Morning Brew August 21 2026

Good morning.           

The bond market is back at the centre of the story. The 30-year U.S. Treasury yield rose more than 7 basis points on Thursday to as high as 5.27%, fully reversing Wednesday’s buyback-driven relief rally and moving back toward the 19-year high of 5.31% reached earlier this week. The 10-year yield rose to 4.69%, while the 1-year yield edged up to 3.98%. Scott Bessent tried to talk yields lower, but traders were not convinced.

Donald Trump also pushed for lower rates, arguing that the U.S. should have the lowest borrowing costs if it is the world’s strongest power. He even pointed to Switzerland as an example, saying it made little sense that Swiss rates are lower than U.S. rates. Markets, however, are not pricing power. They are pricing debt, inflation risk and the credibility of the long end of the curve.

The debt story is also weighing on the U.S. dollar. EUR/USD is testing 1.17 for the first time since May, pushing the USD Index down to around 98.8. GBP/USD is near 1.3640, while USD/JPY remains above its 200-day moving average around 159.

Gold remains above its 200-day moving average and is back in the spotlight, with ETF inflows picking up again as traders return to the trade. Silver is around 69. Bitcoin also extended its recent move, trading near USD 74,000 and on track for a weekly gain of around 17%, which would be its strongest weekly performance in roughly two and a half years.

Equities were less comfortable with the move in yields. The S&P 500 fell 0.9% on Thursday to 7,641.16, its weakest session since late July, as higher oil prices and rising bond yields weighed on sentiment. The Nasdaq 100 dropped 0.7%, marking a fifth consecutive day of losses. CDS

Walmart was the clearest single-stock disappointment, falling almost 10% after reporting its slowest U.S. comparable-sales growth in six years and issuing guidance below expectations. Apple declined 1.8% and was one of the largest drags on the index, while Ross Stores rallied after hours after raising its full-year earnings outlook on stronger traffic.

Broadcom is in talks with a group of lenders to raise more than $60 billion in debt for an AI chip financing deal, Credit default Swaps are being traded at 114 up from 30 in March

Europe also remained heavy. The Stoxx 600 slipped another 0.1%, extending its losing streak to seven sessions, the longest since September 2023. The DAX fell 0.4% to 25,983, its lowest close since the end of July, while the FTSE 100 was little changed. LVMH weighed on the broader European index, and JD Sports Fashion was hit particularly hard after falling more than 14%.

One of the three crucial events next week will be Nvidia’s earnings release on 26 August. Ruben looked at the resilience of the business and made an important point: a moat can narrow without disappearing. Nvidia’s moat is getting attacked from multiple sides | Saxo Bank Switzerland

• Cerebras attacks Nvidia on inference speed, while Google pushes deeper into custom chips with Marvell.
• Hyperscalers increasingly want chips designed around specific workloads rather than one processor doing everything.
• Nvidia still has powerful software and networking advantages, but the AI chip market is becoming more specialised.

Brent crude jumped as much as 3.4% to nearly USD 95 a barrel after President Trump threatened Iran with “economic warfare”. The move later faded, but the message is clear: oil remains a geopolitical risk premium trade. Brent is above its 100-day moving average, and options markets are increasingly focused on the possibility of a renewed test of USD 100 if Hormuz disruption fears return.

In Japan core consumer inflation accelerated in July as companies passed on higher import costs from the weak yen and the U.S.-Iran conflict. That makes further Bank of Japan rate hikes more likely and has added pressure on equities. The Nikkei is down around 4% this week.

Today, global PMIs and overall sentiment will drive the session, but the bigger point is that we are heading into a very important week.

The key tests are U.S. inflation, Nvidia’s earnings and outlook, and the Jackson Hole summit, where traders will listen closely to how Kevin Warsh frames the Fed’s policy stance.

Bottom line: The US  want lower yields, but the combination of heavy debt, sticky inflation risk, oil uncertainty and a still-expensive AI trade means next week could decide whether this is just a correction or the start of a broader reset.

Trade carefully.

Friday, 21 August 2026

Macro: Japan CPI , UK Retail Sales Flash S&P Global manufacturing and services PMIs for the U.S., euro area and UK.

Monday, 24 August 2026
Macro: Light scheduled macro calendar; markets likely to focus on positioning ahead of U.S. housing data, durable goods, GDP, PCE and Jackson Hole later in the week.
Central banks / speakers: No major central-bank decision scheduled.
Corporate earnings:

Tuesday, 25 August 2026
Macro: DE GDP & IFO U.S. new home sales for July.
Central banks / speakers: No major central-bank decision scheduled.
Corporate earnings:

Wednesday, 26 August 2026
Macro: AU CPI, U.S. durable goods orders, Q2 GDP PCE inflation.
Central banks / speakers: No major central-bank decision scheduled.
Corporate earnings: Nvidia.

Thursday, 27 August 2026
Macro: U.S. initial jobless claims.
Central banks / speakers: Jackson Hole Economic Policy Symposium begins.
Corporate earnings:

Friday, 28 August 2026
Macro: KOF Indicator EU Consumer Confiddence, France CPI
Central banks / speakers: Jackson Hole Economic Policy Symposium continues.
Corporate earnings: