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Bond traders wondered when enough is enough. Now we have the answer: U.S. Treasury is not ready to tolerate 30yr yields above 5.30%.

Treasury decided to increase buyback of long-dated bonds by at least double as Bessent attempts to protect the right side of the curve.

Not surprisingly, traders rushed to buy long-dated bonds after the announcement. However, the key question is whether buybacks will be able to push the yield back to comfortable levels.

What is "comfortable" nowadays? Well, the 4.50% - 5.00% range for 30yr would be a success given the state of U.S. finances - the ever-growing debt pile and the chronic budget deficit.

Will U.S. Treasury change the trend in bond markets? In the short-term, that's possible. Talking about long-term perspectives, the market needs fundamental changes rather than tactical attempts to break the trend with buybacks.

Here's another obstacle for NASDAQ on the way to historic highs: global bond market sell-off. Here's why it matters.

Tech companies used to be immensely cash-positive. They were cash cows on steroids. Not anymore: AI demands huge investments.

To make these investments, tech leaders started selling bonds. The volume was huge, so it had an impact on government bonds in developed countries, pushing their yields higher. In turn, higher yields of benchmark bonds make financing more expensive for everyone, including tech.

Put simply, tech is now sensitive to global yield dynamics in a real way. Previously, yields impacted tech stocks via fluctuations of risk appetite. Now, yields indicate how expensive (or cheap) their next debt financing round will get.

That said, NASDAQ will have an opportunity to get back to the previous trend in case the debt market situation calms down in the next few sessions. If the bond market sell-off continues, NASDAQ may find itself under strong pressure.

Traders expect that Fed will leave interest rates unchanged at the next meeting in September. FedWatch Tool indicates that the probability of this outcome is 67.4%. However, long-term yields have climbed above the key 5.00% level and test multi-decade highs. Why?

There are two key reasons for this move. First, investors are worried about long-term sustainability of US finances. Debt is rising at a robust pace, and US shows no desire to eliminate the budget deficit. Second, hyperscalers are selling boatloads of long-term debt, and some managers are selling their Treasuries to buy these AI bonds.

Typically, all governments prefer to sell long-dated bonds as it makes their debt load manageable. US is forced to increase supply of shorter-term bonds to avoid crushing the right end of the curve. The stock market is trading as if nothing's going on in the debt market as traders are focused on AI hype.

The key question is when stock investors notice that something is broken in the debt market, which is the key pillar of the financial system.

WTI attempts to get out of the previous channel as US changes its strategy in Iran. Treasury Secretary Bessent said that US prepared an unprecedented economic isolation plan for Iran.

For oil markets, this plan means that US will not restart the military operation against Iran - at least, in the near term. Instead, US will attempt to put maximum economic pressure on Iran to force the country to reopen the Strait of Hormuz.

It remains to be seen whether this strategy would be successful. In almost any scenario, this "waiting game" means that the Strait of Hormuz would remain closed for weeks and, perhaps, months. This is a bullish fundamental setup for oil.

It is not clear why traders are so cautious and oil prices are well below this year's highs. Maybe they see something we could not see, but market fundamentals look extremely bullish in case US tries to suffocate Iran with economic sanctions as such a strategy would take many months to implement.

Gold gained strong momentum after it finally managed to break out of the downside channel. It looks that central banks keep buying while investment demand for gold increased.

Recent changes in Fed policy outlook are the key driver behind gold's rally. The market no longer expects that Fed will raise rates in September.

FedWatch Tool indicates that the probability of a rate hike in September is 40.1%. The market still expects that Fed will ultimately raise rates in December, but these expectations do not put any pressure on gold markets.

Today's US CPI data showed that Inflation Rate decreased from 3.5% in June to 3.4% in July. Core Inflation Rate declined from 2.6% to 2.5%. Both reports met analyst expectations. Inflation remains well above Fed's 2% target, but the key thing is that inflation spike was temporary.

In this environment, gold has a decent chance to continue its move, targeting the $4900 level.

WTI oil rallied as U.S. - Iran negotiations failed. Earlier, U.S. signaled progress in negotiations but Iran had suddenly demanded reparations for war damages.

President Trump indicated that U.S. was ready to wait as Iran suffered huge economic losses due to naval blockade. Public signals from both sides should not be viewed as forecasts - obviously, the U.S. may restart the military operation against Iran in case it is deemed necessary.

Both scenarios are bullish for oil. The only bearish scenario is a U.S. - Iran deal, but the probability of this outcome is declining on a daily basis. Iran believes that it has an upper hand in negotiations. It does not matter if the country's calculations are correct - the key thing is that the Strait of Hormuz would remain closed in the near term.

Technically, WTI oil will have a good chance to test the $90.00 level in case it moves out of the current channel.

USD/JPY rebounds after a massive joint intervention by US and Japan. US joined the effort to prevent Japan from selling Treasuries. The strong move has certainly wiped out some USD/JPY bulls, but fundamentals remained intact.

Japanese yields are simply too low. The BoJ interest rate is at 1%, which is nowhere close to a reasonable level. Japanese 10yr bonds yield 2.77%, well below US 10yr at 4.67%. The spread is too big, fueling the carry trade and putting never-ending pressure on the Japanese yen.

The only question is whether Japan and US are ready to act again. In case they fail to intervene, USD/JPY will get back to the 164.00 level. Treasury yields are rising, which is bullish for USD/JPY. Technically, USD/JPY was pushed out of the upside channel by the intervention, but it looks that is ready to settle back inside the previous channel, confirming the strength of the bullish trend.

It's hard to expect a fast rebound towards previous highs as bulls will be cautious after the strong intervention, but yen's fundamentals are too bearish to ignore.

Taking a look at the weekly chart, gold has finally moved out of the previous channel and looks ready to gain upside momentum.

Central banks keep buying to diversify their reserves amid geopolitical uncertainty and fiscal problems in developed countries.

Expectations of a new rate hike cycle in the US were the key catalyst that was pushing gold lower in 2026. These expectations reduced investment demand for gold.

It looks that gold is finally ready to move higher. The situation in the Middle East has calmed down, and it is clear that US wants to avoid a $100+ oil scenario.

If oil stays at current levels or moves lower, inflation will stay elevated but remain under control. It means that Fed will not be as hawkish as feared.

Thus, gold traders will shift their attention from inflation risks to central banks' purchases. Investment demand will grow, pushing gold prices higher.

In the next few months, we'll see whether this scenario plays out.

Japan and US intervened to support the yen, pushing USD/JPY from 164 to 157. BoJ wants to push USD/JPY lower as weak yen boosts inflation at a time when the central bank does not want to raise rates. Why would US intervene to support the Japanese currency?

The answer is simple: US does not want to see a major seller in the Treasury market. Japan is the largest foreign holder of US debt. To raise cash for interventions, Japan must sell Treasuries. If Japan starts selling Treasuries, yields would go higher. The yield of 30-year Treasuries is near multi-decade highs, so Japan's sales may trigger a major sell-off.

Going forward, Japan would use the US Foreign and International Monetary Authorities (FIMA) Repo Facility to support the yen. This facility allows Japan to use Treasury holdings as collateral to access dollars instead of selling Treasuries at the open market.

In the near term, this move should relieve pressure from the Treasury market. In the longer-term, it would raise more questions about directing reserves to Treasuries - what's the point of having major reserves if you are discouraged to use them?

The yen remains fundamentally weak due to difference in interest rates between US and Japan, so the market will likely test whether Japan and US are determined to support the yen in the longer term.

The yield of 30yr Treasuries tested levels that were last seen back in 2007, climbing above the highs of 2023.

Back in 2023, Fed raised the rate to 5.5% to fight inflation. The rate has dropped to 3.75% but Treasury yields climbed above 2023 highs.

Bond traders worry about long-term sustainability of U.S. finances and react to problems posed by high oil prices and rising AI spending. Geopolitical tensions and AI revolution are inflationary, which means that Fed will be forced to raise rates to fight inflation.

Rising long-term yields present a serious problem due to the size of U.S. total debt. At this point, equity markets ignore this problem as traders are focused on AI. It is hard to predict when markets "notice" the dynamics of long-term yields, but traders should keep an eye on bond market dynamics as they may have a major impact on equities and the economy.

Once again, BoJ intervened to support the Japanese currency - a third major intervention in 2026. Previous interventions yielded no results as USD/JPY has consistently tested new highs.

Earlier, BoJ made several attempts to defend the 160.00 level. As it turned out, this task was unrealistic. Rising yields in the U.S. in combination with high oil prices put too much pressure on the Japanese currency.

This time, the Bank of Japan decided to defend the 164.00 level. The BoJ waited for Fed decision and comments from Fed Chair Warsh. U.S. dollar started to move lower, and then BoJ intervened. Obviously, the move was made in coordination with U.S., which views the weak yen as a problem.

At this point, the upside trend is not broken. Fundamentally, the Japanese yen remains weak. FedWatch Tool indicates that there is a 63.4% chance that Fed will raise rates by 25 bps at the next meeting, so the market continues to expect that Fed will be forced to start a new rate hike cycle.

If USD/JPY climbs back above the 160.00 level, it will head towards recent highs near the 164.00 level. Most likely, BoJ will need to intervene again in case it wants to break the current trend. It remains to be seen whether BoJ is ready for another intervention in the near term.

EUR/USD trading was rather dull in July. The situation may change soon as Fed will release its interest rate decision. Analysts expect that Fed will leave the interest rate unchanged, but FedWatch Tool shows that there is a 33.7% chance that the central bank will raise the rate by 25 bps.

It's hard to see Fed going against consensus at this meeting, but comments may be hawkish as oil prices have rallied again. Middle East supply disruptions may go on for weeks, so Fed will be forced to react.

Meanwhile, high oil prices put additional pressure on the European economy, serving as a negative catalyst for the euro. A combination of rising oil prices and hawkish comments from Warsh may push EUR/USD below the 1.1325 level, triggering a sell-off.

WTI oil suffered a sell-off as traders focused on U.S. - Iran negotiations. There were no attacks in the last three days, indicating that ongoing negotiations represented a serious attempt to reach a deal.

President Trump said that there was a good chance for a deal. It looks that U.S. is not ready to tolerate the closure of the Strait of Hormuz at a time when Strategic Petroleum Reserve has reached levels that were last seen back in early 80s. Meanwhile, Iran's economy is on life support, so the country cannot afford months of military action.

Once again, economic reasons are pushing both sides to the negotiation table. As a result, the bullish trend is broken. In case U.S. and Iran announce a temporary deal, oil markets can quickly get back to recent lows as traffic through the Strait of Hormuz would be restored quickly.

Surely, traders know that any deal would be temporary as negotiating positions of U.S. and Iran remain far away from each other and neither side has a decisive advantage. However, geopolitical premium will decline as the physical market will quickly move from deficit to surplus.

WTI oil keeps moving higher as traders focus on potential risks to oil tankers in the Bab al-Mandab Strait. Iran-backed Houthis have recently announced that they would impose maritime blockade on Saudi Arabian ports. Houthis have already sent messages to shipowners warning them about dangers of visiting Saudi Arabian ports.

Houthis have not attacked vessels yet, but such attacks would present serious risks to navigation as Bab al-Mandab Strait is extremely narrow. The potential closure of the Bab al-Mandab Strait would force Saudi Arabia to use the Suez channel, and tankers would go around Africa to ship oil to customers in Asia. This would be a logistical nightmare.

Not surprisingly, the upside trend stays strong. Short-term fundamentals are bullish as the Strait of Hormuz is closed again, while additional risks are rising. Unless U.S. and Iran get back to negotiations and the Strait of Hormuz is reopened, WTI oil could test the $90.00 level soon.

Gold moved higher after US CPI report, which showed that Inflation rate declined from 4.2% in May to 3.5% in June. Analysts expected that Inflation Rate would drop to 3.8%.

Lower-than-expected CPI data put pressure on Treasury yields and pushed U.S. dollar lower. Falling yields and weaker dollar are bullish for precious metals, so gold rebounded from weekly lows.

However, the general trend remains bearish. The market is worried that Fed will raise rates to fight inflation. Fed Chair Warsh has recently said that the report did not mean that Fed accomplished its mission.

The strong rally in the oil market also presents a problem for gold bulls. If oil prices stay at current levels or move higher, inflation risks would return.

To gain sustainable upside momentum, gold must get out of the current channel and move above the 50 MA at $4331.

WTI oil gained roughly 9% as traders reacted to recent developments in the Middle East. U.S. decided to impose naval blockade on Iranian ports. Houthis attacked Saudi Arabia. Iran is expected to offically drop the MoU with U.S. Put simply, the previous blockade of the Strait of Hormuz is back.

In case the situation does not de-escalate in the near term, we'll see oil at $90 soon. June brought temporarily relief to oil consumers, but they did not have enough time to build stockpiles. In fact, the market is in a worse situation compared to late February, when the war in the Middle East began.

The new blockade is a serious bullish catalyst for WTI oil, which breaks the previous downside trend.

The yield of 30yr Treasuries has once again climbed back above the important 5.00% level. This level has been tested in 2023, 2025, and 2026 - every time US government debt found buyers near 5.00%.

However, pullbacks in yields have become weaker as time went by. This time, it looks that support for US bond market is not as strong as it was back in 2023 at these levels.

Put simply, the market questions long-term sustainability of U.S. finances and starts demanding a premium. In case the yield of 30-year Treasuries starts moving towards 6.00%, a level that was last seen back in 2000, the US stock market may also face significant pressure.

WTI oil rebounded from multi-month lows amid escalation in the Middle East. President Trump said that the U.S. would strike Iran again and could resume the naval blockade of the country's ports.

The surprising escalation called short-sellers off guard. Market players prepared for potential supply glut, but the situation has changed in just a few days. The sanctions waiver for Iranian oil was called off. The flow of oil through the Strait of Hormuz would likely decline in the upcoming days. Is it enough to start a new rally?

At this point, we see a massive short squeeze, but it's too early to say whether real buyers are ready to return. Pre-war levels served as a strong support level for WTI oil, but it would need to climb above the $80.00 level to prove that traders are serious about a new rally. Most likely, such a move would demand strong catalysts, like the full closure of the Strait of Hormuz.

USD/JPY has quickly moved back above the key 162.00 level after the brief pullback, which was triggered by profit-taking.

Taking a look at the weekly chart, the upside trend stays strong. USD/JPY settled in the middle of the upside channel. RSI is in the moderate territory. Put simply, USD/JPY has a good chance to test new highs in the near term.

The only thing that prevents USD/JPY from moving faster is the risk of interventions from the BoJ. However, the Bank of Japan has limited itself to verbal interventions. This is not surprising as real interventions yielded no results in recent months.

Overall, it looks that USD/JPY may become the key topic in the forex market in the second half of 2026.