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U.S. Treasury boosts long-dated bond buyback liquidity support operations
The announcement initially pushed the USD lower and helped lift gold and bitcoin, but 10-year and 30-year yields later climbed back to erase the early decline.
This week’s market focus centered on an unusual intervention by the U.S. Treasury, which said it would at least double “liquidity support buyback operations” for long-dated bonds. The move came after long bond yields hit new cycle highs earlier in the week, driven by higher oil prices, debt concerns, and weaker long-end demand for U.S. Treasuries.
Action Forex said the Treasury’s action also added to a broader sense of repeated market intervention, noting it followed an earlier episode in the FX market that supported the yen. On the Wednesday announcement, the USD fell immediately and precious metals and bitcoin rose, a pattern the outlet said is often associated with weakening confidence in U.S. governance.
While bond yields stayed lower for about a day after the liquidity support news, they then moved back up and erased the decline in both the 10-year and 30-year yields. Action Forex also pointed to comments from Treasury Secretary Scott Bessent on Thursday, saying the government would soon announce an increased focus on fiscal consolidation.
Beyond Treasuries, the week included renewed pressure in energy markets tied to rising tensions between the U.S. and Iran. Brent oil rose from USD88 to USD94, while the TTF European gas price jumped to a new cycle high of EUR66 per mwh, as Action Forex said it expects the oil market to keep seeing ebbs and flows.
Latest closeBrent $88.59 ▲1.8%|Bitcoin $77,492.02 ▲6.1%