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Global bonds rise on signs of support in US Treasury market
The global bond yields fell from multi-decade-highs on Wednesday, after the U.S. Treasury Department announced it would increase liquidity support for securities with longer maturities. This followed a 'widespread sell-off' sparked by fears about soaring sovereign debt. The U.S. Treasury Department announced that it will double the size of its 'liquidity support buyback operation for longer-dated nominal coupons securities from $2 billion to at least $4 Billion per operation. The yields on long-dated U.S. government bonds fell as much as 10 basis point, which also impacted the yields of European government bonds. U.S. Long Bonds hit their highest level in almost 20 years, Tuesday, with a rate of 5.34%. This reflects growing concerns over inflation and debt. When bond prices fall, yields rise, and this is important because the long-end sovereign rates act as a anchor for nearly all other financial assets, including mortgage interest rates. Hopes for peace in Iran are fading. Oil futures rose around 0.2%, as prospects of an agreement to end the conflict?in the Middle East' declined. S&P 500 and Nasdaq both rose 0.4% early in the day, while European shares were largely flat. Stocks in Asia had fallen earlier on worries about the future of semiconductor companies. South Korean shares ended the day nearly 6% down, their largest one-day decline in three weeks. Investors are worried about the ballooning government debt and high inflation. This is partly due to the Iran War pushing up oil prices. German and French bond yields that had previously risen to their highest levels in 15 and 18 year respectively, have traded lower today. Jeremy Stretch said that the G10 FX Strategy head at CIBC was concerned about the impact of the recent bond market sell-off on other asset classes. The Treasury Secretary must have been aware of these risks, and has taken steps to mitigate them. The dollar is cheapening and we're seeing the yields on US 30-year Treasury bills fall sharply. The rise of Japan's 10-year benchmark bond yield to 3% is a warning for global debt markets, which have relied for years on low Japanese interest rates to drive a constant flow Japanese investment overseas. "There's a narrative about whether we will have higher inflation for longer and what that means for interest rates on the long-term." said Neil Fisher, investment specialist at St James's Place. "Then, you have a narrative about how sustainable some of this long-term government debt is in the UK and Europe as well as the U.S." The minutes of the July meeting will be released by the U.S. Federal Reserve on Wednesday. The Fed held rates, but Chairman Kevin Warsh scared the markets with his lack of information about how it might react to persistent inflation. UNITREE SOARS IN DEBUT In China shares of the world's?"biggest" humanoid robot maker, Unitree soared 460% in its debut. The listing was oversubscribed more than 8,000-fold by retail investors. Anthropic reported that its annual revenue run rate topped $65 billion by the end of July. This was what triggered some market expectations. The U.S. Dollar index fell 0.6% to 99.018. The dollar traded at 158.34 yen and the euro rose 0.6%. The Canadian dollar increased slightly after U.S. president Donald Trump said that the two countries had reached an agreement and paused the imposition of a 50% tariff for three days. (Reporting and editing by Shri Navaratnam and Sam Holmes; Additional reporting and editing by Elaine Hardcastle, Barbara Lewis, and Sam Holmes)
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European corporate outlook improves as recovery extends beyond energy profits
Europe's blue chip earnings forecasts rose for the ninth consecutive week as a broadening recovery, beyond the surge in energy profits, pushed them higher. Most reporting companies exceeded analyst expectations during a historically strong season. LSEG data on Wednesday showed that companies?in STOXX 600 are expected to report an aggregate earnings increase of 24.1%. This is up from the 23.4% estimate last week. 59.9% out of 282?firms have already exceeded the estimates. Energy companies are still expected to lead the index, with a profit increase of 138.6%, but as the Iran War continues to disrupt international crude markets, the corporate recovery has expanded into cyclical industries like basic materials and industrials. These two segments are now the secondary growth engines of the market, with industrial earnings rising 18.1% after manufacturers like FLSmidth or Geberit beat forecasts. STOXX profits, excluding energy, are expected to increase 13.1%. Sales are expected to rise 11.2% on an annual basis, down from the 11.4% forecast last week. Geopolitical uncertainties continue to weigh down the 'STOXX600' index, despite the 'earnings recoveries. Gordon Kerr, macro strategist at KBRA, said that markets are focusing on whether Europe can replenish its gas supply ahead of winter. Current inventory levels and costs remain a source of uncertainty. Reporting by Rafal nowak in Gdansk. Additional reporting by Tharuniyaa lakshmi in Bengaluru and Utkarsh hathi in Bengaluru. Editing by Milla Nissi-Prussak.
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Oil prices continue to rise despite the bond sell-off in Europe
European government bond rates rose to multi-year highs as the global selloff intensified on Wednesday amid fears about the swelling of sovereign debt. Oil futures also gained for the fourth consecutive day, despite the fading prospects of an agreement to end the Middle East conflict. European stocks dipped, and Wall Street futures indicated modest declines, after Asian shares fell due to concerns over the outlook of semiconductor companies. South Korean shares ended the day nearly 6% down, their largest one-day decline in three weeks. Investors are worried about the high inflation and ballooning debt of the U.S. government, which is partly due to the Iran War pushing up oil costs. German Bund yields have reached new 15-year records, and 10-year borrowing costs are currently just over 3%. French 10-year yields are at their highest level in 18 years, a sign that investors' concerns about inflation, government debt, and the Iran war, which has pushed up oil prices, is causing concern. . The yield of the U.S. Long Bond was around 5.28% Wednesday, after reaching its highest level in almost 20 years Tuesday. When bond prices fall, yields rise, and this is important because the long-end sovereign rates act as a price anchor for nearly all other assets in the financial markets, such as mortgage rates. Jason Da Silva is the director of global investments strategy at Arbuthnot Latham. He said that bond yields would naturally rise if you combined a sticky inflation and excessive government spending. "I believe this will be the norm in the future." No Western government has taken aggressive measures to reduce spending. The rise of Japan's 10-year benchmark bond yield to 3% is a warning for global debt markets that have relied for years on low Japanese rates driving an ongoing flow of Japanese investments abroad. "There's a narrative about whether we will have higher inflation for a longer period of time and what that means for interest rates on longer terms." said Neil Fisher, investment specialist at St James's Place. Then, you need to have a narrative about how long-term the government debt is in the UK, Europe and the U.S. Inflation remains a concern, and there are few signs of progress in a deal for the opening of the Strait of Hormuz. The last oil futures rose around 1% for the day. The U.S. Federal Reserve will release minutes of its July meeting on Wednesday. Although the Fed held rates at the same level, Chair Kevin Warsh scared the markets by giving few clues as to how it might react to persistent inflation. The U.S. will also sell $16 billion of 20-year bonds. Nigel Green is the CEO of deVere Group, a financial advisory firm. He said that governments face a choice between spending discipline or materially higher borrowing costs. Markets will continue to test which option they choose. STOCKS WOBBLE; DOLLAR STEADIES IN CHINA,?shares of the world's largest humanoid robot?maker Unitree, soared by 460% at its debut. The listing was oversubscribed more than 8,000-fold by retail investors. Anthropic reported that its annual revenue rate topped $65 Billion at the end July. This was what fueled some market expectations. Risk-averse sentiment has helped to support a softening dollar on currency markets. However, the movements were small. The U.S. Dollar Index was down last by 0.3% to 99.382. The Canadian dollar increased a little after U.S. president Donald Trump said that he would halt imposing a tariff of 50% on Canadian goods for a period of three days because the two countries had come to an agreement. The?euro rose 0.25% to $1.16, and the yen traded at 159.15 per dollars -- just below 160. Investors believe this level could trigger another round of intervention. Lowe's Target and TJX will report their earnings later on Wednesday. These results will be closely monitored after the U.S. Retail Sales data last week were less than expected. Data showed that British inflation increased by 2.9% in July, which was in line with forecasts. The increase was driven by higher household energy bills. (Reporting and editing by Shri Navaratnam; Sam Holmes, Elaine Hardcastle, Dhara Ranasinghe. Additional reporting by Tom Westbrook.
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Abakkus Investment: Global shocks and IPO wave may temper India's earnings driven market revival
Abakkus Investment Managers says that India's Nifty50 companies have shown a robust profit growth, which has improved the outlook for domestic markets. However, global risk aversion, and a healthy IPO pipeline, could dampen a broader rally in the short term. The 'benchmark Nifty 50' and Sensex have fallen 7.9% and 9.8% respectively year-to date amid inflation driven by crude and a record of $25 billion in outflows from abroad. Comparatively, peers in the region, like South Korea and Taiwan have each gained about 50%. Abakkus manages assets totaling $5.2 billion and sees rising crude prices, global yields, and volatility in the AI market as external risks for Indian equities. Aman Chowhan told?Wednesday that "domestically, the consumer demand and corporate profits are strong, as shown in the better than expected?Q1 results. But globally, they're not", Aman Chowhan said. Chowhan stated that India would outperform EM and Asian peers'relatively' after a weaker first half. However, the direction of the market will be determined by the global risk sentiment. The AI trade and crude oil prices are likely to set the pace. Chowhan stated that another obstacle is the expansion of equity supply. IPOs and qualified institutional placements are competing for capital. Block deals also compete with IPOs. Chowhan added that "fresh issues and institution placements are sucking liquidity out of secondary markets, as investors chase listing profits and 'growth stories. A packed August pipeline indicates sustained primary market supply near-term. After 27 mainboard IPOs, which raised 225.72 bn rupees (2.36 bn dollars) in 'the first half 'of 2026. Chowhan estimates 40-50% of capital could be consumed by these offerings, limiting a wider market rally. Abakkus, in this context, favors niche NBFCs, as well as mid-sized banks, citing a stronger credit growth. Foreign investors are also expected to increase their exposure to equity markets only gradually, as they have been cautious about increasing it after years of poor returns in certain sectors such as IT and financials.
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German Finance Ministry links high borrowing costs with security upgrade
According to the Finance Ministry, Wednesday's rise in Germany's debt costs to a 15-year high is a reflection of the increased security threats facing the country following Russia's invasion into Ukraine and the necessity to spend a lot more on defence. In Wednesday's session, German borrowing costs for 10- and 30-year maturities reached a new 15-year peak. The bond yields for other major Western economies, including the U.S.A. and Japan, have also reached multi-decade heights this week. This is due to the ballooning government debt as well as geopolitics. The security situation in Germany changed dramatically due to the aggression of Russia. A spokesperson for the Ministry said that massive investment is needed in security and defence. Germany will borrow EUR838.2bn between 2027 and 2030, thanks to an infrastructure fund approved last year as well as a relaxation of borrowing rules that allows for greater defense spending. Berlin has increased its?spending for defence and security, as authorities warn about the growing hybrid and cyber threats coming from countries such as Russia and Iran. A suspected attack was averted earlier this month when an explosives-laden, drone was found at the Leipzig/Halle Airport in eastern Germany. Unidentified surveillance drones are also regularly spotted over military bases and other sites. The spokesperson stated that it was more costly to not invest now than to wait. Analysts predict that the increased defense spending will continue to put upward pressure on borrowing costs in Germany and Europe. Germany's interest payment is expected to double from EUR41.9bn in 2027 to EUR80.7bn by 2030 as a result of?higher levels of debt. Government bond market movements have a ripple effect across all economies, as sovereign debt is used as a benchmark to measure corporate borrowings and mortgages. High borrowing costs can also tighten financial terms, which could slow down economic growth that helped push?stocks markets to record levels. Investors have a particular focus on the U.S.-Iran conflict, which is driving up energy prices and threatening to increase inflationary pressures.
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Study shows that HEALTHROUNDS-Platelets are best stored chilled for several weeks and not just a few days.
We also share data that confirms the high cancer risk for U.S. airline crews from cosmic radiation. AVAILABILITY OF CHILLING PLATELETS MAY BE EXPANDED SAFELY Researchers who have tested the use of refrigerated plates say that their results could help more than triple the?supply? available to save bleeding patients. Platelets are an important blood component for clotting. They also help to stop blood loss. Platelets donated are stored at room temperatures with a shelf life of five to seven days. In 27 hospitals across the U.S., Australia and Canada, 1,000 children and adults who underwent cardiac surgery were given either chilled platelets or room-temperature plates that had been stored for no more than seven days. Researchers reported in JAMA that platelets stored at room temperature for three weeks or longer were equally effective as those kept refrigerated. Researchers noted that a significant portion of the 2.5 millions room temperature platelet units collected in the U.S. each year are wasted because they have a short shelf-life. In a press release, Dr. Philip Spinella of University of Pittsburgh stated that the new findings would "dramatically improve the availability of blood platelets and reduce waste." This will allow hospitals outside of major cities to be able to afford this life-saving product for bleeding patients. His team pointed out that rural and community hospitals cannot currently justify stocking room temperature platelets because they do not often treat patients with severe bleeding. Researchers said that their results were already being reviewed by the U.S. FDA and regulators from other countries. OCCUPATIONAL Radiation HITS U.S. Airline crews are the hardest hit Researchers say that in a large survey of U.S. workers flight attendants, pilots, and other aviation professionals had the highest percentage of cancer-related deaths due to occupational radiation. Researchers reported in JAMA Internal Medicine that even nuclear medicine technologists who are regularly exposed to radiation had lower mortality rates for these cancers than flight crews and cabin crews. The National Vital Statistics System was used to analyze death certificates from more than 13 million people across 503 professions between 2020 and 2024, including 14,000 pilots and approximately 7,000 flight attendants. The researchers looked for deaths caused by radiation-related cancers in the breast, blood, thyroid gland, skin, and central nervous system. Researchers found that after accounting for individual factors, pilots and flight attendants have statistically higher rates of dying from cancers such as breast, prostate, central nervous system, and melanoma. Leukemia death rates were also higher among pilots. Radiation-related cancers caused 6.9% of all deaths in flight attendants, and 6.7% among pilots. Flight crew members were not at higher risk for non-radiation-related cancer deaths. According to a report, pilots and flight attendants accumulate 3 to 6 millisieverts of cosmic radiation per year, which is much higher than the 0.4 millisieverts that an air traveler who takes 10 round-trips across the country per year would receive. Unlike other?U.S. workers, these workers are not subjected to federal dose limits or monitor requirements despite the fact that they are recognized by the U.S. Federal Aviation Administration as being occupationally exposed. Researchers noted that radiation-exposed aircrew or workers in other countries. Researchers who were not involved with the study wrote an editorial that the findings "...should be of interest to policymakers, airline regulators, and 'clinicians caring for those who work at high altitudes. The editorial suggests that doctors have a "heightened index of suspicion" in evaluating any aircrew who may be suffering from cancer. Sign up for the newsletter to receive it in your mailbox. (Reporting and editing by Aurora Ellis; Reporting by Nancy Lapid)
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UAE's embargo against Iran following missile threat brings rivalry to the forefront
The UAE has suspended all financial relations with Iran Iran blamed for missile threat by major Gulf oil producers * Missile Launch?comes in the midst of standoff over deal ending U.S.-Iran Conflict DUBAI, August 19 - The decision by the United 'Arab Emirates to suspend all economic and financial transactions with Iran, citing a military escalation in Tehran, with a threat of missiles, has refocused attention on the fraught ties that exist between the'major gulf arab oil producer, Iran and the'major gulf Arab oil producers. The UAE was the Gulf State most severely hit by Iran during the early stages in the Middle East War. The last reported attack in the UAE was on the port of Fujairah, which is a major oil export hub, on May 4. UAE cut off commercial ties after defence ministry reported that they had detected two ballistic missiles fired from Iran. This was the first time residents in the UAE received phone alerts about possible threats for months. According to a statement released by the ministry, the missiles were aimed at "maritime traffic". It said that both missiles were lost in the sea. On Tuesday, the UAE sent residents a phone alert stating that it was safe to resume normal activities following the previous warning. The UAE's statement that its missiles target maritime traffic was rejected by Iran's Foreign Ministry as "baseless." UAE SAYS THAT IT IS COMMITTED to dialogue. Dubai, the UAE’s main commercial hub is one of Tehran’s most important economic lifelines. Afra Al Hameli is the Director of Strategic Communications at the Ministry of Foreign Affairs. She said that the UAE was committed dialogue and cooperation in order to promote peace, stability and prosperity throughout the region. Al Hameli stated that due to regional tensions that threaten regional and international security and peace, all financial, commercial, and trade transactions with Iran were halted. Anwar Gargash said on X in a posting that rumours of the "provision of 'financial facilitations to Iran'" were "false, and part of desperate campaigns in the media". The UAE became involved in the regional war that began in February when U.S. and Israeli strikes were launched against Iran. The attacks by Iran on UAE soil ceased in May, but continued in Kuwait and Bahrain. The attacks on UAE vessels at sea did not cease. ADNOC, one of the largest energy companies in the world, announced that it was significantly affected by unprovoked attacks against its employees and assets. The company said this as it tried to continue meeting customer demands despite an "exceptionally difficult environment." ADNOC stated in a press release that some of its vessels have been attacked by drones and missiles as they transit the Strait of Hormuz. The UAE's missile launch, which it blamed on Iran, came after a 60-day window for U.S. and Iranian peace talks ended without a breakthrough. This raised fears of an escalation of the?conflict. It has been disrupting shipping through the Strait of Hormuz in February. Iran has not claimed responsibility. Iran's Revolutionary Guards had previously threatened to take action against vessels that transited the strait, if they were linked to Tehran’s enemies or did not comply with Iranian instructions. (Writing and editing by Toby Chopra; Michael Georgy)
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MORNING BID AMERICA-Bonds Out, Robots In
What's important in U.S. and Global Markets Today By Mike Dolan, Editor at Large, Finance and Markets Bond storm calmed down overnight, but equity markets were still bruised. A tense calm is hanging over the markets as U.S. Treasury prepares for a sale of 20-year bonds later on Wednesday. The minutes of the Federal Reserve split meeting held in July could also help to resolve some of this uncertainty about the central bank's view on persistently high inflation. Below, I'll go into more detail. Check out my mid-week article, in which I discuss diversification away from AI, and much more. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. BONDS OUT AND ROBOTS IN U.S. Yields are still near multi-decade highs but have seen some relief after the release on Tuesday of an industrial production report that was below expectations. Discussions continue to rage about the exact cause of this latest explosion in borrowing costs. This is especially true given that markets expect less Fed policy tightening now than they did just a few short weeks ago. Analysts believe that inflation concerns are only a part of the issue, since long-term expectations for inflation remain low. Investors are instead pointing to the "term premium" that is being charged on long-term bonds to compensate for uncertainty surrounding borrowing costs and debt sustainability in the future. This premium is at its highest in over a decade. On the energy front, however, little relief was seen heading into Wednesday. Crude oil prices were still high after the latest turn of events in the Iran conflict. But the real pressure is not on crude oil, but rather in refined products such as home heating and diesel. The "crack-spread" between crude and diesel futures, which is a measure of the global refinery capacity, has reached a new record this week. The spread between diesel and crude futures could increase as we move into the winter months. There was also some good news in the U.S. Canada trade relations. President Donald Trump temporarily halted a planned tariff increase of 50% on a variety of Canadian goods, as both parties had made progress in negotiations. Tariffs were set to be implemented this week. The AI stock market mania in China intensified when humanoid robotic maker Unitree rose about 600% after its debut on the market, and retail investors flocked to the IPO. Chart of the Day Unitree has attracted global attention with its robots which dance, run and perform martial arts. Stocks surged by 600% after the debut of the company on the tech-focused STAR Market. The company was valued at $50 billion. Tencent, Alibaba, and DeepSeek are among the most influential tech companies in China. A half-dozen other Chinese humanoid robots companies are also preparing for a public offering. Watch today's events * U.S. bond auction for 20 years (1 p.m. EDT) * Release of the FOMC minutes for July (2 p.m. ET) * ?U.S. Corporate earnings: Target Lowe's TJX Want to receive Morning 'Bids in your email every morning? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed by the author are their own. These opinions do not represent those of News. News is bound by the Trust Principles to maintain integrity, independence and neutrality. (By Mike Dolan).
Stocks fall but bond sales slow down
On Wednesday, global bond yields were at their highest level in decades as fears of a swelling sovereign debt drove borrowing costs up and roiled stock markets around the world.
U.S. stock futures and European stock futures wiggled around 0.2% lower in the Asia session. Japan's Nikkei dropped 3.3% and South Korea's KOSPI fell nearly 6% as Wall Street's selling of'semiconductor' stocks spilled into Asia.
The yield of the U.S. Long Bond has remained stable at around 5.27%, after reaching its highest level in almost 20 years on February 2, 5.3371%. German and French debt were also stable following a sell-off which took German 10-year and 30 year yields to the highest levels since 2011. French 30-year rates have risen by almost 50 basis points in just six months.
When bond prices fall, yields rise. This is important because long-end sovereign rates are used as a benchmark to determine mortgage rates and act as an anchor.
Sally Auld, chief economist at National Australia Bank, said: "Whether you're in property, equity or infrastructure, it could be a challenge for certain asset classes if there's a significant (bond) sell-off."
The rise of Japan's 10-year benchmark sovereign yield to 3% is also a warning for global debt markets, which have relied for years on low Japanese interest rates driving a steady flow of Japanese investments abroad.
Brent crude futures are also?parked at $90 per barrel despite no progress in a deal for the opening of the Strait of Hormuz.
The debt demand is also stretched by the soaring sales of AI hyperscalers. Bloomberg News reports that Alphabet is the latest to do this, as it reportedly wants A$5 billion ($3.5billion) from a bond sale in Australian dollars.
The U.S. Federal Reserve will release minutes of its July meeting, where rates were held. But Chair Kevin Warsh scared the markets by giving few hints about how it might react to persistent inflation.
The U.S. will also sell 16 billion dollars of debt with a 20-year maturity.
Investors no longer believe that government spending will be brought under control. Nigel Green is CEO of financial advisory deVere group.
Markets will continue to test which option governments choose.
DOLLAR STEADIES, STOCKS WOBBLE
Unitree shares, the world's largest humanoid robot maker, rose 600% in China on their debut. Retail investors bought the listing more than 8, 000 times, while the rest of the stock market followed the global mood.
Anthropic shares were sold after the bond sale and reports that Anthropic had a revenue run-rate of $65 billion by July's end, which was behind market expectations.
Although the movements were modest, the risk-averse sentiment has helped to support a softer?dollar on currency markets.
The Canadian dollar increased a little after U.S. president Donald Trump said that the two countries had agreed to a deal and he would pause imposing a tariff of?50% on Canadian goods for a period of three days.
The euro was hovering at $1.1586, and the yen at 159.23 dollars. This is just below 160, a level that investors believe could trigger another round of official intervention.
The European and British inflation figures are due on Wednesday, along with the earnings of Lowe's Target and TJX. These will be closely monitored after the softer than expected U.S. Retail Sales data last week.
Home Depot surpassed estimates for sales and profits in the second quarter on Tuesday. This was due to strong demand for repairs and maintenance from customers, despite U.S. statistics showing that homebuilding fell sharply in July as a result of rising mortgage rates. Reporting and editing by Shri Navaratnam, Sam Holmes and Tom Westbrook. $1 = 1.4128 Australian Dollars.
(source: Reuters)