bond

Friday’s trading brought a strong wave of optimism to Asian markets. Regional indices surged to their highest levels in more than three years, driven by easing geopolitical tensions and renewed hopes for trade deals. At the same time, the U.S. dollar came under pressure, hitting its lowest point in over three and a half years and heading for its biggest half-year decline since the 1970s.

🔹 Asia Celebrates Records, Investor Sentiment Improves

The MSCI Asia-Pacific index (excluding Japan) climbed to its highest point since November 2021 and was on track for a weekly gain of around 3%. Japan’s Nikkei jumped 1.5%, briefly surpassing the psychological barrier of 40,000 points for the first time since January.
The optimism in Asia followed a strong Thursday on Wall Street, where U.S. stocks rallied on growing investor confidence in an imminent Fed rate cut. European index futures also gained – EUROSTOXX 50 and DAX rose over 0.6%, while the UK’s FTSE added 0.16%.

🔹 Dollar Under Pressure: Markets Expect Fed Shift and Possible Leadership Change

The U.S. dollar fell to its lowest level since 2021 on Friday. It has lost over 10% since the start of the year and is on course for its biggest half-year drop since the free-floating currency system began in the 1970s.
Behind the weakening dollar are growing speculations of political pressure on the Federal Reserve. According to the Wall Street Journal, President Trump may replace Fed Chair Jerome Powell – possibly as early as September. Markets are increasingly pricing in an imminent rate cut.
The euro rose to $1.1745 – its highest level since September 2021. The pound climbed to $1.3733. The U.S. dollar index stood at 97.378, heading for its sixth consecutive monthly loss.

🔹 Oil Plunges, Gold Slightly Down

On commodity markets, oil drew the most attention. While it rebounded slightly on Friday – Brent crude added 0.52% to $68.08 per barrel, and U.S. WTI rose 0.61% to $65.54 – both benchmarks were still down over 10% for the week. The ceasefire between Iran and Israel eased fears of supply disruptions.
Meanwhile, gold, which has recently hit record highs, corrected slightly – down 0.23% to $3,320.25 per ounce.

🔹 Tensions Easing, Trade Talks Accelerating

Investors welcomed diplomatic progress between the U.S. and China. The White House confirmed that both powers are accelerating the supply of strategic resources, including rare earths. A positive signal also came from German Chancellor Friedrich Merz, who called for “fast and simple” trade deals within the EU.
Bond markets remained stable – U.S. 10-year Treasury yields held at 4.2554%, and 2-year yields at 3.7418%.

Summary:
After a turbulent period, global investors are finally breathing a sigh of relief. A weakening dollar, calm in the Middle East, and improved trade outlooks have created a wave of positive sentiment in the markets. Whether this holds through the summer will largely depend on the Fed – and who leads it.

#Asia , #stockmarket , #dollar , #bond , #worldnews

Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“

The United States is bracing for a major wave of debt issuance. If the debt ceiling is lifted, the U.S. Treasury could issue up to $1 trillion in new government bonds during the second half of 2025. Markets are already on alert, and traders on Wall Street are closely watching the potential impact.
🔹 Most of this issuance will be in short-term instruments – especially Treasury bills maturing in one year or less. While these can be issued quickly, they also challenge market demand due to the sheer volume.

Trump's Fiscal Plan Driving the Deficit Higher
President Donald Trump is pushing a major tax and spending package through Congress. According to the Congressional Budget Office, the plan would increase the federal deficit by $2.8 trillion over the next decade. While the bill may support the economy in the short term, it will also require additional government borrowing – adding further pressure on debt issuance.
Treasury Secretary Scott Bessent said the Senate could vote on the bill as early as Friday, with the House expected to follow. The key event hanging over the debate is the so-called "X-date" – the point when the U.S. government runs out of borrowing capacity under the current ceiling. That date is projected between July and August.

Massive Bond Supply Could Shake Markets – $1 Trillion Incoming
According to Mark Cabana of Bank of America, a "sharp acceleration" in bond supply is imminent. He predicts that as much as $700 billion could flood markets just in August and September. A similar forecast came from Gennady Goldberg of TD Securities.
Repo rates could initially dip due to oversupply. However, if demand doesn't keep pace, rates could spike rapidly – especially in the 2-to-7-year maturity range.
Longer-term bonds (10–30 years) are unlikely to see major changes. In fact, Goldberg expects a possible reduction in long-end issuance, while the Treasury focuses on short and mid-term bonds like 2-, 3-, 5-, and 7-year notes.

Cash Is Available – But Will It Flow Into Treasuries?
Money market funds, which now hold a record $7.4 trillion in assets, could theoretically absorb the new debt. But many of these funds have already started shifting away from government debt in favor of private repo trades that offer higher returns.
So, while liquidity exists, it may not go into Treasuries. This mismatch in supply and demand could pose a major risk – just as the government prepares its largest bond issuance in years.

What’s Next?
It all comes down to timing. If Congress lifts the debt ceiling in time and demand holds up, the market might absorb the shock. If not, bond traders are in for a rough ride.

#WallStreet , #bond #market , #TRUMP , #economy

Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“