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Long bond yields near 20-year high as oil, yen add to market tension

Created at 11 Aug · 10:43 AM1 source↑ Market-relevant
IN SHORT

U.S. Treasury yields are under pressure from renewed energy market tightening and a weakening yen, with the 30-year yield nearing a two-decade high. Investors await key U.S. inflation data.

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Key Numbers

$90Brent crude price in dollars per barrel
5%Yesterday's rise in Brent crude
5.28%30-year Treasury bond yield
20 yearsHighest yield level for 30-year Treasury
159Yen per U.S. dollar level
$100 billionApproximate dollar sales in recent yen intervention
$500 billionAI financing pools Nvidia is raising
$20 billionAmount Intel raised from share offering
4%Intel's share price fall on Monday

Who's Involved

Mike Dolan
Editor-at-Large, Finance and Markets
U.S.
Insisting on its terms for prospective deal with Iran
Iran
Demanding Washington lift sanctions and pay reparations
Federal Reserve
Challenged by Trump's latest stance
Nvidia
Announced AI financing push
Intel
Raised $20 billion from share offering
Bank of Japan
Doubts about willingness to tighten monetary policy

↳ Why This Matters

Rising inflation concerns, driven by energy market tensions and currency weakness, are increasing volatility in the bond market and potentially impacting stock performance. These factors also highlight ongoing challenges in managing global financial stability and supporting key technological sectors like AI.

Key facts

  • Brent crude prices rose significantly, nearing $90 a barrel.
  • Disagreements between the U.S. and Iran have stalled hopes for reopening the Strait of Hormuz.
  • The 30-year U.S. Treasury yield approached its highest level in nearly two decades.
  • The Japanese yen weakened past 159 against the U.S. dollar.
  • Nvidia is working with Wall Street firms to raise $500 billion for AI infrastructure.
  • Intel raised $20 billion from an upsized share offering.

U.S. Treasury yields are facing renewed pressure from tightening energy markets and a weakening yen, pushing the 30-year bond yield close to a 20-year high ahead of crucial inflation data. Brent crude rose nearly 5% to trade around $90 a barrel as hopes for the reopening of the Strait of Hormuz diminished due to entrenched positions between the U.S. and Iran.

The Japanese yen also weakened past 159 per dollar, testing the resolve of U.S. and Japanese authorities to support the currency after recent joint interventions. Doubts persist about the Bank of Japan's willingness to significantly tighten monetary policy to bolster the yen.

In corporate news, Nvidia announced it is working with major Wall Street firms to raise $500 billion in financing pools to support AI infrastructure. Meanwhile, Intel raised $20 billion from an upsized share offering, though its shares fell 4% on Monday following the announcement.

Frequently asked questions

Renewed tightening in energy markets and a weakening Japanese yen are adding to market tension, alongside anticipation of U.S. inflation data.

The Strait of Hormuz is a critical chokepoint for global oil supply, and its potential closure or disruption due to U.S.-Iran tensions directly impacts oil prices and market stability.

A weaker yen can signal doubts about Japan's monetary policy and potentially lead to liquidation of Japanese holdings in U.S. Treasuries, impacting the bond market.

Nvidia is collaborating with major Wall Street firms to establish financing pools totaling $500 billion to support the expansion of AI infrastructure.

What Happens Next

01U.S. existing home sales data to be released.
02U.S. 3-year note auction scheduled.
03CoreWeave corporate earnings report due.

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Cadence
CME Headlines
  • Japanese Yen futures fell as unexpected trade deficit weighed.
    10 Aug · 10:10 PM
  • Japanese Yen futures fell as unexpected trade deficit weighed.
    10 Aug · 10:10 PM
  • 10-Year T-Note futures fell as crude prices rose and inflation data loomed.
    10 Aug · 9:29 PM

How It Developed

Brent crude traded near $90 a barrel after a 5% rise.
Hopes for the Strait of Hormuz reopening diminished due to U.S.-Iran disagreements.
The 30-year Treasury yield approached its highest level in nearly 20 years.
The Japanese yen weakened past 159 per dollar.
Nvidia announced plans to raise $500 billion for AI infrastructure.
Intel raised $20 billion from a share offering, with its stock falling.

Sources

T1
Morning Bid: Long bond botherReuters

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