1. US Treasuries Remain the Key Market Risk

The US Treasury’s move to increase long-term Treasury buybacks initially provided some relief to markets, but the impact did not last. The US 10-year Treasury yield rose to around 4.71%, while the 30-year yield climbed to 5.25%. This remains a key risk, particularly for high-valued technology stocks.

The critical point is:

It is difficult to expect a strong and sustainable rally in equities without a decline in Treasury yields.

High long-term yields:

• Pressure technology stock valuations,
• Increase corporate financing costs,
• Raise mortgage and consumer borrowing costs,
• Encourage capital outflows from emerging markets.

Therefore, if today’s US PMI data comes in below expectations, we could see a downward reaction in Treasury yields and the dollar, while gold and equities could initially benefit.

However, if PMI data remains strong and price indicators stay elevated, Treasury yields could resume their upward move.

2. US PMI Data Is Key Today

The services PMI will be the key indicator to watch.

A reading:

Below 53.9 → Economic slowdown → Less tightening pressure on the Fed → Lower Treasury yields → Support for gold and technology stocks.

Around 53.9 → Neutral for markets.

Above 54.5 → Strong US economy → Higher Treasury yields → Pressure on technology stocks → Potential dollar recovery.

The prices paid/pricing pressure sub-index will be even more important.

If PMI remains strong while price pressures decline, markets could react positively. However, if both activity and prices remain strong, concerns that the Fed may keep rates higher for longer could return.

3. Recovery Signals Strengthen in Europe

Germany’s PMI data is particularly important for the European outlook.

Expectations:

• Manufacturing: 52.5
• Services: 50.0

The services PMI approaching the 50 threshold is particularly significant.

Above 50: Economic expansion
Below 50: Contraction

Therefore, a German services PMI above 50 could strengthen expectations of a recovery in the European economy.

For the Eurozone:

• Manufacturing: 52.0
• Services: 51.5

are expected.

If these figures are achieved, the scenario of a moderate economic recovery would strengthen.

However, production is recovering while new orders and exports remain relatively weak.

Therefore, the European recovery should currently be viewed as gradual normalization rather than strong growth.

A stronger-than-expected European PMI could trigger:

EUR higher / European equities higher / Bond yields higher

4. Strong UK PMI Could Reduce Rate-Cut Expectations

UK expectations:

• Manufacturing: 51.8
• Services: 52.0

A services PMI around 52 would indicate that the UK economy remains resilient.

However, strong data could be interpreted differently by the Bank of England.

Strong PMI → Strong economic activity → Continued inflation risk → Lower rate-cut expectations.

Therefore, stronger UK data would not automatically be positive for equities.

5. Oil: The Strait of Hormuz Remains the Key Risk

The biggest risk factor for global markets today and next week is oil.

Brent is currently around $93.8, while WTI is around $86.8. Brent has gained more than 7% over the past five trading sessions.

The US preparing its toughest-ever economic sanctions against Iran and the continuation of the naval blockade are keeping geopolitical risk elevated.

The key contradiction is:

Stronger US economic sanctions → Higher risk to oil supply → Higher oil prices.

However, Bessent has also suggested that increased economic pressure could reduce the need for a new major military operation.

Therefore, the details of the sanctions to be announced on Monday will be critical for oil markets.

Oil Scenarios

Brent above $90:
Upside risks remain.

Above $95:
The psychological $100 level could come back into focus.

Below $90:
A reduction in the geopolitical risk premium could begin.

Below $85:
Markets could start pricing out the Strait of Hormuz risk more significantly.

6. Gold: One of the Strongest Markets Globally

Three factors are supporting gold simultaneously:

Weak dollar + geopolitical risk + concerns surrounding the Treasury market.

Gold is heading for a weekly gain of around 3.1% and its third consecutive weekly increase.

Normally, rising Treasury yields are negative for gold.

However, markets are currently pricing in:

“Higher financial uncertainty due to US long-term borrowing costs and geopolitical risks.”

As a result, gold is being supported not only by Fed expectations but also as a portfolio hedge.

The primary trend in gold remains bullish.

However, given the speed of the recent rally, short-term profit-taking should be considered normal.

7. A Weak Dollar Remains Important

The Dollar Index is trading near its lowest levels since mid-May.

The market is behaving somewhat differently from the usual pattern.

Normally:

Iran risk → Safe-haven demand → Dollar higher

But currently:

Iran risk + US fiscal concerns + high US debt → Concerns over the dollar

As a result, gold is benefiting not only from geopolitical risks but also from dollar weakness.

8. Key Threshold for US Equities: Treasury Yields

The recent decline in US equities is not only about corporate earnings.

The main problem is:

“High rates + high oil prices + high valuations.”

In the latest session, the S&P 500 fell around 0.9%, while the Nasdaq declined approximately 1.3%.

The risk is particularly high for the Nasdaq because higher interest rates increase the discount applied to future cash flows.

Key Levels

US 10Y < 4.60%
→ Technology stocks could recover.

4.60–4.75%
→ Volatile market.

Above 4.75%
→ Renewed pressure on the Nasdaq.

Move toward 5.00%
→ Significant negative signal for global risk appetite.

9. Asian Markets: Mixed but Weekly Performance Remains Weak

Today’s picture is mixed:

• Nikkei: approximately -0.8%
• KOSPI: approximately +0.9%
• Hang Seng: approximately +0.7%

However, weekly performance remains weak across much of Asia. The Nikkei’s weekly loss is around 4.4%.

In Japan, rising inflation is also strengthening expectations that the BOJ could raise interest rates.

This creates upward pressure on Japanese bond yields and can periodically weigh on Japanese equities.

Global Market Scenario for Today

Main Scenario

Today’s market direction will be determined less by PMI data alone and more by the combination of “PMI + US Treasury yields + oil.”

The most positive combination would be:

Weak US PMI + lower price pressures + falling US 10Y yield + Brent below $90

This could trigger a strong reaction in Nasdaq, S&P 500, gold and emerging-market equities.

The most negative combination would be:

Strong US PMI + elevated price pressures + 10Y above 4.75% + Brent moving above $95

In this scenario, the likelihood of selling in global equities, a stronger dollar and higher Treasury yields would increase.

Key Issue for Next Week

The details of Bessent’s Iran sanctions plan on Monday, August 25, could become even more important than the PMI data.

The scope of the sanctions, particularly the extent to which they restrict Iranian oil flows to countries such as China and India, could determine whether Brent moves toward the $100 level.

Overall: Global markets are currently in a selective risk-taking environment rather than a broad risk-on mode. Gold is strong, oil is strong and the dollar is weak, while long-term Treasury yields remain elevated. As long as this combination persists, gains in equities are more likely to be volatile and driven by short-term rebounds.

2. OVERSEAS MARKETS — COMMODITIES ANALYSIS

Oil and Natural Gas

Oil: Upside Trend Remains Intact

The main themes in the oil market remain geopolitical risks and supply security. Prices approaching one-month highs indicate that markets are once again pricing in Middle East-related supply risks.

The US preparing to expand sanctions against Iran and the continuation of the naval blockade are increasing concerns over Iranian oil reaching global markets. As a result, short-term pullbacks in oil prices are likely to attract buying interest.

• Primary trend: Positive
• Risk: A de-escalation in Iran-related developments could trigger a sharp decline.
• Upside catalyst: Stronger sanctions or supply disruptions.
• Downside catalyst: Diplomatic resolution or weaker global demand.

Conclusion: Brent and WTI remain positive in the short term, although investors should remain cautious about profit-taking at current levels.

Natural Gas: Supply Surplus Limits Upside

Higher electricity-generation demand due to hot weather has supported US natural gas prices, but the market’s main issue remains high production and elevated inventories.

Inventories remain well above the five-year average, making it difficult for price gains to become sustainable. Today’s EIA inventory report is therefore important for natural gas.

Conclusion: Natural gas does not have a story as strong as oil. A larger-than-expected inventory build could increase selling pressure, while a smaller build could provide renewed support.

Metals

Gold: Consolidating Within a Strong Uptrend

The cautious performance in gold and silver following the recent rally can currently be viewed as profit-taking rather than a trend reversal.

Measures aimed at increasing liquidity in the long-term US Treasury market are putting pressure on the dollar and supporting precious metals. However, Treasury yields and the direction of the dollar remain critical for gold’s short-term performance.

Gold outlook:

• Primary trend: Positive
• Short-term status: Consolidation
• Support: Previous breakout areas
• Resistance: Recent highs
• Strategy: Gradual buying on pullbacks is healthier.

Silver: More Volatile Than Gold

Higher volatility in silver compared with gold is normal. In addition to its precious-metal characteristics, silver also has industrial uses, making it sensitive to both the dollar and global growth expectations.

The primary trend for gold and silver remains positive, although sideways and volatile trading could continue in the short term.

Conclusion: Silver retains upside potential, but position sizing should be more conservative than with gold.

Copper: Weakness Continues

Easing supply constraints are putting pressure on copper prices. China and global industrial demand expectations are also important factors.

For copper to regain strength, the following would be required:

1. A recovery in Chinese demand,
2. Stronger industrial activity,
3. An end to the easing on the supply side.

Conclusion: The short-term outlook for copper remains neutral to negative.

Platinum and Palladium: Positive but Fragile

Dollar weakness is supporting platinum and palladium. However, sustaining the rally depends not only on the dollar but also on the automotive sector and industrial demand.

Conclusion: The short-term outlook remains positive, but the structure is more fragile compared with gold and silver.

Aluminium: Under Pressure

Expectations of a normalization in production activity in the Middle East are reducing supply concerns.

As a result, aluminium currently has a weaker outlook compared with several other metals.

Conclusion: Unless supply concerns return, upside moves are likely to remain limited.

Agricultural Commodities

Soybeans: Positive Outlook

Three key factors are supporting soybeans:

• High oil prices,
• Increased soybean processing activity,
• Weather concerns surrounding the US crop.

If weather conditions negatively affect production expectations, the upside move could accelerate.

Outlook: Positive.

Wheat: Supported by Geopolitical Risks

Uncertainty surrounding export flows from the Black Sea region remains one of the key supports for wheat prices.

Since Black Sea supply is critical to global wheat markets, any expected disruption to exports could quickly push prices higher.

Outlook: Positive / High upside risks.

Coffee: Correction After Rally

A weaker-than-expected harvest in Brazil and declining inventories previously supported coffee prices. However, the recent selling appears to be a technical correction following the rally.

The key point is that the underlying supply problems have not disappeared.

Outlook: Positive medium term, with correction risk in the short term.

Cotton: Profit-Taking

Adverse weather conditions in the US, India and Brazil, together with higher oil prices, had supported cotton.

However, the recent selling is technically normal following the rally.

Outlook: Neutral to positive. Stronger weather-related support is needed for another sustained move higher.

Sugar: Positive

Expectations of lower global supply remain the main support for sugar prices.

Higher oil prices can also indirectly support sugar, particularly through the relationship between sugar and biofuel production.

Outlook: Positive.

Cocoa: Range-Bound

Cocoa is diverging from other agricultural commodities. The market is currently searching for a clear direction.

A breakout from the current consolidation range could signal the beginning of a new trend.

Outlook: Neutral / Sideways.

Corn: Positive Support Remains

Higher oil prices are providing important support for corn. The connection with energy and biofuel markets can also support upside moves.

However, weather conditions and US crop data remain the key fundamental drivers.

Outlook: Positive.

General Outlook

Key Takeaway

The strongest outlook: Oil, Gold, Silver, Wheat and Soybeans

Positive but volatile: Platinum, Palladium, Sugar and Corn

Weaker group: Copper, Aluminium and Natural Gas

The simultaneous strength of oil, gold and silver indicates that markets are pricing both geopolitical risks and uncertainty surrounding the dollar and Treasury markets. Therefore, the two most important themes for commodities today are developments surrounding the Middle East/Iran and US natural gas inventories.