Persistent Market Doubts Despite Bessonett Buybacks: 30-Year U.S. Treasury Holds at 5.24%, Dollar Softens, Gold Rises, Oil Falls

After two days of violent swings, the US Treasury market has temporarily calmed, but investors remain skeptical about the effectiveness of the Treasury’s bond repurchase operations in controlling long-term borrowing costs, while the US dollar weakened simultaneously.

On Friday, US stock futures rose slightly, with Dow futures up 0.16%, S&P 500 futures up 0.2%, and Nasdaq 100 futures up 0.4%. In the bond market, the 30-year Treasury yield held at 5.24%, while the 10-year yield remained stable at 4.70%.

The latest sharp volatility in the bond markets has heightened anxiety among investors. A series of Treasury policy developments have highlighted the market’s ongoing concerns over high long-term yields. Years of elevated inflation combined with persistent government spending have already driven up government financing costs, and this pressure is gradually being transmitted to the broader economy. Meanwhile, high long-term rates have diminished the appeal of risk assets, while safe-haven assets such as gold have surged, with spot gold surpassing $4,550/oz.

Fabien Yip, an analyst at IG International Markets in Sydney, pointed out: “The Treasury’s expanded repurchase program under Besant’s lead has still failed to convince the market that long-term borrowing costs can be durably contained. At the same time, ongoing Middle East tensions and a lack of strong growth momentum among technology stocks are adding extra pressure.”

Currently, market focus is shifting toward next week’s Nvidia earnings report, as well as the Jackson Hole global central bank symposium to be held next week.

Key market movements are as follows:

• Dow futures up 0.16%, S&P 500 futures up 0.2%, Nasdaq 100 futures up 0.4%

• Euro Stoxx 50 index opened up 0.1%, German DAX was flat, UK FTSE 100 flat, French CAC 40 down 0.1%.

• Nikkei 225 closed down 0.3% at 66,016.36 points. TOPIX closed up 0.2% at 4,067.29 points. South Korea KOSPI closed up 0.9% at 6,912.95 points.

• 30-year US Treasury yield remained at 5.24%, 10-year yield steady at 4.70%.

• Japan’s 40-year government bond yield rose 7 basis points to 4.145%.

• Bloomberg Dollar Spot Index fell 0.2%.

• Spot gold rose 1.0% on the day to $4,562/oz.

• Brent crude fell 0.5% to about $93.31/barrel, WTI crude fell 0.7% to $86.22/barrel.

• bitcoin rose 3.7% to $75,356.

US Treasury Yields Hold High, Strategy Uncertainty Increases Term Premium Concerns

The 30-year US Treasury yield is still hovering at a high of 5.24%, with the 10-year yield stable at 4.70%.

In response to Thursday’s market volatility, Besant played it down, saying that “Anything that happens in 24 hours is just noise.” He also revealed that the expanded repurchase program could be “greater” than the original $4 billion planned to begin next month.

However, market participants warn that a lack of predictability in the Treasury’s debt management strategy could ultimately drive up government borrowing costs. Investors and analysts at JPMorgan, Jefferies and PGIM noted that this uncertainty may raise the US Treasury term premium, meaning the extra compensation investors demand for hedging potential risks.

Hardika Singh of Fundstrat Global Advisors commented: “In my view, the ‘Besant put’ still struggles to contain yields at multi-decade highs in the long run. What’s needed for yields to trend lower is a genuine push to reduce debt levels, and that’s anything but easy.”

Dollar Weakening Adds to Safe-Haven Demand, Gold Rallies Expected, Crude Oil Under Pressure

Boosted by the dollar’s decline after the Treasury’s buyback plan announcement and rising risk aversion in the market, both precious and industrial metal prices moved broadly higher.

In gold, spot prices were up 1% on the day at $4,562/oz, with the weekly chart heading for a third consecutive week gain.

On the geopolitical front, according to Xinhua News Agency, US Treasury Secretary Besant said on the 20th that the Trump administration would increase economic pressure on Iran and threatened to impose "unprecedented economic isolation measures" on the country.

In the oil market, Brent crude fell 0.3% to about $93.45/barrel, snapping a five-day winning streak. Jefferies strategist Mohit Kumar noted that oil prices may remain high, which will put upward pressure on long-term Treasury yields.