The Bessent twist adds another wrinkle.
Treasury's move initially compressed the long end, which should ordinarily have supported tech through lower discount rates, but tech underperformed the rates rally. Now the 10-year yield is back where it started and tech is rolling over again. With AI increasingly capital-intensive, hyperscaler CDS widening and semis vol having collapsed, the setup is worth watching. Rates relief didn't do much for tech. Now that relief is disappearing. Source: The Market Ear
One Treasury announcement. A violent move across bonds, gold, silver and crypto.
The US Treasury announced it will at least double buybacks of long-dated Treasuries, from $2bn to $4bn per operation. Markets reacted immediately: 📉 30Y Treasury yield: 5.34% → 5.18% 🥇 Gold: +3.1% 🥈 Silver: +4.1% ₿ Bitcoin: +7.8% Ξ Ethereum: +10% 💵 Dollar: -0.7% Why does it matter? The US already spends roughly $1.4 trillion annually on interest, while trillions of low-cost debt must be refinanced at much higher rates. And this isn't just an American problem: long-term government yields are surging globally. The biggest wildcard may be Japan. As Japanese yields rise, domestic investors have less incentive to finance US and European governments. 👉 The bond market is increasingly becoming the key macro risk—and falling yields remain rocket fuel for gold and crypto. Source: Bull Theory
The three largest foreign holders of US Treasuries all reduced their exposure in June.
🇯🇵 Japan: sold $26B, cutting holdings from $1.143T to $1.117T. 🇨🇳 China: sold another $26B, bringing its Treasury holdings down to just $633B — the lowest level since September 2008. 🇬🇧 UK: holdings declined by $9B to $940B. But the bigger story may be the collapse in foreign demand. 📉 Total foreign holdings of US Treasury bonds and notes increased by just $6.8B in June, compared with $56.6B in May. At a time when Washington needs to finance enormous deficits, its biggest foreign creditors are becoming increasingly reluctant buyers. More supply. Less foreign demand. Higher yields? 👀 Source: Bull Theory
Hyperscalers are quietly becoming giants of the bond market.
Many investors might still underestimate the sheer scale of debt issuance coming from Big Tech. At the current pace, hyperscalers could become as significant in the investment-grade bond market as the largest global banks within just a few years. The AI infrastructure boom isn’t just reshaping technology. It’s reshaping credit markets too. Source: BofA, Tracy Alloway
AI is driving up Treasury Yields (through the crowding out effect)
Source: Barclays, Bloomberg
In case you missed it... US 30-year government bond yields hit 5.31%, highest since 2007.
~$2tn deficits, sticky inflation, heavy long-bond supply due to AI-fueled corporate borrowing are lifting term premia as traditional demand fades. Even softer data can't stop the selloff. Source: HolgerZ, Bloomberg
The 🇯🇵 Japanese 10 year yield just jumped to 2.93%.
Can the parabolic rise continue without hurting global bond markets and stocks? Source: Financelot
The Bloomberg Global Long Bond Index yield has surged to around 4.2%, its highest level since July 2008.
Long term government borrowing costs are now back at levels last seen during the global financial crisis. The good news is that bond yields are rising alongside earnings growth and real GDP growth upside revisions. The bad news: with governments carrying far more debt today, higher yields are making refinancing increasingly expensive. This could become a major pressure point for global financial markets. Source: Bloomberg
