Bessent's Buyback Fails to Ease Market Concerns; 30-Year Treasury Yield Holds at 5.24%, Dollar Weakens, Gold Rises and Oil Falls

After two days of severe volatility, the U.S. Treasury market has temporarily calmed down, but investors remain skeptical about the effectiveness of the Treasury Department's use of bond buybacks to control long-term borrowing costs, with the dollar weakening in tandem.

On Friday, U.S. stock futures edged higher, with Dow Jones 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 remained at a high of 5.24%, while the 10-Year Yield stabilized at 4.70%.

This round of severe volatility in the bond market has intensified market anxiety. A series of policy moves by the Treasury Department have highlighted market concerns about persistently high long-term yields. Years of high inflation combined with continued government spending have pushed up government financing costs, and this pressure is gradually transmitting to the broader economy. Meanwhile, high long-end interest rates have weakened the appeal of risk assets, strengthening safe-haven assets such as gold, with spot gold breaking through $4,550 per ounce.

Fabien Yip, an international market analyst at IG in Sydney, pointed out: "The Treasury Department's expanded buyback plan under Bessent has failed to effectively convince the market that long-term borrowing costs can be durably controlled. At the same time, unresolved tensions in the Middle East and the lack of strong growth momentum in tech stocks constitute additional pressure."

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

Key market movements are as follows:

• Dow Jones futures up 0.16%, S&P 500 futures up 0.2%, Nasdaq 100 futures up 0.4%
• Europe's Stoxx 50 opened up 0.1%, Germany's DAX index opened flat, UK's FTSE 100 index opened flat, France's CAC 40 index down 0.1%.
• Japan's Nikkei 225 index closed down 0.3% at 66,016.36 points. Japan's TOPIX index closed up 0.2% at 4,067.29 points. South Korea's Seoul Composite Index closed up 0.9% at 6,912.95 points.
• The 30-year Treasury yield remained at a high of 5.24%, while the 10-Year Yield stabilized at 4.70%.
• Japan's 40-year government bond yield rose 7 basis points to 4.145%.
• The Bloomberg Dollar Spot Index fell 0.2%.
• Spot gold rose 1.0% during the day to $4,562 per ounce.
• Brent crude oil fell 0.5% to around $93.31 per barrel, and WTI crude oil fell 0.7% to $86.22 per barrel.
• Bitcoin rose 3.7% to $75,356.

Treasury Yields Hold at High Levels; Strategic Uncertainty Exacerbates Concerns Over Term Premium

The 30-year Treasury yield continues to hover at a high of 5.24%, while the 10-Year Yield stabilizes at 4.70%.

In response to Thursday's market turmoil, Bessent downplayed the event, stating that "anything happening within 24 hours is just noise." He also revealed that the scale of the expanded buyback plan "could exceed" the originally scheduled $4 billion launch next month.

However, market participants warn that the U.S. Treasury Department's lack of predictability in debt management strategy could ultimately push up government borrowing costs. Investors and analysts from JPMorgan, Jefferies, and PGIM pointed out that this uncertainty could lift the term premium on Treasuries, which is the extra compensation investors demand to hedge against potential risks.

Hardika Singh from Fundstrat Global Advisors stated: "In my view, the 'Bessent Put' remains difficult to suppress yields that are at decades-high levels in the long term. To achieve a sustained decline in yields, concrete efforts must be made to reduce debt levels, which will certainly not be easy."

Dollar Weakness Combined with Rising Safe-Haven Sentiment Points to Continued Gold Gains, While Oil Faces Pressure

Boosted by the dual factors of a weaker dollar following the announcement of the U.S. Treasury Department's buyback plan and rising market safe-haven sentiment, prices for precious metals and industrial metals strengthened across the board.

In terms of gold, spot gold rose 1% on the day to $4,562 per ounce, poised to record a third consecutive weekly gain.

On the geopolitical front, according to Xinhua News Agency, U.S. Treasury Secretary Bessent stated on the 20th that the Trump administration would increase economic pressure on Iran and threaten "unprecedented economic isolation" measures against Iran.

In the crude oil market, Brent crude fell 0.3% to around $93.45 per barrel, ending its previous five-day winning streak. Jefferies strategist Mohit Kumar pointed out that oil prices may continue to run at high levels, which will put upward pressure on long-term Treasury yields.

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