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[Quick Facts]

1. U.S. Treasury Secretary Yellen says Yen intervention is understandable if due to volatility.

2. IIF: Global debt hits a record $307 trillion.

3. U.S. 20-year Treasury yield hits a record high.

4. A 99% probability that the Fed will leave interest rates unchanged in September.

[News Details]

U.S. Treasury Secretary Yellen says Yen intervention is understandable if due to volatility

U.S. Treasury Secretary Janet Yellen said said any intervention by Japan to prop up the yen would be understandable if it were aimed at smoothing out volatility — not at affecting the level of the exchange rate, which may imply that Yellen will not prevent Japan from yen intervention. In recent weeks, Japanese officials have expressed growing concern about the weak yen which could hurt Japan's domestic purchasing power. The yen has been hovering near a 10-month low against the dollar.

IIF: Global debt hits a record $307 trillion

Global debt increased by $10 trillion in the first half of 2023, resuming its upward march as a share of the world economy after falling for close to two years as inflation surged, according to the Institute of International Finance (IIF). The organization said in a report released on Tuesday that global debt reached a record $307 trillion, an increase of a staggering $100 trillion over the past decade. The United States, Japan, Britain and France saw the biggest increases. The global debt-to-GDP ratio climbed to 336% from 334% at the end of last year, and the IIF expects it to reach 337% by the end of 2023, driven by large government budget deficits. But that's still below the 362% hit in the first quarter of 2021.

U.S. 20-year Treasury yield hits a record high

The Treasury Department announced that the $13 billion of 20-year bond auction drew a record high yield of 4.592%. The pre-issuance trading level was 4.595% at 1 p.m. EST. A round of selling in the market prior to the bid closure pushed yields slightly higher. Market reaction to the bid results was minimal, and the 20-year Treasury yield rose by about 2 basis points during the day. Primary dealers accounted for 9.3%, down from last time, while direct bidders jumped to 25.4% and indirect bidders fell to 65.4%. The bid-to-cover ratio was 2.74, compared with an average of 2.71 for the previous six bids.

A 99% probability that the Fed will leave interest rates unchanged in September

According to the CME FedWatch tool, the probability of the Federal Reserve maintaining interest rates unchanged at 5.25%-5.50% in September is 99%, and the probability of raising interest rates by 25 basis points is 1%; the probability of maintaining interest rates unchanged by November is 70.8%, and the probability of interest rate hikes by 25 basis points by November is 28.9%, and 50 basis points, 0.3%.

[Focus of the Day]

UTC+8 14:00 Germany PPI MoM (Aug)

UTC+8 14:00 U.K. PPI MoM (Aug)

UTC+8 14:00 U.K. Retail Prices Index MoM (Aug)

UTC+8 22:30 U.S. EIA Weekly Crude Stocks

UTC+8 02:00 Next Day: The Federal Reserve publishes a summary of its interest rate decision and economic forecasts

UTC+8 02:30 Next Day: The final trading of NYMEX New York crude oil October futures on the floor will be completed

UTC+8 02:30 Next Day: Federal Reserve Chairman Jerome Powell holds a monetary policy press conference