Market News

• High yield: 2.973%
• WI level at the time of the auction 2.991%
• Stopped through by 1.8 bps
• Bid-to-cover ratio 2.82X
• Direct (domestic buyers) 13.4%
• Indirect (international buyers) 84.4%
• Dealers 2.1%

The US Treasury's $9 billion auction of 30-year Treasury Inflation-Protected Securities (TIPS) attracted exceptionally strong participation from foreign investors.

The auction stopped at a high yield of 2.973%, below the 2.991% when-issued (WI) yield trading in the market at the time of the sale. The resulting 1.8 basis point stop-through indicates investors were willing to accept a lower yield than expected to secure the bonds, a sign of stronger demand.

Demand metrics were also robust. The auction recorded a bid-to-cover ratio of 2.82x, meaning…

• Strong growth and investment is influencing bond market
• Fed credibility is not in question
• Fed is focused on making monetary policy independent of fiscal policy
• Monetary policy is neutral or accomodative right now
• Financial conditions are pretty accomodative here
• Number one concern of public is inflation
• Businesses are facing high input costs
• Super El Nino might be next supply shock
• Given current Fed rates, see lower probability of getting inflation to 2%
• Hiking rates now could save more aggressive action later
• Underlying inflation is between 2.5-3.0%, and it's too high and must be lowered
• Productivity is seeing a recovery
• The best thing the Fed can do for growth is get inflation back to 2%
• Forward guidance is useful when rates are at zero
• Forward…

• Buyback could be more than 4 billion
• Part of it is signalling 
• We want to show that yields do not reflect underlying fundamentals
• Probably going to announce increased focus on fiscal consolidation 
• Nothing magic about $40 trillion debt number
• Expect tariff 2026 income will be similar to 2025
• Very good chance we've seen peak deficit
• Market got a little ahead of itself
• Treasury and the Fed would work together if any change in balance sheet
• Rates have nothing to do with the buyback decision
• We would adjust to any kind of Fed bond runoff
• We will see what the conditions are in the bond market and whether more action will be needed
• Need to focus on the fundamentals
• We're trying to keep the market in equilibrium

On Iran:

• Press conference on Monday to discuss…

• Prior -0.2% (revised to -0.1%)

The Conference Board Leading Economic Index increased by 0.2% in July, after an upwardly revised decline of 0.1% in June. As a result, the LEI’s six-month growth rate turned positive, to an increase of 0.2% between January and July 2026, a sharp reversal from its 1.3% contraction over the previous six months.

“The Leading Index for the US ticked up in July, marking the fourth increase over the past six months,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “Most components were positive in July except consumer expectations, which continued to be a notable drag on the overall index. With the most recent gains, the LEI’s six-month growth rate turned positive…

Headlines:

• Will the US Treasury buyback be a game changer for markets?
• Why gold and Bitcoin surged together: What Treasury buybacks teach investors about dollar debasement
• Chart of the day: Is the Nasdaq breakout retesting or failing?
• EUR/USD extends gains to fresh three-month highs after yesterday's break
• Iran foreign minister plays down US president Trump's economic threat
• Walmart shares fall on signal that consumers are pulling back on spending
• German producer prices nudge up again in July as energy prices rise further

Markets:

• CAD leads, JPY lags on the day
• European equities mostly lower; S&P 500 futures down 0.2%
• US 10-year yields up 4.1 bps to 4.694%
• WTI crude up 3.4% to $88.70
• Gold down 1.1% to $4,469
• Bitcoin up 4.1% to $71,916

Markets are still…

• Prior 209K (revised to 212K)
• Continuing claims 1799K vs 1790K expected
• Prior 1777K (revised to 1781K)

Initial jobless claims fell to 206,000 for the week ending August 15, below the 210,000 consensus forecast. The previous week's figure was revised higher to 212,000 from 209,000.

The data suggest that employers continue to hold onto workers despite signs of moderation. Initial claims remain well below levels typically associated with a deteriorating labor market, reinforcing the view that layoffs are still relatively scarce.

Continuing claims, which measure the number of people already receiving unemployment benefits, rose to 1.799 million, above the 1.790 million expected. The prior week's figure was also revised higher to 1.781 million from…

• Prior -1.4%
• PPI Y/Y +12.4% vs +12.4% prior
• Raw Material Price index M/M -2.2% vs -6.9% prior
• Raw Material Price index Y/Y +18.1% vs +20.7% prior

• Prior was +41.4

Details:

• New orders 30.1 versus 37.0 last month
• Shipments 27.7 versus 33.7 last month
• Unfilled orders 14.4 versus 18.1 last month
• Delivery times 3.7 versus 9.6 last month
• Inventories -3.7 versus 0.3 last month
• Prices paid 40.9 versus 53.9 last month
• Prices received 17.7 versus 27.4 last month
• Number of employees 27.9 versus 10.0 last month
• Average employee workweek 26.5 versus 14.0 last month

Six-months from now indicators:

• 6 month index 73.6 vs 34.4 last month
• Capex index 6-month forward 48.2 versus 30.1 last month
• New orders 66.0 versus 35.1 last month
• Shipments 63.5 versus 39.3 last month
• Unfilled orders 8.5 versus 20.9 last month
• Delivery times 0.0 versus 9.3 last month
• Inventories 17.4 versus 12.5 last month
• Prices paid 62.9 versus…

• Rise in long term yields is a global issue, not a signal for the Fed
• I don't see Fed credibility at risk
• Short term yields show markets understand Fed reaction function
• Policy is in a good place, watching markets
• I don't see evidence calling for pre-emptive rate hikes
• Modal outlook expects inflation shocks will dissipate
• I was very supportive of Fed's July interest rate hold
• Recent jobs and inflation data have not changed outlook so far
• I am looking for signs of more worrying inflation, not seeing that
•  I don't see the job market contributing to inflation right now
• Fed will stick to its job regardless of Treasury action
• Fed really has to focus on achieving its inflation target
• I don't see any signs of labor market faltering
• I am not seeing broad…

Have years of trading experience and knowledge worth sharing? investingLive Academy is now welcoming new instructors.

Trading knowledge is built over time.

It comes from following the markets, testing ideas, learning from mistakes and developing a better understanding of how trading works.

Now, experienced traders and financial educators have the opportunity to share that knowledge with others.

investingLive Academy is now accepting applications for its Instructor Programme, inviting qualified trading professionals to create courses, build an audience and earn as they grow on the platform.

If you have at least five years of trading experience, you can apply to become an instructor and start creating your first course once approved.

Turn Your…

Walmart shares were trading roughly flat in pre-market just before the earnings call but are now down by roughly 5.7% after.

The US retailer reported a beat on earnings per share of $0.81 versus expectations of $0.75 and also raised its annual targets slightly for the first time this year. That being said, the devil is in the details with comparable sales i.e. same-store sales heavily missing on estimates and only seeing a rise of 2.6% in Q2. Market expectations were for that to hit around 3.7% to 3.8%.

In essence, that's a key metric in signaling that consumers are pulling back on spending in the wake of rising gas prices among other things.

Walmart's earnings call is often times looked as a bellwether for the US consumer, as it helps to…

• Poor weather conditions have hampered economic recovery
• Limited usable transport routes on major rivers likely to impair industrial output, export growth
• The low water levels are noticeably impacting overall economic activity in the third quarter
• ECB rate hikes are also dampening sentiment on corporate investment
• Inflation could rise even higher temporarily but outlook still largely dependent on Middle East conflict
• No evidence yet of second-round efects on inflation through wages at least

For some context, months of dry weather have left the Rhine and a number of rivers in Germany with shallow waters - to the point that vessels have been unable to sail fully loaded. In turn, that has increased shipping costs and also result in slower transport…