Asian Equities Rebound on US Buybacks; Oil Prices Rise on Hormuz Tensions; VIX Down 5.99%

Lead Asian equities rebounded today, with global bond yields retreating after the US Treasury announced expanded buybacks. Oil prices continued their climb amid ongoing geopolitical tensions in the Middle East and concerns over the Strait of Hormuz. The VIX fell by 5.99%. Session narrative Asian markets saw a rebound today, with equities generally higher as global bond yields pulled back. This followed the US Treasury's announcement of expanded buybacks across 10-, 20-, and 30-year debt, which eased sovereign yields across major Asian economies. The Indian rupee strengthened to around 95.62 per dollar after the dollar index fell and US Treasury yields eased amid planned $4 billion liquidity-support buybacks for longer-dated bonds. The Indonesian rupiah also firmed to below IDR 17,800 per U.S. dollar after Bank Indonesia held its key rate steady at 5.75%. In commodities, oil prices extended gains, with WTI crude up 0.22% to $84.58 and Brent crude up 0.29% to $91.89, driven by persistent concerns over shipping restrictions in the Strait of Hormuz. European natural gas prices also rose above €64 per MWh due to these supply concerns, while UK natural gas inched higher near 157p/therm. Geopolitical tensions remained a key theme, with Russia reporting strikes on Kyiv and surrounding areas overnight, and the Kyiv mayor stating that Russian air strikes killed 8 people and injured 33. South Korea's defense minister estimated North Korea possesses 80-120 warheads, adding to regional unease. Meanwhile, the Australian dollar slipped to around $0.71 after July employment data showed a drop of 15,800 and a rise in unemployment to 4.5%, reversing expectations for another RBA rate hike. Japan’s July trade balance widened to -634.5 billion yen, though exports to the EU rose 19.1% year/year. Cross-asset check Equity futures were mixed, with S&P futures up 0.13% and Nasdaq futures up 0.45%. The VIX declined by 5.99% to 14.89. In fixed income, the US 10-year yield was down 1.12% to 4.65%, and Long-duration Treasuries gained 1.59%. The US Dollar Index was down 0.01%, with USD/JPY up 0.25% to 158.504. EUR/USD was down 0.008% to 1.1681. In commodities, gold was up 0.11% to $4550.5, and silver surged 2.02% to $67.16. Copper was down 0.21% to $6.48, and natural gas was down 0.85% to $2.79. Themes & continuing stories Geopolitical tensions continue to dominate headlines, particularly the ongoing conflict in Ukraine with Russian air strikes reported in Kyiv, and the escalating situation in the Middle East impacting oil markets. Concerns over commodity supply, especially oil and natural gas due to the Strait of Hormuz restrictions, are driving price movements. Central bank policy remains a focus, with Bank Indonesia holding rates and the US Treasury's buyback announcement influencing bond yields globally. What’s ahead Traders will continue to monitor geopolitical developments in Ukraine and the Middle East. The impact of the US Treasury's expanded buybacks on global bond markets will be closely watched. Upcoming economic data releases and any further central bank communications will also be key for market direction.