increase in the size of its liquidity-support buyback operations for longer-dated nominal coupon securities, at least doubling the scale of its bond buybacks. The announcement, viewed by markets as a form of quantitative easing, pushed the dollar lower and triggered a sharp rally across bonds and gold. XAUUSD jumped 3.64% on the announcement to close yesterday at $4,521, its highest level since early June, while USDJPY fell toward the 158 level. This morning, however, gold has retraced 0.47% to $4,497, while USDJPY has recovered to around 158.60 as some of yesterday's moves unwind.
Asian Equities Rally as Bond Yields Fall: Asian equities advanced strongly overnight, led by a 5.5% gain in South Korea's KOSPI. SK Hynix surged 12% following the announcement of a share buyback plan, while Samsung Electronics gained 8.5%. Japanese, Australian and New Zealand bonds also rallied after the US Treasury announcement, as investors anticipated reduced upward pressure on long-term yields following the sharp rise in global bond yields. The decline in US Treasury yields has also supported risk sentiment, with Nasdaq 100 futures up 0.45% and S&P 500 futures up 0.15% this morning.
Bitcoin Rises Above $69,000 as Trump Pushes Crypto Bill: Bitcoin climbed above $69,300 after President Donald Trump urged Congress to pass a key cryptocurrency bill as the White House hosted industry executives. The move has provided renewed support to the broader crypto market, with Bitcoin currently trading around $69,311, up 0.39% this morning.
Oil Extends Rally as US-Iran Tensions Escalate: Brent crude advanced 0.22% this morning to $91.80 a barrel after President Trump said there would be an "unprecedented" economic warfare operation against Iran, after criticizing Tehran for failing to take an opportunity to reach a deal. Persistent geopolitical tensions and uncertainty surrounding the Strait of Hormuz continue to support oil prices and raise concerns over renewed inflationary pressures.
Economic Calendar
- US Initial Jobless Claims
- Canada Industrial Product Price Index
Key Market Moves Today
- S&P 500 Futures: +0.15% (7,740.0)
- US 10-Year Yield: -1.18 bps (4.63%)
- Brent Crude: +0.22% ($91.80)
- Bitcoin: +0.39% ($69,311)
- Spot Gold: -0.47% ($4,497)
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