Headlines:

• Gold stays poised to post third straight week of gains
• US Treasury move risks creating unintended consequences for markets and the economy
• Why markets care more about the signal than the size of the Treasury buyback
• How have interest rate expectations changed after this week’s events?
• Stock market sector rotation explained: Where investors are moving their money now
• ECB’s Kazāks says September decision will be based on data, adds there are pros and cons to hiking further
• French business activity contracts further in August as demand conditions remain subdued
• Germany August flash manufacturing PMI 54.1 vs 52.0 expected
• Euro area business activity sees further pick up in August despite France, Germany softness
• UK August flash services PMI 52.8 vs 51.8 expected
• UK retail sales fall in July as early summer buzz fades

Markets:

• AUD leads, USD lags on the day
• Gold up 1.7% to $4,596
• WTI crude oil up 0.4% to $87.20
• US 10-year yields down 0.6 bps to 4.692%
• European indices slightly higher; S&P 500 futures up 0.4%
• Bitcoin up 6.6% to $77,502

Markets continue to debate the US Treasury decision to double long-term debt buybacks this week, with the dollar falling off again as Treasury yields stall after a bounce yesterday.

10-year yields in the US climbed back to 4.70% while 30-year yields pushed to 5.25% before easing back a little and that is sustaining the relief as the “Bessent put” stays in place. In turn, the dollar is seen falling across the board with EUR/USD testing waters above 1.1700 and GBP/USD hitting fresh 6-month highs of 1.3660. Elsewhere, USD/JPY is down 0.3% to 158.60 while AUD/USD is up 0.8% to 0.7165 on the day.

In terms of economic data releases, euro area PMI data saw France and Germany disappoint but the overall Eurozone data was more positive in being carried by a better showing by the rest of the region. Menawhile, UK PMI data was also more positive but it also saw inflation pressures ramp up. So, there’s that.

But in terms of market impact, the PMI data didn’t do much. It’s all on the continued focus on the reaction to the US Treasury move from earlier this week.

Gold is the biggest winner it would seem, climbing further to briefly clip $4,600 earlier and still up by 1.7% to $4,596 currently. Silver also briefly touched $70 and is up 2.6% to $69.90 at the moment.

In other markets, equities are looking to find a steadier footing to close out the week with European indices up a little while Wall Street looks to bounce back from yesterday’s setback. S&P 500 futures are up 0.4% while Nasdaq futures are up 0.6%.

And quietly, we’re also seeing cryptocurrencies surge higher again in extending gains from earlier this week with Bitcoin keeping above $77,000.

This article was written by Justin Low at investinglive.com.