Treasury Buybacks Provide Long End Relief

• US Treasuries rallied after the Treasury doubled planned buybacks across the 10-30 year sector. The 30-year yield fell around 10bps, easing some of the term-premium pressure that had pushed long-dated yields to multi-year highs.
• Middle East tensions remained elevated, with little progress on reopening the Strait of Hormuz and fresh escalation involving Iran and the UAE. Brent rose 0.5% to US$91.5/bbl, keeping energy-driven inflation risks elevated.
• FOMC minutes retained a hawkish bias, with participants signalling further tightening may be needed if inflation stays sticky. Markets remain less convinced, with the implied year-end Fed funds rate around 3.85%.
• Alphabet raised A$5.5bn in Australia’s largest corporate bond deal, attracting around A$18bn of orders. Federal debt also crossed A$1 trillion, highlighting the continued deterioration in the budget and rising cost of servicing government debt.
• Australian wages rose 0.8% q/q and 3.2% y/y in Q2, matching expectations and marking the weakest annual growth since late 2024. Attention now turns to employment, with +12k jobs expected and unemployment holding at 4.4%, key inputs for the RBA’s labour-cost outlook.