US Treasury yields were steady in Asia on Thursday after the US Treasury announced it will double buyback sizes for 10- to 30-year Treasury debt securities to at least $4 billion per operation. This move, the second intervention by US Treasury Secretary Scott Bessent this month, aimed to counteract an ugly bond selloff. However, analysts warn that Bessent's willingness to interfere with market forces could prove costly in the longer run.
The selloff in Treasuries was driven by concerns over the total US debt, which has topped $40 trillion for the first time, and the hefty borrowing needs of developed economies. Meanwhile, in other markets, Australian employment unexpectedly fell in July, adding to signs of a cooling labour market and easing pressure for another interest rate hike.
Global Market Outlook
Markets are pricing in little chance of a rate hike from the Reserve Bank of Australia next month, but a move by the end of the year is still viewed as a coin toss, with much riding on inflation outcomes. Sweden's Riksbank is seen keeping its policy rate unchanged at 1.75% later in the day, given mild headline inflation thanks to a largely fossil-fuel-free energy system.
