[MARKET ANALYSIS] Fixed income benchmarks flat/lower; yields are slightly firmer

Fixed income benchmarks are lower/flat. Yields are firmer across the curve this morning, albeit only mildly so. This comes after the curve flattened in the prior session, following the US Treasury’s decision to double long-end buybacks, attempting to provide greater liquidity support. However, by all intents and purposes, markets have received the news as the Treasury being concerned about recent elevated yields. Some will also point towards the recent US-Japan cooperation on JPY intervention; whilst unlikely to be a main factor for the Treasury’s buy-back announcement, the timing is interesting. For now, yields are off recent peaks, but still remain towards multi-year highs. Fiscal concerns continue to remain the theme, with the US gross national debt now above the USD 40tln mark. The US30yr (5.22%) holds beyond the 5% mark, whilst the US10yr (4.66%) remains above the key 4.5% mark. ING opines that it is “unlikely” that the 10yr will fall below 4.5%, but believes it is “clear” that any move above 5% “or even the material threat thereof” would receive active resistance by the US Treasury. The key dates to watch are as follows: September 9th (the new doubled buyback goes into effect) and then November 4th (next QRA, where the current program window ends, and the Treasury will provide more updates on sizes/frequency). Bunds (-1 tick) and Gilts (-15 ticks) remain flat/lower, in what has been a quiet domestic newsflow session for the respective regions. On a macro level, energy benchmarks continue to rise (Brent Oct’26 +2%), with the latest bout of geopolitical updates indicating a resurgence of hostilities in the Middle East (see commodities for details).