Market Summary - August 20, 2026
On August 20, 2026, Asian stock markets showed positive performance, with most indices trading in the green. The Chinese Hang Seng index rose by 1.1%, the Japanese Nikkei 225 increased by 1.3%, and the Korean KOSPI surged by 5.9%. This upward trend in Asian markets was primarily driven by recent announcements from US Treasury Secretary Scott Bessent, which resulted in a significant drop in long-term bond yields and a weakening of the US dollar.
Key Market Drivers
The KOSPI's impressive performance was further supported by a notable 12% increase in SK Hynix shares, following the company's announcement of a substantial 40 trillion won (approximately $29 billion) share buyback plan. The plan includes the acquisition and cancellation of up to 24 million shares by November 19, 2026.
Treasury Department Actions
The Treasury Department's new program aims to:
- Double the maximum threshold for individual buyback operations from $2 billion to $4 billion.
- Focus on purchasing long-dated Treasury bonds to enhance liquidity.
- Commence on September 9 and remain effective until at least November 4, when new quarterly plans will be released.
Precious Metals
The decline in bond yields positively impacted gold prices, which rose by 4.4% the previous day. However, a slight correction was observed today, with gold prices down by 0.7%. Currently, gold is priced at approximately $4,490 per troy ounce, while silver is trading at $67.
Cryptocurrency Market
Major cryptocurrencies also saw significant gains, with Bitcoin climbing past $69,000. This surge was influenced by political pressure from Donald Trump, who is advocating for the passage of the CLARITY Act, coinciding with a meeting with industry representatives at the White House that reignited hopes for favorable regulations.
Currency Market
In the foreign exchange market, the trade-weighted dollar index fell by 0.9%, reaching its lowest level since May. The EUR/USD pair rose by 0.9%, approaching 1.17. This weakening of the dollar was attributed to the Treasury Department's actions, which, while not monetary easing, suggested an increased supply of dollars in the market.
Macroeconomic Insights
Attention is now on the minutes from the recent FOMC meeting, which revealed that many policymakers believe further monetary tightening may be necessary if inflation does not decrease. The committee remains divided on inflation prospects, with some members concerned about persistently high inflation levels.
Geopolitical Developments
Recent reports indicate that the US military has been operating a secure shipping corridor through the Strait of Hormuz, facilitating the export of oil. This operation reportedly allows for the export of approximately 10 million barrels of oil daily, with some nights seeing exports as high as 15-20 million barrels.
Energy Commodities
Despite the geopolitical developments, global oil and gas prices have remained stable. Brent crude oil is currently priced at over $92 per barrel, reflecting a 4% increase over the past week, while WTI crude is just under $85 per barrel. European gas prices have also risen by approximately 6%, with liquefied natural gas priced at around $63.50 per MWh on the Dutch TTF exchange.