Global markets saw a rally as investors anticipate a U.S. interest rate cut. Political instability in Argentina, Japan, and France added to market uncertainty. Long-end sovereign bond markets have seen historic spikes in yields, while the U.S. Treasury issued a record $100 billion in ultra-short end securities.

Nasdaq hits a record high, while Argentina’s Merval plunges 13%. U.S. tech and consumer discretionary sectors outperform, while utilities and real estate fall. Argentina’s peso drops 6%, the U.S. dollar weakens, and oil and gold prices rise. Yields slide, U.S. curve bull flattens, and OPEC+ opts for a modest output hike.

Speculation arises over a potential 50 basis points rate cut by the Fed next week. Political turmoil in various countries affects financial markets. Gold continues its climb, reaching new highs. U.S. Treasury issues a record amount of ultra-short securities to reduce debt maturity profile and lower interest costs.

Concerns arise over the increased issuance of T-bills and potential rollover risk for the U.S. government. A possible decline in bank reserves and liquidity could lead to increased funding costs. Analysts warn of market volatility if reserves fall below a certain threshold. Increased issuance may become the new norm if demand remains strong.

Events to watch tomorrow include Australia consumer sentiment and Taiwan trade data. Bank of France Governor will speak, and U.S. will revise job growth figures. U.S. Treasury to auction $58 billion in 3-year notes. Sign up for daily market news updates. Opinions expressed are those of the author and do not reflect Reuters News.

Read more at Yahoo Finance: Fed approaches Easy Street, political pots boil