Deutsche Bank August Review: August Risk Rally Accompanied by a Sharp Rise in Long-Term Yields - FJElite

August broke the recent pattern of late-summer weakness, with robust economic data helping push the S&P 500 and other equity indices to fresh records. At the same time, long-dated bond yields rose sharply across major markets, with the US 30-year reaching its highest since 2007, Germany’s 30-year its highest since 2011, and Japan’s 30-year a record high. Stronger growth expectations, persistent inflation concerns and renewed fiscal worries all contributed to the move, while the unresolved Strait of Hormuz situation added to inflation pressure.

Long-end yields pulled back somewhat toward month-end after the US Treasury unexpectedly announced it would at least double the size of buybacks for longer-dated Treasuries. The move helped lower yields but also intensified concerns around financial repression. Gold ended the month up 9.7%, while the dollar index fell 0.5%.