Treasury Yields Rise Despite Increased Buyback Plans — Market Talk

1557 ET - Treasury yields end the week higher, even after the Treasury Department says it will double to $4 billion the size of each buyback operation targeting long-dated bonds, starting next month. Investors require higher yields in Treasury auctions, but demand is generally firm. PCE inflation is expected to tick higher and investors await Fed Chairman Warsh's Jackson Hole speech late next week. Oil rises 7% this week and the WSJ Dollar Index falls 1%. The 30-year yield rises 0.011 percentage point this week to 5.276%. This week, the 10-year adds 0.041 p.p. to 4.737% and the two-year rises 0.061 p.p. to 4.232%. ([email protected]; @ptrevisani)1337 ET - Hyperliquid, the upstart token native to the Hyperliquid platform, has risen to a new record-high amidst the rush of gains seen across the cryptocurrency market. The HYPE token is up 3.8% currently, to $76.46, according to LSEG data. It's a new record-high for Hyperliquid, which is the freshest addition to the top 5 cryptocurrencies, measured by both trading volume and market capitalization. Supporting the uptick is President Trump mentioning Hyperliquid during this week's crypto forum held at the White House. The claim that officials are working to allow the Hyperliquid platform to operate in the U.S. instilled fresh optimism into trading. Hyperliquid is up roughly 193% year-to-date. ([email protected])1336 ET - The WSJ Dollar Index stabilizes around a multi-month low as markets juggle resilient data and the Treasury's plan to increase its long-term bond purchases. The S&P U.S. Composite PMI rises to 56 in August from 54.5 in July, indicating activity growth is accelerating. Treasury yields recover from lows reached earlier this week after the buyback announcement, but not enough to boost the greenback. The WSJ Dollar Index slips 0.2% to 95.31, after touching 95.25 earlier, which was its lowest since May. The greenback weakens slightly against the yen and the euro, while strengthening 0.1% versus the Swiss franc. ([email protected]; @ptrevisani)1249 ET - The Trump administration's efforts to cap bond yields is fueling the rally in gold and bitcoin, which capitalized on the situation, BankPro's CEO Paolo Broccardo says in a note. "The use of non-market methods by the authorities is fueling demand for alternative assets outside the traditional financial system." The Treasury Department's announcement that it will raise the amount of longer-term bond purchases, meanwhile, overshadowed the publication of the FOMC minutes, he adds. "Investors ignored the fact that the number of 'hawks' on the committee is growing, which could lead to higher interest rates." New York gold futures are up 2.1% at $4,667.60 an ounce. Bitcoin gains 6.5% and trades around $77,391. ([email protected])1212 ET - Revised data for Mexican gross domestic product are expected to confirm the recovery in economic activity in the second quarter, with a broad-based pickup after the 1Q contraction. 2Q GDP is seen up 1.5% seasonally adjusted from the previous quarter, in line with the advance estimate released at the end of July, according to a WSJ survey. GDP is seen up 2.2% unadjusted from the year-earlier quarter, also unrevised from the previous report. National statistics institute Inegi is scheduled to report revised 2Q GDP on Monday. ([email protected])1201 ET - Mexican consumer prices likely saw moderate increases in the first half of August, but enough to nudge up the annual inflation rate. The consumer price index is expected to have risen 0.11% in the first two weeks of the month, putting 12-month inflation at 3.27% compared with 3.14% in the second half of July, according to a WSJ survey of analysts. Core CPI is seen rising 0.13% for an annual rate of 3.99%, up from 3.95% in the second half of July. Statistics institute Inegi is scheduled to report mid-August inflation on Monday.([email protected])1159 ET - Consumer resilience in Canada may have run its course amid an early estimate that retail sales fell in July, Oxford Economics says. Retail-sales volumes in June rose a hearty 1.5% in June, Statistics Canada reports, beating market expectations. Still, "we expect consumer outlays to grow at a softer pace in H2 amid a weak labour market, shrinking population, and sticky gasoline prices," says the firm's economist, Michael Davenport. ([email protected]; @paulviera)1125 ET - The premiminary reading that Canadian retail sales declined 0.8% on-month in July would mark the first decline this year and highlights the risks consumer face in keeping up momentum amid trade- and war-driven uncertainty, Bank of Montreal's Shelly Kaushik says. The economist says consumers showed in June, pushing sales up 0.6% for the month, 0.2 percentage point better than Statistics Canada's prior flash estimate. Sales volumes rose 1.5%, the most in over a year. Kaushik says this has monthly GDP tracking better than the initial estimate of 0.2% growth for June, given firmness in manufacturing and wholesale volumes that month. ([email protected]; @RobbMStewart)1113 ET - The further rise in U.K. PMIs and consumer confidence at its highest level in two years suggests households and businesses have taken the Iran war and government change of administration remarkably well, RSM U.K.'s Thomas Pugh says. "If we're not careful, we might have to stop talking about resilience and actually start talking about a reasonable economic performance this year," he says in a note. The second half looks more challenging, with oil prices rising again and inflation set to climb to 3.5%. The government's budget announcement has the potential to make or break the final quarter, Pugh says. "A repeat of the confidence-sapping speculation about tax rises will cause growth to slow sharply. However, the economy is clearly holding up so far this year." ([email protected])1036 ET - Bitcoin has gained nearly 25% this week, but may have finally encountered a price point that's too high in the short-term at $80,000. Bitcoin spiked at $79,258 overnight, and has since retreated to around $77,000. It's a new near-term resistance level, serving as both a psychological and technical resistance point, says Lacie Zhang of Bitget Wallet. "A clean daily or weekly close above $80,000 would likely shift attention to the $82,000 to $84,000 supply area next," says Zhang. If bitcoin retreats back toward $70,000, that "would suggest this was more of a fast positioning squeeze than the start of a durable new leg." Bitcoin is up 5.5% to $76,685, according to LSEG data. ([email protected])1017 ET - U.S. Bitcoin and Ether exchange-traded products saw net sales of $608 million and $184 million, respectively, on Thursday, J.P. Morgan analysts estimate, as crypto investors jump on positive signals from U.S. regulators and a weaker dollar. These flows were an acceleration from already-strong flows on Wednesday, they write. Flows were concentrated in BlackRock's Bitcoin ETF, which saw inflows of $504 million, they say. Funds managed by Fidelity and Bitwise also saw significant inflows. Trading volumes totaled $5.405 billion Thursday, well ahead of the running daily average of $3.22 billion, they say. Bitcoin rises 5.4% to $76,965.03, while Ether--the token of blockchain network Ethereum--adds 2.3% to trade at $2,379.82. ([email protected])1012 ET - Statistics Canada's early estimate on July retail sales — a 0.8% month-over-month drop — indicates that consumer strength has waned with gas prices on the upswing, says Thomas Ryan, economist at Capital Economics. Gas prices rose in July following the resumption of U.S. military attacks on Iran. That increase "has already taken the steam out of spending," Ryan says. He adds consumer spending is likely to continue slowing, and should calm any worries among Bank of Canada policymakers about any overheating of the Canadian economy. ([email protected]; @paulviera)