U.S. Treasuries Face Weak Demand, Undermining Market Confidence

Market Overview

On Wednesday, the U.S. dollar extended its slide, falling below the critical 100 threshold as concerns grew over the Trump administrations tax cut and spending proposals. Weak demand in the 20-year Treasury auction further pressured sentiment. The U.S. Dollar Index ended the day down 0.42% at 99.60.

Spot gold began climbing during the European session and gained momentum in U.S. trading, finishing up 0.78% at $3,315.64 per ounce—its highest level in nearly a week. Spot silver rose 0.94% to settle at $33.38 per ounce.

WTI crude opened sharply higher amid heightened tensions in the Middle East and uncertainty surrounding Iran's nuclear agreement, surging nearly 2% intraday before reversing gains and closing down 1.49% at $61.20 per barrel. Brent crude also retreated, losing 1.31% to close at $64.16 per barrel.

Hot Topics to Watch

● Weak 20-Year Treasury Auction Pushes Yields Above 5%

Wednesday‘s auction of U.S. 20-year bonds was among the weakest since the tenor’s inception five years ago—though not as disastrous as Japans earlier 20-year auction this week. The disappointing results weighed on equities, bonds, and cryptocurrencies alike.

● EU Calls U.S. Trade Proposals Unrealistic, Floats New Deal Terms

The European Union reportedly presented a counterproposal to the U.S., aiming to gradually eliminate tariffs on non-sensitive agricultural and industrial goods. It also proposed reciprocal investment initiatives in energy, AI, and digital infrastructure, along with joint efforts to address overcapacity in sectors such as steel and automobiles. While the EU seeks a balanced, mutually beneficial agreement, both sides remain in exploratory talks.

Key Events to Watch (GMT+8)

• 20:30 Initial Jobless Claims (weekly, ending May 17)

• 21:45 S&P Global Manufacturing PMI (May, preliminary)

• 22:00 Existing Home Sales (April, annualized)

• 22:30 EIA Natural Gas Storage (weekly, ending May 16)

• Overnight (02:00) FOMC permanent voter and New York Fed President John Williams delivers a keynote speech at the Monetary Policy Implementation Conference