The US Treasury Department To Double The Limit On Long‑Term Securities Buybacks

The US stock indices closed mixed on Wednesday. Losses in the artificial intelligence infrastructure sector and in banking stocks were offset by solid gains in other areas. By the end of the day, the Dow Jones Index (US30) rose by 0.22%. The S&P 500 Index (US500) increased by 0.21%. The Technology Index Nasdaq (US100) closed in the red on Tuesday at 1.33%. Support for the stock market came from the US Treasury Department’s decision to double the limit on long‑term securities buybacks for the next quarter. This measure is aimed at controlling the recent sharp rise in the cost of long‑term benchmark borrowing. Alongside expectations of monetary policy easing, the prospect of increased dollar liquidity also had a positive impact on equities. In addition, investors examined the FOMC meeting minutes, which confirmed that some committee members allow for the possibility of raising interest rates this year if inflationary pressure persists.

Bitcoin showed strong growth, gaining about 11% since the beginning of the week and approaching the 70,000‑dollar mark in mid‑August. The digital asset reached its highest levels since early June amid growing optimism regarding the easing of digital asset regulation in the United States. An additional impulse for the rally came from a massive wave of short‑position liquidations. In just one hour, traders lost more than 1 billion dollars in bitcoin short positions, and the total volume of liquidations in the digital‑asset market reached a record 2.7 billion dollars, which triggered an avalanche‑like acceleration of the upward movement. The announcement of doubling the volume of long‑term US Treasury buybacks led to a decline in their yields, improving overall conditions for risk assets. Against this backdrop, US spot bitcoin ETFs recorded net inflows of 517 million dollars, the highest figure since May.

European stock markets ended Wednesday’s session with slight declines under pressure from a sharp drop in the banking sector and the artificial intelligence segment. By the end of the day, Germany’s DAX (DE40) fell by 0.15%, France’s CAC 40 (FR40) closed with a gain of 0.32%, Spain’s IBEX 35 (ES35) declined by 0.44%, while the UK’s FTSE 100 (UK100) ended the trading session higher at 0.14%. Shares of European banks were in negative territory despite falling long‑term bond yields after the US Treasury’s decision to double its buyback program: BNP Paribas and ING shares fell by 2.4% each, while Santander, UniCredit, and Intesa Sanpaolo lost 1.3%.

Silver prices (XAG) rose to 65.5 dollars per ounce, reaching a two‑month high amid the US Treasury’s decision to double long‑term securities buybacks. This measure led to a sharp decline in long‑term Treasury yields, reducing the opportunity cost of holding non‑yielding precious metals. Additional support for prices came from strong industrial demand, particularly from the solar energy and power grid sectors, as indicated by a 62.5% year‑over‑year increase in silver imports to China, reaching 219,000 tons.

Oil prices (WTI) rose above 86 dollars per barrel on Wednesday, supported by a sharp escalation of geopolitical tensions in the Middle East and new threats of energy supply disruptions. The situation intensified after the UAE announced the suspension of financial and economic operations with Iran, accusing Tehran of launching ballistic missiles at its territory, while President Donald Trump confirmed the absence of any peace negotiations. Additional market concerns were triggered by logistical incidents: three China‑linked supertankers turned back while passing through a key waterway, and one vessel was reportedly struck by a projectile near the strait. Meanwhile, official data from the Energy Information Administration (EIA) recorded an increase in US commercial crude inventories by 4.4 million barrels last week, while distillate stocks fell by 1.5 million barrels, hitting monthly lows.

In Asia, by the end of the day, Japan’s Nikkei 225 (JP225) fell by 3.16%, China’s FTSE China 50 closed higher by 0.26%, Hong Kong’s Hang Seng (HK50) gained 0.09%, and Australia’s ASX 200 (AU200) closed Wednesday lower by 0.18%.

The Australian dollar (AUD) weakened slightly, falling below the 0.71‑dollar mark and retreating from its recent ten‑week high. Pressure on the national currency came from fresh macroeconomic data indicating a weaker labor market and reducing the likelihood of a near‑term resumption of the Reserve Bank of Australia’s (RBA) rate‑hike cycle. Total employment in the country fell by 15,800 people, fully offsetting the strong increase of 80,300 in June (the previous month’s figure was revised upward) and coming in worse than analysts’ expectations of growth.

The offshore yuan (CNY) strengthened on Thursday to around 6.72 per dollar, reaching its highest level since February 2023. The main driver behind the rise of Asian currencies remains the overall weakness of the US dollar. As for monetary policy, China’s central bank has kept its benchmark rates unchanged for the fifteenth consecutive month. The one‑year Loan Prime Rate (LPR) remains at 3.0%, while the five‑year rate is held at 3.5%, reflecting policymakers’ caution amid domestic and external economic uncertainty.

Bank Indonesia, at its meeting on August 18-19, left the key interest rate (BI‑Rate) unchanged at 5.75%, fully in line with analysts’ expectations. This decision was made as part of the course to maintain financial stability and protect the national currency amid persistent global volatility and geopolitical tensions in the Middle East. In addition, this meeting was the first for Destry Damayanti as acting head of the central bank following the unexpected resignation of Perry Warjiyo.

• S&P 500 (US500) 7,707.98 +16.22 (+0.21%)

• Dow Jones (US30) 53,463.05 +119.65 (+0.22%)

• DAX (DE40) 26,091.33 -37.03 (-0.14%)

• FTSE 100 (UK100) 10,743.35 +15.31 (+0.14%)

• USD Index 98.81 -0.85 (-0.85%)

News feed for: 2026.08.20

• Japan Trade Balance (m/m) at 02:50 (GMT+3) – JPY (MED)

• China PBoC Loan Prime Rate at 04:15 (GMT+3) – CHA50, HK50 (HIGH)

• Australia Unemployment Rate (m/m) at 04:30 (GMT+3) – AUD (HIGH)

• Sweden Riksbank Rate Decision at 10:30 (GMT+3) – SEK (HIGH)

• Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (GMT+3) – EUR (MED)

• US Initial Jobless Claims (w/w) at 15:30 (GMT+3) – USD (MED)

• US Natural Gas Storage (w/w) at 17:30 (GMT+3) – XNG (HIGH)