bonds

Eurozone government bond yields rose in the morning, with the yield on Germany's 10-year government bonds rising to 3.276%, a 15-year high. Deutsche Bank stated that rising oil prices, increasing inflation in the Eurozone, and the European Central Bank's hawkish stance are driving yields higher.

Virtu Financial, M1X Global, and Tradeweb have completed an on-chain repurchase transaction using the digital sovereign bond USDM1 issued by the Marshall Islands as collateral, with all settlements completed on the Canton Network within 10 minutes. The parties stated that this is the first case combining native-issued sovereign collateral with fully on-chain atomic settlement.USDM1 is a dollar-denominated sovereign bond issued on-chain by the Republic of the Marshall Islands, backed 1:1 by short-term U.S. Treasury securities, which continues to pay interest during the collateral period and is structured as a fully collateralized sovereign debt instrument under New York law. The bond is offered through the Tradeweb platform, with custodial services provided by Anchorage Digital, BitGo, and tZERO.Canton is a blockchain network designed for institutional finance, equipped with privacy and permission management features. Prior to this transaction, Tradeweb facilitated the real-time transfer of tokenized U.S. Treasury securities from Franklin Templeton to Virtu Financial on Canton in July. Since August, FalconX and Interstice have launched a cross-chain exchange engine connecting Canton with Ethereum, Solana, and Robinhood Chain, and World Liberty Financial has also natively issued the USD1 stablecoin on Canton.

The dollar assets of Bitcoin Treasury Company Strategy have reached $6.69 billion, nearly equivalent to its $6.75 billion outstanding convertible bonds, with the net leverage ratio dropping to nearly zero. Driven by ongoing buybacks and the rebound of Bitcoin prices to around $80,000, its preferred stock STRC has rebounded over 35% since the low in June, currently reported at $97.23, still below the $100 par value.Executive Chairman Michael Saylor stated that USD Cash has enhanced the company's digital credit capital framework, specifically for the general purposes of Bitcoin Treasury Company, including increasing BTC holdings, paying preferred stock dividends and interest, repurchasing MSTR/preferred stock, repaying convertible bonds, and increasing dollar reserves. In May, Strategy repurchased $1.5 billion of convertible bonds maturing in 2029 to alleviate its debt burden.Competitor Strive Asset Management eliminated all debt earlier this year, and its preferred stock SATA has rebounded to the $100 par value, with shares issued last week through an ATM program. Analysts pointed out that eliminating debt will strengthen STRC's position in the capital structure, but ongoing buybacks, ample dollar liquidity, and the rebound in Bitcoin prices may provide more direct support for the preferred stock to return to par value.

Market news indicates that SoftBank Group is in discussions with investment banks regarding a potential bond issuance of $10 billion to $20 billion to help refinance its investment in OpenAI.

According to the Nikkei, Japan's Financial Services Agency, Ministry of Finance, Bank of Japan, and financial institutions plan to establish a research group in the summer of 2026 to promote the construction of next-generation payment and settlement infrastructure based on blockchain (distributed ledger), with a specific preparation plan expected to be formed in early 2027.The plan initially focuses on government bonds and stock trading, aiming to achieve 24-hour instant settlement of funds and securities. The report notes that although there have been several blockchain financial application trials in the past, this is the first time the Japanese government and central bank have set a clear timeline for the actual implementation of related infrastructure.

Billionaire investor Stanley Druckenmiller stated that the decision by Besant to spend billions of dollars to buy back U.S. Treasuries is a wrong decision. He believes that the market aggregates information that no committee can possess, and prices are the way information is conveyed to decision-makers. Druckenmiller pointed out that the Treasury's attempt to influence the bond market lacks rationale, and the current financial environment is in a loose state.

Japan will issue 10-year and 30-year government bonds on September 1 and 3, respectively, and the market is closely watching their auction performance. Nomura Holdings strategist Andrew Ticehurst stated that if auction demand is weak, it could push up the yields of Japanese and U.S. government bonds, increasing market risk.

Japan's SoftBank Group plans to issue 1 trillion yen (approximately 6.29 billion USD) in seven-year corporate bonds aimed at individual investors. The bonds are tentatively set with a coupon rate range of 4.3% to 4.9%.This issuance will be the largest bond issuance in SoftBank's history, nearly double the previous record. SoftBank is expected to announce the final terms on September 4.

Regarding Besant's increased investment in U.S. Treasury buybacks, Bitwise CIO Matt Hougan stated, "When the government artificially suppresses long-term interest rates, it erodes the value of savings. Investors need to purchase hard assets to escape this predicament. Bitcoin is the fastest horse in this race."

Goldman Sachs is testing investor demand for an approximately $1.15 billion junk bond issuance, the proceeds of which will be used to build a data center leased to the AI cloud computing company CoreWeave.Insiders revealed that the project is located near Richmond, Virginia, and is being developed by PowerHouse Data Centers, a subsidiary of American Real Estate Partners, in collaboration with Chirisa Technology Parks, with expectations to enter the market as early as September. This financing comes at a time when investors are becoming more cautious about AI infrastructure debt. As the issuance of bonds related to AI data centers has increased this year, the market has begun to demand higher yields. CoreWeave previously supported a high-yield bond issuance for many data center developers through long-term lease agreements, but its speculative-grade credit rating has also raised financing costs.

AI computing power leasing company Nebius's stock price fell by 6%, and the company plans to issue $4.5 billion in convertible bonds to support the development of its artificial intelligence business.

According to Nikkei News, SoftBank Group is preparing to issue corporate bonds aimed at individual investors, with an issuance scale expected to be 1 trillion yen, which will become the largest corporate bond issuance for individual investors in Japanese corporate history.This move aims to utilize sources of funds such as Japanese personal savings against the backdrop of intensified global competition in artificial intelligence investment and rising funding demands. The bond has a term of 7 years, and the interest rate and other issuance conditions are expected to be determined in early September.

Eurozone government bond yields have joined the global fixed income asset sell-off. The yield on Germany's 10-year government bonds rose to 3.2478%, the highest level since May 2011; the yield on France's 10-year government bonds rose to 4.0954%, the highest level since November 2008.The market is concerned that the ongoing war in Iran may lead countries to increase spending, affecting fiscal conditions.

According to Bloomberg, Google's parent company Alphabet launched its first Australian dollar bond issuance on August 18, planning to raise approximately 5 billion Australian dollars (about 3.6 billion US dollars). The funds raised will be used to address the ongoing rise in AI infrastructure spending.This issuance is underwritten by institutions such as Australia and New Zealand Banking Group (ANZ), offering Australian dollar notes with four different maturities, with the longest term reaching 20 years.