Macroeconomics

US October nonfarm payrolls surged by 165,000, significantly exceeding the 65,000 forecast, while the unemployment rate unexpectedly dropped to 4.1% from 4.2%. Average hourly earnings also rose more than anticipated at 0.4% month-over-month and 3.1% year-over-year. This strong economic data reinforced market expectations for a potential Federal Reserve rate hike in December, with probabilities rising above 80%. Separately, the Bank of England raised its key interest rate by 25 basis points to 4.00%.

Major Stock Markets

Global stock markets presented a mixed picture, with US indices seeing a rebound in tech shares following a previous day's steep sell-off driven by AI regulation fears. The Nasdaq Composite rose 1.1% to 24579 and the S&P 500 gained 0.3% to 7377, while the Dow Jones Industrial Average fell down -0.5% to 51286. The PHLX Semiconductor Index notably surged 4.2% to 9390. In Asia, Hong Kong's Hang Seng Index fell down -1.3% to 24482, and mainland China's A-shares also saw broad gains, while South Korea's KOSPI index experienced a significant decline, down -6.0% to 5060, marking a record low since April 1, 2026. European equities largely closed lower.

Major Government Bonds

US Treasury yields climbed across the curve following the robust nonfarm payrolls report, as the data strengthened the case for the Federal Reserve to maintain a restrictive monetary policy. The benchmark 10-year Treasury yield rose 0.02 percentage points to 4.9%, and the 2-year Treasury yield, more sensitive to Fed policy, also increased to around 4.52%. This upward movement reflected increased investor certainty regarding potential future rate hikes.

Major Commodities

International crude oil prices saw mixed movements, with WTI crude falling down -0.2% to $90.4 per barrel and Brent crude surging over 4% to nearly $98 per barrel, driven by escalating geopolitical tensions in the Middle East, including reports of oil tanker attacks in the Strait of Hormuz. Conversely, gold prices pulled back, settling down -0.8% to $4079.5 after the stronger-than-expected US jobs data bolstered the dollar, which rose 0.8% to 102.3, and Treasury yields, diminishing the appeal of the non-yielding asset. Silver prices also saw a decline.

Highlight

The October job report revealed a significant increase in US nonfarm payrolls, with a monthly change of 165.0k, surpassing both the previous month's 60.0k and the forecasted 65.0k. The unemployment rate also showed improvement, dropping to 4.1% from the previous 4.2%, and coming in lower than the expected 4.2%.

Components

• Mining & Logging saw a slight decrease of -1.0k, improving from the previous -2.0k.
• Construction experienced a decline of -3.0k, a notable drop from the previous 16.0k.
• Manufacturing added 19.0k jobs, up from 13.0k previously.
• Wholesale Trade faced a decrease of -9.1k, reversing from an 8.1k increase.
• Transportation saw a significant rise, adding 24.8k jobs compared to 7.4k previously.
• Professional & Business Services surged with a 70.0k increase, up from 8.0k.
• Education & Health Services grew by 53.0k, more than doubling the previous 21.0k.
• Leisure & Hospitality experienced a decline of -13.0k, down from a 13.0k increase.
• Government employment increased by 6.0k, recovering from a previous decrease of -18.0k.
• Private Service added 144.0k jobs, a significant rise from 51.0k previously.

Macroeconomics

US initial jobless claims fell to 189,000, indicating continued labor market resilience, while Q3 non-farm productivity rose by a stronger-than-expected 3.6% and unit labor costs declined by 0.7%. The Bank of England, in its first hike since August 2023, raised its policy rate by 25 basis points to 4.00%, with one member advocating for a larger increase, highlighting persistent global inflation pressures. Federal Reserve officials continued to advocate for a gradual approach to interest rate adjustments.

Major Stock Markets

US major stock indices suffered a significant sell-off, with the Nasdaq plummeting down -5.5% to 24315, a record low since April 2026, into correction territory and the S&P 500 dropping down -4.4% to 7354, a record low since July 2026, marking their worst sessions since April 2025. The Philadelphia Semiconductor Index (SOX) plunged down -12.2% to 9011, a record low since April 2026, driven by investor concerns over potential increased regulation of artificial intelligence and data center build-out following the Democratic sweep in the US midterm elections. European markets were mixed to slightly lower, while Asian markets saw varied performance, with Hong Kong equities rising 3.7% to 24797 and South Korean and Taiwanese markets experiencing sharp declines, with the KOSPI Index down -5.3% to 5384, a record low since April 2026, and the TSEC Weighted Index down -3.2% to 41575, a record low since July 2026.

Major Government Bonds

Major government bonds rallied as investors sought safety amid the equity market turmoil. The US 10-year Treasury yield fell down -0.06 percentage points to 4.8%, while the 2-year Treasury yield declined by about 12 basis points to 4.47%. This flight to quality, alongside a re-evaluation of the Federal Reserve's policy path, led to lower yields across the curve, though the 2Y-10Y spread slightly widened. German 10-year Bund yields also saw a modest decrease, down -0.04 percentage points to 3.2%.

Major Commodities

Crude oil prices rebounded sharply after previous declines, with WTI crude rising 3.5% to $91.2 per barrel and Brent crude gaining 3.9% to $98.29 per barrel, fueled by renewed supply concerns stemming from Middle East geopolitical tensions and a re-evaluation of diplomatic prospects. Gold continued its upward trend, climbing 0.6% to $4097.9 per ounce, benefiting from safe-haven demand, a weaker US dollar, and falling Treasury yields.

Macroeconomics

The US labor market showed continued resilience as October US - ADP Nonfarm Employment increased by 86,000, surpassing the expected 70,000-75,000. However, the US - ISM Services Index eased to 54.5 from 54.9, with new orders declining but the employment index improving and prices paid remaining elevated at 73.0. In the Eurozone, October Eurozone - Harmonised Index of Consumer Prices [HICP] accelerated to a three-year high of 4.0% year-on-year, driven by a 20.8% rise in energy prices, though core HICP held steady at 2.5%, reinforcing expectations for further ECB tightening. The US trade deficit narrowed slightly to $105.0 billion in September.

Major Stock Markets

Major global stock markets surged following the US midterm elections, which saw Democrats gain control of both houses of Congress, reducing political uncertainty and easing concerns over fiscal expansion and Middle East conflict escalation. The Dow Jones Industrial Average soared 3.0% to 53356, the S&P 500 gained 1.6% to 7689, and the NASDAQ Composite Index rose 1.4% to 25737. European indices also rallied, with the Euro Stoxx 600 up 1.8%. The broad market rally saw strong performance in healthcare, low-price retail, and renewable energy sectors, while AI infrastructure, semiconductors, and defense stocks faced pressure due to potential regulatory shifts and de-escalation of geopolitical tensions.

Major Government Bonds

US Treasury yields declined across the curve as the market reacted to the US midterm election results, anticipating a more constrained fiscal policy environment and reduced inflation risk. The benchmark US - 10-Year Treasury Note Yield fell -0.07 percentage points to 4.9%, while the policy-sensitive US 2-year Treasury Note Yield dropped 6 basis points to 4.57%. European government bond yields followed suit, with the Germany 10-year Bond Yield decreasing by -0.02 percentage points to 3.3% and the UK 10-Year Government Bond Yield falling 13 basis points to 5.13%.

Major Commodities

Crude oil prices plunged dramatically, with WTI Crude Oil down -8.3% to $88.1 per barrel and Brent Crude Oil dropping 8.67% to $94.62 per barrel. This sharp decline was driven by expectations of a de-escalation in the US-Iran conflict following the Democratic sweep in Congress and President Trump's comments indicating no immediate plans to strike Iran. Concurrently, Gold rallied significantly, climbing 3.3% to $4072.2 per ounce, while Silver surged 4.94% to $52.24 per ounce, supported by a weaker US dollar and declining bond yields.

ISM Services PMI Overview

The Institute for Supply Management (ISM) reported that the Services Purchasing Managers' Index (PMI) for October registered at 54.5, slightly below the forecast of 54.8 and down from September's 54.9. Despite the decline, the index remains above the 50 mark, indicating expansion in the services sector for the 18th consecutive month since May 2025.

Components Details

• Business Activity: The index decreased to 53.8 from 56.5.
• New Orders: Dropped to 55.9 from 59.8.
• Employment: Increased to 51.4 from 50.1, showing improvement.
• Supplier Deliveries: Rose to 56.7 from 53.2, indicating slower deliveries.
• Inventory: Fell to 55.4 from 57.8.
• Prices: Slightly decreased to 73.0 from 74.0.
• Backlog of Orders: Increased to 58.0 from 56.6.
• New Export Orders: Significantly rose to 55.2 from 46.9.
• Imports: Increased to 54.2 from 52.9.
• Inventory Sentiment: Slightly increased to 52.1 from 51.7.

Employment Growth

The latest ADP Nonfarm Employment report for October shows a monthly change of 86,000 jobs, surpassing the forecast of 67,000 jobs. This figure remains consistent with the previous month's statistics.

Salary Trends

The median salary for job stayers and job changers remained steady on a year-over-year basis, with job stayers seeing a 3.0% increase and job changers experiencing a 4.8% rise.

Components Details

• Education and Health Services saw a significant decrease, with a change of 28,000 jobs compared to the previous 60,000.
• Financial Activities rebounded with a 15,000 job increase, up from a previous decrease of 20,000.
• Information sector saw a decline of 2,000 jobs, down from a previous increase of 7,000.
• Manufacturing reported a loss of 1,000 jobs, compared to a previous gain of 16,000.
• Natural Resources and Mining experienced a drop of 8,000 jobs, compared to a previous decrease of 1,000.
• Professional and Business Services reported a decline of 27,000 jobs, worsening from a previous decrease of 11,000.
• Trade, Transportation, and Utilities saw a notable increase of 39,000 jobs, recovering from a previous decrease of 7,000.

Macroeconomics

US September JOLTS job openings surged to 7.523 million, exceeding consensus and marking the highest level since May, with the quits rate rising to 2.1%. Factory orders also showed strength, increasing by 1.8% in September, surpassing expectations. Internationally, the Reserve Bank of Australia raised its cash rate by 25 basis points to 4.85% in a split 6-3 decision, reaching an 18-year high. China's central bank moved to increase the foreign currency deposit reserve requirement ratio by 2 percentage points to 6%. Meanwhile, US midterm elections were underway, and geopolitical tensions in the Middle East remained elevated, with reports of US strikes on Iranian targets alongside ongoing diplomatic efforts.

Major Stock Markets

US equities ended mixed, with the S&P 500 gaining 0.4% to 7569 and the Nasdaq Composite rising 0.8% to 25372, primarily driven by a rebound in AI and semiconductor-related stocks after recent weakness. However, the Dow Jones Industrial Average was down -0.4% to 51787, partly due to Apple's nearly 2% drop on concerns over services growth and gross margin pressures. European markets mostly closed lower, with the Euro Stoxx 50 down 0.51% and the UK FTSE 100 down -1.1% to 10638. Asian markets saw mixed performance, as the Hang Seng Index advanced 0.6% to 23526, while South Korea's Kospi experienced a notable decline, down -3.6% to 5649.

Major Government Bonds

US Treasury yields moved higher across the curve, with the benchmark 10-year yield increasing by 0.1 percentage points to 5.0% and the 2-year yield up 0.2 basis points to 4.635%. This upward movement was largely influenced by the stronger-than-expected JOLTS job openings report, which reinforced expectations for a resilient US economy and a potentially prolonged restrictive monetary policy by the Federal Reserve. Conversely, Australian government bond yields retreated following the Reserve Bank of Australia's rate hike decision, which included a split vote and dovish commentary, leading to a 7 basis point drop in the 3-year yield and a 5 basis point fall in the 10-year yield.

Major Commodities

Oil prices exhibited volatility throughout the day, ultimately settling mixed, with WTI crude rose 0.4% to $96.8 per barrel and Brent crude up 0.16% at $104.39 per barrel, as market sentiment oscillated between ongoing US-Iran diplomatic talks and reports of military actions. Gold prices were down -0.7% to $3940.2 per ounce, and silver fell 2.2% to $49.79 per ounce, both pressured by the strengthening US dollar and rising Treasury yields, which diminished the attractiveness of non-yielding precious metals.

Job Openings Increase

The U.S. JOLTS Job Openings for September reported a total of 7,523,000, surpassing both the previous month's figure of 7,190,000 and the forecasted 7,150,000. This indicates a stronger-than-expected demand for labor in the U.S. economy.

Job Openings Rate

The Job Openings Rate rose to 4.5% from the previous 4.3%, reflecting the increase in available positions across various sectors.

Components Details

• Quits Rate: The Quits Rate climbed to 2.1%, up from 1.9%, marking the highest level since March 2025. This suggests a growing confidence among workers to leave their jobs, possibly for better opportunities.
• Hires Rate: The Hires Rate edged up to 3.4% from 3.3%, indicating a slight increase in hiring activity.
• Layoffs Rate: The Layoffs Rate decreased to 1.0% from 1.1%, suggesting a decline in involuntary separations.

Macroeconomics

The U.S. manufacturing sector showed expansion as the October US - ISM Manufacturing PMI rose to 55.5, exceeding expectations of 54.6, though the prices paid component decreased to 75.2, indicating persistent cost pressures. However, U.S. construction spending unexpectedly dropped 1.9% month-on-month in September. Germany - Retail Sales for September declined 2.0% month-on-month, missing the expected 0.4% increase, suggesting uneven economic recovery. The U.S. Treasury also revised its Q4 borrowing estimate slightly lower to $618 billion.

Major Stock Markets

U.S. equities closed mixed, with the Dow Jones Industrial Average gaining 0.4% to 51984 while the S&P 500 fell -0.5% to 7541, a record low since August 3, 2026, and the NASDAQ Composite Index dropped -1.1% to 25164, a record low since July 31, 2026. Technology and semiconductor stocks were notably weaker due to ongoing concerns over AI-related financing and investment returns, though market breadth was positive with gains in non-essential consumer, financial, and raw materials sectors. European markets generally advanced, with the Stoxx 600 Index rising 0.4%, while Asian markets were mixed, seeing gains in Korea's South Korea - KOSPI Index by 2.2% to 5859 and China's Shanghai Stock Exchange Composite Index by 1.08%, but a decline in Japan's Japan Nikkei 225 Index by -0.3% to 63082.

Major Government Bonds

Major government bond yields moved lower as falling oil prices alleviated inflation concerns and spurred safe-haven demand. The US - 10-Year Treasury Note Yield decreased by -0.02 percentage points to settle around 4.9%, while the US 2-year Treasury Note Yield was approximately 4.59%. Similarly, the Germany 10-year Bond Yield fell -0.03 percentage points to 3.3%, and the UK 10-Year Government Bond Yield also saw a notable decline of 9 basis points.

Major Commodities

Crude oil prices experienced a sharp decline, with WTI Crude Oil plunging down -7.5% to $96.3 per barrel and Brent Crude Oil falling 7.6% to $104.77 per barrel. This significant drop was primarily driven by renewed hopes for diplomatic progress in the Middle East, including reports of potential US-Iran peace talks. Concurrently, Gold prices rebounded 1.5% to settle around $3,956.6 per ounce, supported by the weaker oil prices tempering inflation worries and a softer US Dollar Index, down -0.1% to 101.8, with Silver also rising 3.0-3.3%.

ISM Manufacturing PMI Overview

The Institute for Supply Management (ISM) reported that the Manufacturing Purchasing Managers' Index (PMI) for October rose to 55.5, surpassing both the previous month's figure of 54.5 and the forecast of 54.5. This indicates a stronger-than-expected expansion in the manufacturing sector.

Components Details

• Production: The production index reached 59.0, marking the highest level since December 2021, up from 56.7.
• Inventories: Inventories increased to 51.4 from 48.6, showing a significant rise.
• Price: The price index fell to 75.2 from 77.9, indicating a decrease in price pressures.
• Backlog of Orders: The backlog of orders index decreased to 54.6 from 56.4.
• Imports: Imports rose to 52.9 from 51.0, reflecting an increase in imported goods.

The data suggests robust growth in manufacturing activity, with production and inventories showing notable increases, while price pressures eased slightly.

Macroeconomics

The US economy demonstrated robust growth in the third quarter, with GDP expanding at an annualized rate of 3.4%, exceeding the 3.2% consensus forecast and accelerating from 2.2% in the second quarter. The Federal Reserve's preferred inflation gauge, September core PCE, rose to 3.1% year-on-year, in line with expectations. The FOMC held interest rates steady, with Chair Walsh acknowledging economic strength and reiterating commitment to the inflation target. Other positive US economic indicators included stronger-than-expected durable goods orders and consumer confidence, alongside initial jobless claims remaining near multi-decade lows. Globally, the European Central Bank maintained rates, with officials anticipating a December hike followed by a pause, while the Bank of Japan kept its benchmark rate at 1.25%.

Major Stock Markets

Major US equity indices closed significantly lower, with the Nasdaq plummeting -2.9% to 25437, the S&P 500 down -1.8% to 7580, and the Dow Jones Industrial Average declining -1.1% to 51770. The sell-off was predominantly driven by technology stocks, particularly those in the AI sector, as investor concerns mounted over massive AI buildout costs and the timeline for returns. Intel's nearly 29% slide after a weak outlook and Amazon's increased capital expenditure and negative free cash flow exemplified this trend, with the Philadelphia Semiconductor Index (SOX) dropping over -7.2% to a record low of 10689. Despite the headline index declines, market breadth was positive, with S&P 500 gainers outnumbering decliners, and small caps outperforming. Defensive sectors like Energy, Healthcare, Utilities, and Consumer Staples showed relative strength. European and Asian markets also saw mixed to negative performance.

Major Government Bonds

US Treasury bonds firmed, leading to a decline in yields across the curve. The 10-year Treasury yield dropped by -0.1 percentage points to 4.9%, while the 2-year yield fell by 7.5 basis points to 4.579%. This broader flight to safety contributed to global bond yields ending the month sharply lower. However, recent Treasury auctions for 2-year and 5-year notes saw generally poor reception, indicating some underlying demand concerns despite the overall yield decline.

Major Commodities

Precious metals experienced a brutal session, with December gold tumbling -3.6% to settle at $3,884.9 per ounce, its lowest since October 3, 2025, and silver sharply lower by 5.93% to $49.28 per ounce, pressured by higher interest rate fears. Conversely, crude oil prices continued their upward trend, with WTI crude rising 0.9% to $102.9 per barrel and Brent crude increasing 2.4% to $117.64 per barrel, extending weekly gains amid ongoing geopolitical tensions in the Middle East. Bitcoin futures also saw weakness, declining -1.3% to $76,741.7 following news of a $6.3 billion hack on the Binance cryptocurrency exchange.

Market Highlights

The October MM Fundamental Index reports indicate significant shifts across major global markets. US stocks have experienced a downturn, with the latest stats at -0.21, marking the lowest level since June 2020. Taiwan and China stocks also hit their lowest levels since July 2024 and December 2024, respectively. Meanwhile, emerging market stocks dropped to their lowest since October 2024, with a latest stat of -1.64.

In the bond market, high yield bonds plummeted to their lowest level since April 2020, with a significant drop to -6.78. The US dollar surged to its highest level since August 2025, at 0.41, while the EUR fell to its lowest since November 2023, at -1.61.

Components Details

• US Stock: -0.21 (Lowest since June 2020)
• Taiwan Stock: 0.29 (Lowest since July 2024)
• China Stock: 1.06 (Lowest since December 2024)
• Emerging Market Stock: -1.64 (Lowest since October 2024)
• High Yield Bond: -6.78 (Lowest since April 2020)
• US Dollar: 0.41 (Highest since August 2025)
• EUR: -1.61 (Lowest since November 2023)
• Japanese Yen: -2.09 (Lowest since January 2025)
• Copper: 5.87 (Highest since April 2005)

Macroeconomics

The US economy showed robust growth in the third quarter, with GDP expanding at an annualized rate of 3.4%, surpassing the consensus expectation of 3.2% and accelerating from Q2's 2.2%. Inflation data indicated September core US - Personal Consumption Expenditure Price Index [PCE] rose 0.3% month-over-month, aligning with consensus, pushing the annual core PCE to 3.1%. The labor market remained tight, as weekly US - Initial & Continuing Jobless Claims came in at 194,000, below the 199,000 forecast, and US - Initial & Continuing Jobless Claims printed at 1.701 million, below the 1.72 million forecast. However, personal income growth of 0.2% and personal spending growth of 0.5% both slightly undershot forecasts. The European Central Bank (ECB) held its key interest rates unchanged, as expected, with President Lagarde announcing her early departure in February 2027.

Major Stock Markets

US equities were mostly lower, driven by a significant sell-off in technology stocks following earnings reports and concerns over AI investment returns. The NASDAQ Composite Index fell -1.4% to 26185, the S&P 500 declined -0.3% to 7720, and the Dow Jones Industrial Average was down -0.3% to 52343. Notably, Alphabet shares plummeted over 12% on search deceleration concerns, while Microsoft gave up early gains. Despite the tech weakness, market breadth was positive, with the equal-weight index outperforming and the iShares Russell 2000 ETF (IWM) small-cap index rising 1.01%. European major indices, however, mostly closed higher, while Asian markets presented a mixed picture, with Japan's Japan Nikkei 225 Index rose 1.1% to 64660 and Hong Kong's Hong Kong Hang Seng Index was down -0.6% to 22959.

Major Government Bonds

Major government bonds saw a rally, with US Treasuries firming and yields falling across the curve. The benchmark US - 10-Year Treasury Note Yield dropped down -0.12 percentage points to 4.9%, while the US 2-year Treasury Note Yield decreased by over 9 basis points to 4.61%. This move was partly attributed to haven demand amid the tech sector sell-off. The $44 billion 7-year note auction was well-received, indicating healthy demand. European bond markets also saw yields decline following the European Central Bank's decision to keep interest rates unchanged.

Major Commodities

In commodities, WTI Crude Oil settled flat at $102.8 per barrel, although it ended off session lows, reflecting choppy trading influenced by geopolitical headlines. Gold prices finished lower, declining down -0.5% to $4032.7 per ounce, while Silver also saw a notable drop of 2.4% to $53.15 per ounce.

US GDP Growth Surpasses Expectations

The US economy grew at an annualized rate of 3.4% in the third quarter, surpassing expectations of 3.2% and significantly higher than the previous quarter's 2.2%. On a year-over-year basis, GDP growth was reported at 2.1%, slightly down from the previous 2.2%.

Components Details

• Investment saw a substantial increase, with the latest stats at 19.4%, up from 4.6% in the previous quarter.
• Government Expenditures also rose significantly, recording a 5.3% increase compared to a -0.1% decline previously.
• Exports decreased by 5.7%, a notable drop from the previous 5.0% increase.
• Imports surged to 19.7%, up from 12.6% in the prior quarter.

Eurozone Economic Sentiment Indicator

The Eurozone Economic Sentiment Indicator for October recorded a figure of 96.9, falling short of both the previous and forecasted figures of 97.5. This decline indicates a weaker-than-expected economic outlook for the region.

Main Countries and Sectors Details

In Germany, the sentiment indicator dropped to 94.1 from 94.8, while France saw a slight increase to 96.1 from 96.0. Greece's indicator decreased to 106.9 from 107.6, and Spain also saw a decline to 105.1 from 105.6. Conversely, Italy experienced an increase, with the indicator rising to 100.2 from 99.4.

The Industrial Confidence Indicator improved to -3.4 from -3.9, marking the highest level since March 2023. However, the Services Confidence Indicator fell to 5.3 from 5.9. The Consumer Confidence Indicator also declined to -17.9 from -16.8, and the Retail Confidence Indicator dropped to -8.0 from -6.5. The Construction Confidence Indicator reached its lowest level since November 2020, decreasing to -5.9 from -5.3.

Macroeconomics

The US Federal Reserve maintained its benchmark interest rate at 3.75%-4.00% with a 10-2 vote, though Chair Warsh emphasized persistent inflation and tighter financial conditions. US initial jobless claims came in at 194,000, below the revised prior week's 200,000, while continuing claims rose to 1.738 million. Globally, the Bank of Canada increased its policy rate by 25 basis points, marking its first hike in over three years, while the Reserve Bank of New Zealand unexpectedly held its Official Cash Rate at 2.75%. European fiscal news included the UK budget providing 4.1 billion in cost-of-living relief and Italy approving a 26 billion budget that includes tax increases on financial and energy sectors.

Major Stock Markets

Major US stock indices extended their gains for a third straight session, with the S&P 500 rising 0.3% to 7744, the Dow Jones Industrial Average 0.2% to 52475, and the Nasdaq Composite 0.3% to 26550. The AI sector saw mixed reactions, with memory chip companies and Oracle surging on strong outlooks and earnings, while Google's shares declined significantly after hours due to disappointing quarterly results, contrasting with Microsoft's after-hours gain on robust cloud performance. European markets were largely flat to slightly positive, with the STOXX 600 gaining 0.07%, while Asian equities rallied significantly, led by a 6.6% jump in South Korea's Kospi index to 6012.

Major Government Bonds

US government bond yields were mixed, with the 10-year Treasury yield rising 0.03 percentage points to 5.0%, while the 2-year yield decreased by 3-4 basis points to around 4.70%-4.71%, leading to a steepening of the yield curve. In Europe, the German 10-year bund yield edged up 0.03 percentage points to 3.4%, while the UK 10-year gilt yield fell 3 basis points to 5.32%. Australian 3-year and 10-year yields both climbed 6 basis points following domestic data.

Major Commodities

Crude oil prices surged, with WTI settling up 2.2% at $102.1 per barrel and Brent rising to $115.32 per barrel, driven by escalating Middle East geopolitical tensions and a larger-than-expected draw of 1.9 million barrels in US crude inventories. Gold futures, however, rose, closing up 0.1% at $4,080.0 per ounce, while silver also declined by 1.5% to $53.67 per ounce.

Macroeconomics

US economic data showed resilience, with September durable goods orders increasing by 1.8% month-over-month and October consumer confidence rising to 91.7, its highest level since June. In contrast, French consumer confidence declined to 80 in October, marking its lowest point since June 2013. China's industrial profits grew by 14.4% year-over-year in September, while South Korea's Q3 GDP expanded by 3.4% year-over-year, exceeding forecasts.

Major Stock Markets

Major US stock indices closed higher, with the Nasdaq surging 1.2% to 26478 and the S&P 500 gaining 0.6% to 7723, largely driven by renewed optimism in AI-related technology stocks. The Dow Jones Industrial Average saw a minimal gain of 0.0% to 52378, constrained by a significant decline in Boeing. European markets were mixed, with the Euro Stoxx 600 up 0.5% and the German DAX rising 0.7% to 25591, while the UK FTSE 100 fell -0.8% to 10687. In Asia, the KOSPI and Nikkei 225 posted strong gains of 3.1% to 5638 and 1.7% to 63268 respectively, though Chinese equities, including the Hang Seng which declined -0.7% to 23041 and CSI 300 which declined -1.3% to 4050, saw declines.

Major Government Bonds

US Treasury yields remained unchanged, with the 10-year yield at 5.0% and the 2-year yield at 4.74%. In Europe, the German 10-year bond yield remained unchanged at 3.4%. A UK auction of 5-year government bonds saw yields climb to 5.036%, the highest since 2008, reflecting ongoing inflation and fiscal concerns.

Major Commodities

International oil prices declined as diplomatic efforts to de-escalate Middle East tensions progressed, with WTI crude down -1.6% to $100.1 per barrel and Brent crude dropping 1.7% to $113.88 per barrel. Gold prices rebounded, rising 0.9% to settle around $4,073.4 per ounce, while copper gained 2.4% and iron ore fell -1.0% to 664.5, marking its lowest point since September 24, 2024.

Macroeconomics

Macroeconomic data presented a mixed picture, with the US Dallas Fed manufacturing index rising to 13.4 in October from 9.8, and the Chicago Fed National Activity Index ticking up to +0.07 in September from -0.08, indicating continued economic activity. Conversely, the Eurozone's October Composite PMI preliminary value declined to 51.9 from 53.1, falling short of the 52.7 expectation and marking a four-month low, primarily due to a tightening financing environment as the ECB's corporate financing survey showed increased difficulty in obtaining bank loans. Meanwhile, Brazil's markets experienced a significant downturn following the unexpected re-election of President Lula.

Major Stock Markets

Major global stock markets largely advanced, driven by renewed optimism in artificial intelligence investments after Anthropic officially filed for an IPO. US equities closed higher, with the S&P 500 gaining 0.7% to 7677, the Nasdaq Composite rising 0.8% to 26169, and the Dow Jones Industrial Average up 0.3% to 52362. Semiconductor stocks were particularly strong, though Meta Platforms saw a slight decline of 1.9% after announcing plans to raise up to $95 billion for AI infrastructure, highlighting market concerns about financing. European markets also posted gains, with the Euro Stoxx 600 climbing 0.8%. In contrast, Brazilian markets plunged, with the small-cap index falling 30%, as investors reacted negatively to the presidential election outcome.

Major Government Bonds

Government bond markets saw varied movements, with the US 10-year Treasury yield remained steady at 5.0%, while the 2-year Treasury yield rose nearly 3 basis points to 4.72%, resulting in a flattening of the yield curve. This occurred ahead of the Federal Reserve's anticipated decision to hold interest rates steady. In Europe, the German 10-year Bund yield increased by 0.01 percentage points to 3.4%, but French 10-year government bond yields notably declined after Moody's affirmed France's sovereign credit rating, alleviating downgrade fears.

Major Commodities

Commodity markets were characterized by a retreat in oil prices as diplomatic efforts to de-escalate Middle East tensions gained traction. WTI crude oil fell down -1.9% to $101.4 per barrel, and Brent crude oil declined around 0.8% to $115.81 per barrel. Concurrently, safe-haven assets saw modest gains, with gold edging higher by 0.5% to $4029.7 and silver rising 0.7%.

Macroeconomics

US initial jobless claims dropped to 194,000, a three-month low. The US S&P Global October flash composite PMI slightly declined to 57.6, though manufacturing PMI rose to 56.0. Inflation concerns intensified as the University of Michigan's 1-year inflation outlook finalized at 4.7% and corporate selling price increases hit a four-year high. In Europe, the Eurozone's October composite PMI fell to 51.9, while France's 5-year CDS price breached 100 basis points, with its French 10-year government bond yields surpassing US Treasuries for the first time in 13 years.

Major Stock Markets

Major global stock markets were largely negative, with US indices closing mixed to lower amid concerns over the sustainability of the AI boom and funding. The Dow Jones Industrial Average fell -1.2% to 52215, the S&P 500 declined -0.5% to 7624, and the Nasdaq Composite was down -0.2% to 25955. Technology stocks experienced broad selling pressure, though the energy sector showed strength. European equities also closed lower, while Asian markets saw significant declines, with Hong Kong's Hang Seng index rising 0.7% to 23093 and mainland Chinese indices recording substantial losses.

Major Government Bonds

US Treasury yields edged higher, with the benchmark 10-year yield rising 0.04 percentage points to 5.0% and the 2-year yield increasing 4.21 basis points to 4.6818%. This followed a week that saw overall declines in yields. Notably, French 10-year government bond yields surpassed US Treasury yields for the first time in 13 years, reflecting broader European market concerns.

Major Commodities

International oil prices surged significantly, driven by escalating geopolitical tensions in the Middle East, including renewed US-Iran concerns and incidents in the Strait of Hormuz. WTI crude futures settled up 4.0% at $103.4 per barrel, reaching its highest level since May 2026. Conversely, precious metals continued their decline, with spot gold falling -1.2% to $4010.0 per ounce, reaching its lowest level since July 2026, and spot silver dropping 1.25% to $53.8897 per ounce, pressured by rising yields and a stronger dollar.

Eurozone PMI Overview

The latest Purchasing Managers' Index (PMI) reports for the Eurozone indicate a decline in both manufacturing and services sectors, falling short of market expectations. The Eurozone Manufacturing PMI recorded a value of 52.4, down from the previous 52.9 and below the forecast of 52.7. Similarly, the Eurozone Services PMI registered at 51.7, compared to the previous 53.0 and a forecast of 52.6. The Eurozone Composite PMI also saw a decrease, coming in at 51.9 from a previous 53.1.

European Countries PMI Details

In Germany, the Manufacturing PMI rose slightly to 54.2 from 53.9, while the Services PMI decreased to 51.7 from 52.9. In France, the Manufacturing PMI fell to 49.3 from 50.6, and the Services PMI dropped to 48.4 from 51.2. These figures highlight a mixed performance across major European economies, with notable declines in the French services sector.

Macroeconomics

US initial jobless claims fell to 194,000, below the prior week's 200,000 and consensus. However, continuing claims rose slightly to 1.738 million, exceeding consensus of 1.72 million. The Federal Reserve and European Central Bank entered their blackout periods ahead of upcoming policy meetings, with market pricing suggesting a low 13% probability of a Fed rate hike in October. Euro Area consumer confidence edged down from -16.8 to -17.9, and the Kansas City Fed manufacturing index declined from 14 to 11.

Major Stock Markets

Global equities experienced a broad risk-off move, primarily driven by a sharp sell-off in technology and AI-related stocks. The Nasdaq was the worst performer, tumbling -2.6%, while the S&P 500 fell -1.2%. The Dow Jones Industrial Average remained largely flat, supported by a rotation into more defensive sectors like utilities, consumer staples, and healthcare, alongside better performance in financials. Asian markets also saw declines, with China's CSI 300 entering a bear market, down -1.8%, and European indices closing lower.

Major Government Bonds

Government bond markets rallied significantly as investors sought safe haven assets. The U.S. 10-year Treasury yield was down -0.19 percentage points to 5.0%, falling below the 5% mark for the first time in a month. In contrast, parts of the European bond market experienced continued pressure, with French OATs yields rising 5-6 basis points, pushing the spread between French and German debt to nearly 1.8%, its highest level since the 2011 Eurozone debt crisis.

Major Commodities

International oil prices surged amidst escalating Middle East tensions, including drone attacks in Saudi Arabia. Brent crude climbed to $113 per barrel, its highest level since May, while WTI crude rose to $99.1 per barrel. Conversely, precious metals saw a sharp decline, with spot gold falling -2.6% and Silver dropping 4.7-5.85%, as higher oil prices fueled inflation concerns that could reinforce elevated interest rates.

Macroeconomics

Macroeconomic data showed the UK's September CPI annual rate rose from 3.1% to 3.5%, exceeding expectations, with core inflation also accelerating to 2.8%. In the US, September building permits were little changed at an annualized rate of 1.4 million, while housing starts declined modestly to 1.2 million, and the Pending Home Sales Index hit a record low of 66.0. Separately, the RBA Deputy Governor's hawkish comments on a "materially worse" inflation outlook led to a 0.3% rally in the Australian Dollar to 0.702.

Major Stock Markets

Major US equity markets closed higher, with the NASDAQ Composite Index leading gains at 1.0% to 26703, the S&P 500 advancing 0.6% to 7757, and the Dow Jones Industrial Average up 0.7% to 52856. This rally was primarily driven by strong AI-related corporate earnings, which boosted technology stocks and eased concerns about AI investment returns, though Netflix declined over 5% on a weaker outlook. European markets also saw broad gains, with the Stoxx 600 Index rising +0.9% and Germany's DAX up 1.4% to 25645, while Asian markets were mixed.

Major Government Bonds

US Treasury yields finished modestly higher, with the US - 10-Year Treasury Note Yield remained unchanged at 5.1% and the US 2-year Treasury Note Yield rising 3 basis points to 4.81%. A poorly received 20-year Treasury auction cleared at a record-high yield of 5.469%. In Europe, the Germany 10-year Bond Yield rose 0.02 percentage points to 3.4%, while the France - 10-Year Government Bond Yield briefly touched 5% for the first time since July 2002 amidst heightened fiscal uncertainty.

Major Commodities

Crude oil prices experienced volatility due to ongoing Middle East supply risks and developments in US-Iran diplomacy. WTI Crude Oil settled up 0.1% to $97.9 per barrel, while Brent Crude Oil closed marginally higher by 0.11% at $106.39 per barrel. Gold prices saw a modest increase of 0.3% to $4156.8 per ounce, while Silver remained largely unchanged, closing down 0.04% at $57.97 per ounce.

Highlight

The global Economic Expectation Index for October shows a slight increase, reaching 2.64% compared to the previous 2.63%.

Main Countries Details

In the United States, the index rose marginally to 2.17% from 2.16%. The Eurozone experienced a notable increase to 1.25%, marking the highest level since August 2022. The United Kingdom's index also reached a peak since October 2025, standing at 1.21% compared to 1.2% previously.

Germany's index rose to 1.13%, the highest since July 2022. Japan's index remained steady at 0.8%. China saw a slight decrease to 4.43%, the lowest since October 2025.

France and Italy both experienced declines, with France dropping to 0.74% from 0.8%, and Italy to 0.73% from 0.77%. Australia saw a slight decrease to 1.75% from 1.78%.

Taiwan's index decreased significantly to 6.1% from 6.52%. India saw a slight increase to 7.17% from 7.16%. Brazil's index fell to 1.57% from 1.68%, while Canada's rose to 1.58% from 1.52%.

Indonesia and Thailand saw minor decreases, with Indonesia at 5.03% from 5.05%, and Thailand at 2.08% from 2.09%. South Korea's index decreased to 2.67% from 2.72%. Singapore saw a slight increase to 3.53% from 3.52%, and Malaysia's index rose to 4.87% from 4.8%.

Macroeconomics

US private employers added an average of 18,500 jobs weekly (4 weeks ended Oct 3), down from 26,000, with unemployment at 4.2%. Housing starts in September fell to an annualized 1.22 million, below estimates of 1.30 million, while building permits held steady at 1.4 million, slightly above forecasts of 1.39 million. The US Pending Home Sales Index plunged 7.3% month-over-month to 66.0, marking a record low. In the UK, the ILO unemployment rate edged down to 4.7% in the three months to August, with employment growth strengthening to 102,000. The Euro Area ZEW survey of expectations declined to 18.5 in October. The Reserve Bank of Australia's Deputy Governor warned of a deteriorating inflation outlook, leading to a significant increase in the implied probability of a November rate hike above 40%. China's 1-year and 5-year Loan Prime Rates remained unchanged at 3.0% and 3.5% respectively for the 17th consecutive month.

Major Stock Markets

US equity markets closed mixed, with the Dow Jones Industrial Average rising 1.0% to 52496 and the S&P 500 gaining 0.3% to 7713, driven by broad strength across sectors and strong corporate earnings from traditional companies. However, the Nasdaq Composite was little changed at 26425 as heightened scrutiny over the substantial capital requirements and debt loads of AI-related companies, alongside a poor debut for a Korean data-center startup, weighed on the technology and semiconductor sectors. Elsewhere, Asian markets finished mixed to lower, with Korea's KOSPI notably down -3.7% to 5553, a record low, while European stocks were broadly lower amidst broader market concerns.

Major Government Bonds

US Treasury yields declined across longer maturities, with the benchmark 10-year yield falling -0.01 percentage points to 5.1%, as investors scaled back expectations for an immediate Fed rate hike, leading to a bull-flattening of the curve. The 2-year Treasury yield, however, saw a slight increase to 4.789%. In Europe, bond yields also eased, though the France-Germany 10-year spread widened to over 150 basis points amid concerns over French fiscal stability. Demand for longer-dated Japanese government bonds was strong at auction.

Major Commodities

Crude oil prices experienced significant volatility, with WTI initially dropping sharply on unconfirmed reports of a Middle East peace proposal, before paring losses after denials, ultimately closing down -0.4% at $98.1 per barrel. Brent crude similarly fluctuated, ending down 0.56% at $106.28 per barrel. In precious metals, spot gold declined -0.4% to $4144.1 per ounce, while silver rose 1.57% to $58 per ounce, and copper gained 1.2% to $6.6.

Macroeconomics

US housing sentiment hit a 14-year low in October, with the US - NAHB/Wells Fargo Housing Market Index [HMI] falling to 29 from 32 in September, reflecting pressures from high mortgage rates and costs. Meanwhile, China's economy showed signs of stabilization, with Q3 GDP growing 4.5% year-over-year and September retail sales increasing 1.1% year-over-year, though China - Fixed Asset Investment and China Real Estate Development Investment for the first nine months contracted by 7.2% and 20.6% respectively. Geopolitical tensions in Europe, particularly political unrest in France, and ongoing Middle East risks contributed to a cautious global sentiment.

Major Stock Markets

Major global stock markets presented a mixed picture, with US equities generally closing higher, led by a strong rebound in technology and AI-related shares. The NASDAQ Composite Index gained 1.1% to 26431 and the S&P 500 rose 0.4% to 7691, while the Dow Jones Industrial Average edged down -0.1% to 51966. This rally in tech followed a period of declines, with semiconductor stocks notably snapping an eight-day losing streak. Conversely, European markets experienced broad declines, with the Euro Stoxx 50 falling 0.96% and the France CAC 40 dropping down -1.1% to 7868, as political unrest in France weighed heavily on investor sentiment. Asian markets were varied, with South Korea - KOSPI Index rising 1.8% to 5768 and China CSI 300 Index up 0.1% to 4175, while Japan Nikkei 225 Index fell down -0.6% to 64917.

Major Government Bonds

Government bond yields rose globally, reflecting reduced safe-haven demand and renewed focus on corporate earnings. US Treasury yields were broadly higher across the curve, with the US - 10-Year Treasury Note Yield climbing 0.04 percentage points to approximately 5.1% and the US 2-year Treasury Note Yield increasing 6 basis points to around 4.77%. European government bonds experienced a notable sell-off, particularly French OATs, where the France - 10-Year Government Bond Yield surged by 13 basis points amid domestic political unrest, while Germany 10-year Bond Yield saw an increase of 0.04 percentage points to 3.5% and UK 10-Year Government Bond Yield also saw increases of 6 basis points respectively.

Major Commodities

Oil prices saw mixed movements, with US WTI Crude Oil Futures for the expiring November contract fell down -0.8% to $98.3 per barrel, while Brent Crude Oil slipped 0.28% to $109.55 per barrel, as traders weighed Middle East tensions against profit-taking. Gold prices fell down -0.5% to settle around $4,161.5 per ounce, pressured by a stronger US Dollar Index, which rose 0.1% to 102.0, and elevated Treasury yields. Meanwhile, Silver was little changed, Copper rose 0.8% to $6.6, and China - Iron Ore moved higher by 1.5% to $682.5.

Macroeconomics

U.S. industrial production increased 0.7% in September, surpassing forecasts of a 0.4% gain, with manufacturing output rising a more moderate 0.3%. Eurozone consumer price index (CPI) inflation rose to 3.8% in September, matching estimates. Meanwhile, U.S. September core CPI was 0.3% month-over-month, hotter than the 0.2% consensus, and core producer price index (PPI) also exceeded expectations. Despite these inflation prints, Fed Chair Warsh offered no hints on the upcoming rate decision, leading markets to scale back October rate hike odds to 16% from a peak of 55%, while the U.S. dollar fell down -0.3% to 101.8. The U.S. 2026 fiscal year deficit expanded to $1.99 trillion, with net interest expenses surpassing $1 trillion for the first time.

Major Stock Markets

Global equity markets saw a significant divergence, with U.S. indices closing lower, particularly technology-heavy benchmarks. The Nasdaq fell down -2.1% to 26140 for the day and recorded its worst weekly performance since June, while the S&P 500 declined down -1.1% to 7659. The Philadelphia Semiconductor Index fell down -3.8% to 11137, extending its losing streak to eight consecutive sessions, the longest since 2008, as concerns over AI financing, return on investment, and corporate debt burdens intensified, leading to a broad sell-off in semiconductor and AI-related stocks. In contrast, the Dow Jones Industrial Average posted a modest decline down -0.3% to 52002 for the day but managed a second consecutive weekly gain, while European and Asian markets generally advanced. A notable market rotation occurred, with the equal-weighted S&P 500 outperforming the cap-weighted index significantly, as investors shifted away from concentrated tech positions towards more defensive sectors like energy and utilities.

Major Government Bonds

U.S. Treasury bonds rallied strongly, marking their best week since mid-February, as a flight to safety driven by the tech sell-off and scaled-back Fed rate hike expectations boosted demand. The benchmark 10-year Treasury yield dropped by 14.6 basis points for the week, settling around 5.1%, its largest weekly decline since February, while the 2-year Treasury yield also fell by 5.5 basis points, settling around 4.734%. The yield curve bull flattened, reflecting reduced expectations for aggressive near-term monetary tightening.

Major Commodities

Crude oil prices surged significantly amid escalating geopolitical tensions in the Middle East and renewed attacks on energy infrastructure in the Russia-Ukraine conflict, pushing WTI crude up 3.9% to settle near $101.8 per barrel, and Brent crude reaching its highest closing level since May. Gold futures saw modest gains, up 0.4%, settling around $4186.7 per ounce, supported by a weaker U.S. dollar and safe-haven demand. The International Energy Agency announced plans to accelerate the release of 100 million barrels of crude oil from strategic reserves, including 20 million barrels of diesel, in an effort to stabilize energy markets.

Macroeconomics

US September Producer Price Index (PPI) surged, with the headline figure rising 1.3% month-on-month and 6.3% year-on-year, both exceeding expectations and marking a multi-year high. Retail sales also beat forecasts, increasing 0.8% month-on-month, though core figures excluding gasoline and autos showed a more modest 0.2% rise, suggesting a slowdown in underlying consumer spending. Initial jobless claims remained stable at 199,000. In Europe, August industrial production declined 0.5% month-on-month, while Australia's labor market unexpectedly weakened with a 39.3k job loss and the unemployment rate rising to 4.7%.

Major Stock Markets

Major US stock indices closed higher, with the Dow Jones gaining 1.1% to 52178 and the S&P 500 up 0.3% to 7744, as investors rotated out of technology and into defensive sectors like healthcare, financials, and materials. The Nasdaq Composite, after an early sell-off driven by concerns over AI investment sustainability and specific company reports, managed to pare losses and close marginally higher by 0.1% to 26713. European markets also saw broad gains, while Asian equities experienced sharp declines, notably South Korea's KOSPI plummeting down -7.6% to 5554, a record low, and Japan's Nikkei 225 falling down -4.9% to 64426, reflecting heightened sensitivity to the AI sector's volatility.

Major Government Bonds

Global government bond yields largely retreated, driven by a flight to safety amidst equity market volatility and AI financing concerns, despite hotter-than-expected US inflation data. The benchmark US 10-year Treasury yield fell significantly down -0.12 percentage points to close at 5.1%, while the 2-year yield also declined by 6 basis points to 4.74%. German 10-year Bund yields dropped down -0.06 percentage points to 3.4%, and Australian 10-year bond yields fell 10 basis points following weaker domestic labor market data.

Major Commodities

Crude oil prices diverged, with WTI futures climbing 2.5% to $97.5 per barrel, supported by a large draw in US crude inventories (8.557 million barrels) and escalating Middle East tensions, including reports of ship attacks and potential US strategic reserve releases. Brent crude, however, saw a slight decline of 0.1% to $104.04-$105.92 per barrel. Gold rallied 2.0% to settle around $4191.8 per ounce, benefiting from safe-haven demand and falling bond yields. Copper prices declined down -0.8% as broader risk sentiment weakened.

Retail Sales Overview

The latest US retail sales data for September showed a significant increase, with a month-on-month (MoM) growth of 0.77%, surpassing the forecast of 0.3%. This is a slight decrease from the previous month's 1.29% but still indicates robust consumer spending. Year-on-year (YoY), retail sales rose by 6.29%, up from 5.56% in the previous period.

Control Group Sales

The retail sales control group, which excludes certain volatile items, also showed a MoM increase of 0.77%, higher than the anticipated 0.3%. The YoY growth for the control group was 4.72%, marginally up from 4.7% previously.

Components Details

• Gasoline Stations: Experienced a significant YoY increase of 28.05%, up from 21.03%.
• Electronics Appliance: Saw a notable rise to 9.39% from 8.3% YoY.
• Furniture: Rebounded to a 4.85% increase from a previous decline of -0.41%.
• Health & Personal Care: Declined by -1.18% YoY, compared to -0.8% previously.
• Food & Drinking Services: Increased to 6.99% from 5.81% YoY.

These figures suggest strong consumer demand across various sectors, particularly in gasoline and electronics.

Macroeconomics

US September CPI data revealed persistent inflation pressures, with headline CPI rising 0.6% month-over-month and 3.7% year-over-year, while core CPI, excluding food and energy, increased 0.3% month-over-month and 2.6% year-over-year, both exceeding expectations. This reinforced market expectations for potential additional Federal Reserve rate hikes, with the probability of an October hike rising to around 32-35%. The Fed's Beige Book also indicated robust or intensifying price pressures across many districts, often linked to higher energy costs. In China, September CPI rose 0.9% year-over-year and PPI increased 5.0% year-over-year, while exports surged 36.3% year-over-year, and social financing and new RMB loans both saw significant increases.

Major Stock Markets

Major US stock indexes closed lower, driven by the hotter-than-expected inflation data and growing concerns over funding for AI infrastructure, which led to a broad sell-off in technology shares. The S&P 500 closed down -1.1% to 7719, the Nasdaq Composite closed down -1.9% to 26693, and the Dow Jones Industrial Average closed down -0.1% to 51622. Defensive sectors like healthcare and consumer staples outperformed, while growth sectors, including technology and communication services, lagged. European equities, however, largely bucked the trend, with the Euro Stoxx 50 gaining 0.4% and the UK FTSE 100 rising 0.7% to 10725. Asian markets were mixed, with some indices in China, including the Shanghai Shenzhen CSI 300 Index which closed down -1.4% to 4218, a record low, and South Korea's KOSPI Index which closed down -0.4% to 6009, lower.

Major Government Bonds

US Treasury yields experienced significant volatility following the release of the inflation report. Yields initially surged, with the 10-year Treasury yield briefly touching its highest levels of the year above 5.3%, as markets priced in increased odds of further Fed tightening. However, yields largely retraced these gains later in the session, with the 10-year Treasury yield ultimately falling down -0.03 percentage points to 5.2%, and the 2-year yield ending near flat around 4.80-4.82%.

Major Commodities

Oil prices finished modestly higher, with WTI crude settling up 1.0% at $95.1 per barrel and Brent crude rising 0.35% to $106.06 per barrel, primarily due to escalating Middle East tensions and reports of a strike at Saudi Aramco headquarters. Conversely, precious metals saw sharp declines as the US dollar strengthened, with the US Dollar Index rising 0.3% to 102.5, and expectations for higher interest rates increased; gold was down -1.3% to $4123.6 per ounce, and silver plummeted 5.98-6.1% to approximately $55.62-$55.88 per ounce.

Highlight

The latest Consumer Price Index (CPI) report for September shows an increase in inflation rates, surpassing forecasts. The US CPI (NSA, YoY) rose to 3.74%, higher than the previous 3.4% and the forecasted 3.6%. The CPI (SA, MoM) also increased to 0.65%, exceeding both the previous 0.4% and the expected 0.6%. Core CPI (NSA, YoY) reached 2.56%, above the previous 2.45% and the forecasted 2.5%. Similarly, Core CPI (SA, MoM) climbed to 0.33%, surpassing the previous 0.29% and the forecasted 0.2%.

Components

The Energy sector saw a significant rise, with a YoY increase of 20.35%, up from 16.05%. Transportation costs also surged, with a YoY increase of 7.77%, compared to the previous 5.97%. Medical Care Commodities experienced a notable decline, with a YoY decrease of -3.27%, down from -2.69%. Shelter costs rose to 3.22% from 3.03%, while Transportation Services increased to 2.77% from 2.46%. Other components such as Food & Beverages, Apparel, and Medical Care Services showed moderate changes in their respective YoY figures.

Macroeconomics

US private employers added an average of 24,750 jobs per week for the four weeks ended September 26, a modest slowdown from the previous report, while the unemployment rate held at 4.2%. Existing home sales unexpectedly rose 1.5% month-over-month to 3.99 million units in September. Federal Reserve President Williams indicated one more rate hike this year is appropriate, but no further tightening is expected in 2027, while Governor Waller noted rising long-term bond yields are already aiding demand suppression. The IMF slightly upgraded 2026 global GDP growth to 3.1%, warning of persistent risks from elevated energy prices and financial instability.

Major Stock Markets

Global equity markets experienced a mixed day, with US indices closing slightly lower as investors digested initial earnings reports and reassessed the AI trade. The S&P 500 closed at 7805, down -0.0%, the Dow Jones Industrial Average fell -0.4% to 51670, and the Nasdaq Composite declined -0.2% to 27204. Major US banks reported varied results, with several exceeding earnings estimates while one prominent institution missed on revenue. The technology sector, particularly semiconductors, underperformed significantly due to intensifying competition concerns and elevated valuations, leading to sharp declines in Asian markets, notably South Korea's KOSPI which plunged -5.5% to 6035. European equities also saw broad declines.

Major Government Bonds

US Treasury yields saw modest declines across most tenors, with the 10-year Treasury yield falling to 5.2%, influenced by Federal Reserve President Williams' comments suggesting a potential end to rate hikes in 2027. The 2-year Treasury yield, however, edged slightly higher. European government bonds faced pressure, with continued focus on France's sovereign bond turmoil as a potential contagion risk for European fixed income. Australian and other Asian government bond yields generally edged lower, reflecting a cautious market sentiment.

Major Commodities

Oil prices showed a mixed performance, with WTI crude extending gains, up 1.0%, to settle at $94.6 per barrel amid ongoing Middle East disruptions, including reports of attacks on shipping in the Strait of Hormuz and a strike on Saudi Aramco's headquarters. Brent crude, however, saw slight declines. Gold prices struggled for direction, closing marginally lower, down -0.1%, at $4184.7 per ounce, caught between inflation concerns and the US rate outlook. Industrial metals like copper saw mixed performance, with copper rising 0.5% to $6.7, while aluminum declined, reflecting broader market concerns tied to the AI trade and global economic outlook.

Highlight

The US JOLTS Job Openings for August reported a decrease to 7,079,000 from the previous 7,335,000. The Job Openings Rate slightly decreased to 4.3% from 4.4% in the previous period.

Components

The US JOLTS Quits Rate remained stable at 1.9%, showing no change from the previous month. The Hires Rate saw a slight increase to 3.3% from 3.2%. Meanwhile, the Layoffs Rate decreased to 1.0% from 1.1%.

Macroeconomics

A Federal Reserve official indicated that inflation is decelerating slowly and further monetary tightening might be necessary, favoring "smaller, more frequent policy adjustments." The US Dollar Index climbed 0.4% to 102.6, reaching a record high since April 10, 2025. No significant US economic data was released due to a holiday, but French fiscal concerns intensified, causing the spread between French and German 10-year government bond yields to widen to levels reminiscent of the European debt crisis.

Major Stock Markets

US equity markets closed mixed, with the S&P 500 down -0.1% to 7807 and the Nasdaq Composite down -0.4% to 27246, primarily weighed down by weakness in technology and semiconductor stocks. In contrast, the Dow Jones Industrial Average gained 0.4% to 51851, supported by energy and traditional industrial sectors. European markets generally advanced, with the Euro Stoxx 600 up 0.7%, while Asian markets showed divergence, as South Korea's Kospi dropped -3.7% to 6384 amid a tech sell-off, and Chinese A-shares also declined.

Major Government Bonds

US Treasury markets were closed for a holiday, leading to limited activity. In Europe, Germany's 10-year bond yield was down -0.01 percentage points to 3.5%, but French 10-year yields increased, reflecting heightened investor concerns over France's fiscal health and widening the yield spread against German bonds.

Major Commodities

Crude oil prices saw a significant rise, with WTI crude settling up 1.6% at $93.3 per barrel and Brent crude increasing 1.8% to $106.65 per barrel. This surge was primarily driven by escalating geopolitical tensions in the Middle East, including Houthi attacks on Saudi Arabia and reported Iranian actions in the Strait of Hormuz, alongside skepticism regarding a proposed Russia-Ukraine energy ceasefire. Gold prices declined -0.4% to $4,198.6 per ounce, pressured by a stronger US dollar, while industrial metals generally advanced.

Macroeconomics

US consumer sentiment declined in October, with the preliminary University of Michigan Consumer Sentiment Index falling to 46.3 from 48.1 in September, and the current conditions index hitting a record low of 44.7. Inflation expectations rose, with the 1-year outlook at 4.7% and the 5-year outlook at 3.5%. The US dollar continued its upward trend, marking its fourth consecutive week of gains, rising 0.1% to 102.2, while the Euro declined down -0.1% to 1.120 against the dollar for a fifth straight week. Fed officials reiterated the need for further rate hikes, though October tightening expectations faded slightly, and the US federal government's 2026 fiscal year budget deficit increased by 21% to nearly $2 trillion, reaching over 6% of GDP.

Major Stock Markets

Major US equity markets rebounded, with the S&P 500 gaining 0.6% to 7812, the Dow Jones Industrial Average rising 0.8% to 51655, and the Nasdaq Composite climbing 0.6% to 27366, closing the week near record highs. The S&P 500 had set a fresh record of 7,844.52 earlier in the week, and the Nasdaq achieved its fourth consecutive weekly gain. However, the Russell 2000 underperformed for the fifth straight week, reflecting weakness in small-cap stocks, while the AI trade saw mixed performance with some chipmakers lower but software strong. European markets also closed higher, though Asian markets generally saw declines.

Major Government Bonds

US government bond yields were volatile, with the benchmark 10-year Treasury yield ending the week up 0.01 percentage points to 5.2%, after briefly peaking at 5.3645% (the highest since April 2002) earlier in the week, and continuing its rising streak. The 2-year Treasury yield was around 4.79%. The yield curve steepened, and while some auctions were well-received, yields faced pressure from French fiscal concerns, AI financing needs, Middle East risks, and ongoing inflation worries. European bond markets, particularly French bonds, saw rising yields due to debt sustainability concerns.

Major Commodities

Crude oil prices experienced significant volatility, with WTI crude settling up 0.2% to $91.7 per barrel, and Brent crude at $104.72 per barrel (up 0.42%), driven by geopolitical tensions in the Middle East, including Iran's warnings and reports of US military preparations, as well as President Trump's announcement of a deal for Russia to supply millions of tons of diesel to the global market. Gold prices rallied, with December futures settling up 1.5% to $4,220.3 per ounce, breaking a two-week losing streak, while silver also saw strong gains.

Macroeconomics

The September Federal Reserve meeting minutes revealed unanimous support for the recent rate hike, with most officials anticipating one more increase by year-end. Fed governors Waller and Musalem reinforced the need for further tightening, though Waller noted flexibility in the timing of future hikes. Economic data showed US - Initial & Continuing Jobless Claims declined to 197,000, better than the 200,000 expected, indicating a resilient labor market, while US - Initial & Continuing Jobless Claims rose slightly to 1.72 million.

Major Stock Markets

US equity markets were mixed, with the Dow Jones Industrial Average edging up 0.1% to 51232, while the S&P 500 was down -0.5% to 7765 and the NASDAQ Composite Index was down -1.2% to 27193. The tech sector, particularly AI-related stocks and semiconductors, underperformed significantly after reports suggested OpenAI's annualized revenue was approaching $50 billion by September, falling short of previously circulated figures and raising concerns about AI investment returns. Major Asian and European markets also closed broadly lower, with some indices hitting record lows.

Major Government Bonds

US Treasury yields initially rose but then retreated, with the benchmark US - 10-Year Treasury Note Yield down -0.05 percentage points to settle at 5.2%. The 30-year Treasury yield also declined about 6 basis points to 5.60%, following strong demand at a $22 billion auction. This unwound some of the recent upward pressure, though yields remained near multi-decade highs, while the US Dollar Index was down -0.1% to 102.1 against most major currencies.

Major Commodities

WTI Crude Oil prices surged, settling up 3.2% at $91.1 per barrel, and Brent Crude Oil rose 4.1% to $104.28 per barrel. The rally was fueled by renewed concerns over Middle East supply disruptions, including increased attacks on shipping in the IMF - Strait of Hormuz - Daily Transit Calls & Transit Trade Volume, and the threat of Hurricane Isaias to US Gulf of Mexico production. Prices pared some gains after President Trump stated the US would not attack Iran before the midterm elections. Gold prices edged up 0.4% to $4,158.2 per ounce, recovering from a two-month low.

Macroeconomics

Fed September meeting minutes indicated broad support for the recent interest rate hike, with most officials foreseeing another hike by year-end, though reasons for tightening varied. The New York Fed's Survey of Consumer Expectations showed one-year inflation expectations rising to 3.9% in September, the highest since May 2023. India's central bank raised its policy repo rate by 25 basis points to 5.50%, its first hike in nearly four years. China's central bank continued its gold-buying streak for the 23rd consecutive month, adding 740,000 ounces in September. The International Energy Agency (IEA) supported accelerating the release of previously committed oil reserves, prioritizing diesel.

Major Stock Markets

U.S. equities closed lower, retreating from recent record highs, with the S&P 500 down -0.2% to 7802, the Nasdaq Composite down -0.2% to 27539, and the Dow Jones Industrial Average down -0.7% to 51180. The Russell 2000, representing small-cap names, saw a more significant decline of 1.31%. European markets also closed lower, notably the Euro Stoxx 50 down 1.47%, Germany's DAX down -1.3% to 25104, and France's CAC down -1.2% to 7769, reaching its lowest level since March 2026, as concerns over sovereign debt and political uncertainty weighed on sentiment. Asian markets were mostly weaker, with Japan's Nikkei 225 down -0.9% to 70036 and Hong Kong's Hang Seng Index down -0.6% to 24131.

Major Government Bonds

Global government bond yields generally moved higher, with the U.S. 10-year Treasury yield initially spiking to a 24-year high of 5.365% before retreating to close up 0.01 percentage points to 5.3% following a well-received $39 billion auction. The 2-year Treasury yield, sensitive to Fed policy, declined by about 3 basis points to 4.77%. In Europe, the French 10-year government bond yield rose by 0.11 percentage points, or 12 basis points, to 4.87%, reflecting ongoing fiscal concerns and political uncertainty. The U.S. Dollar Index (DXY) was up 0.4% to 102.3, reaching its highest level since April 2025, largely due to elevated U.S. yields and European weakness, with the Euro down -0.5% to 1.120 against the dollar, reaching its lowest level since May 2025.

Major Commodities

Oil prices eased after an initial rise, following the International Energy Agency's (IEA) support for accelerating the release of strategic oil reserves, particularly diesel. WTI crude futures settled down -0.6% to $88.9 per barrel, and Brent crude fell 0.38% to $100.20 per barrel. Gold prices declined, pressured by a stronger U.S. dollar and higher Treasury yields, down -1.2% to $4,136.2 per ounce, reaching a two-month low. Silver also saw a significant drop of 2.54%.

Macroeconomics

The U.S. International Trade in Goods & Services widened to $105.6 billion in August, marking its largest gap since March 2025, driven by record imports including US - Crude Oil Imports & Exports, Gold, and AI chips. Meanwhile, private employers in the U.S. added an average of 23,750 US - Nonfarm Payrolls over the past four weeks, the highest since June. In the Eurozone - Retail Sales, August retail sales saw a modest month-on-month increase of 0.1%, an improvement from the prior month but still below expectations, indicating continued mild consumer momentum.

Major Stock Markets

U.S. equity markets extended gains, with the S&P 500 rising 0.6% to close at a record high of 7819 and the NASDAQ Composite Index advancing 0.5% to a record high of 27600, as bond yields eased and oil prices stabilized. Leadership was broad-based across sectors, with significant contributions from technology and AI-related stocks, exemplified by Marvell's substantially raised revenue guidance and Constellation Energy's surge on a major nuclear power deal with Google. European markets also closed higher, with the Euro Stoxx 600 gaining 0.5%, Germany DAX Index up 0.8% to 25449, and the UK's FTSE 100 increasing 0.4% to 10542.

Major Government Bonds

Major government bond yields retreated from recent highs, with the US - 10-Year Treasury Note Yield falling -0.04 percentage points to 5.3% and the US 2-year Treasury Note Yield declining to around 4.80%. This movement was largely attributed to a pause in the surge of yields, reduced expectations for near-term policy tightening, and stabilized oil prices. European sovereign bond markets also saw some relief, as the Germany 10-year Bond Yield eased down -0.01 percentage points to 3.5% and France - 10-Year Government Bond Yield saw a notable decline, easing concerns about the euro area's debt market pressure.

Major Commodities

Commodity markets showed mixed performance, with WTI Crude Oil prices rising 0.4% to $89.8 per barrel, after earlier volatility. While Brent Crude Oil finished slightly higher at $100.58 per barrel, as the market weighed increased Middle Eastern exports and planned emergency reserve releases against ongoing supply concerns. Gold prices advanced, rising 0.9% to settle at $4193.9 per ounce, supported by the retreat in U.S. Treasury yields and a weaker US Dollar Index, which was down -0.3% to 101.9.

Macroeconomics

The US services sector continued its expansion in September, with the ISM Services PMI registering 54.9, slightly below the prior month but indicating healthy activity. However, the Prices Paid Index accelerated to 74.0, its highest level since June 2022, signaling rising cost pressures. The Employment Index improved to 50.1, returning to expansion. In Europe, political uncertainty intensified as Spain's Prime Minister announced a snap election for November 29, 2026, adding to existing concerns over France's fiscal outlook.

Major Stock Markets

Major global stock markets advanced, with US equities leading the charge as the Nasdaq Composite surged 1.0% to a fresh record high of 27477, driven by strong performance in AI-related technology stocks. The S&P 500 also gained 0.7% to 7774, while the Dow Jones Industrial Average rose 0.2% to 51268. European markets saw mixed results, with the Euro Stoxx 50 up 0.04% and the FTSE 100 gaining 0.3% to 10498, though France's CAC40 notably declined -0.8% to 7834, reaching a record low amidst domestic fiscal concerns. In Asia, Japan's Nikkei 225 rose 2.4% to 69947, reaching a record high and Taiwan's Taiex gained 2.6% to 49712, reaching a record high, while Hong Kong's Hang Seng Index rose 0.3% to 24040.

Major Government Bonds

US government bond yields remained elevated, with the benchmark 10-year Treasury yield rising 0.03 percentage points to 5.3%, touching a record high since April 2002, and the 30-year Treasury yield reaching 5.66%, both touching multi-year highs. The 2-year Treasury yield was around 4.82%. In Europe, government bond yields continued to face pressure, with Spanish 10-year yields rising and the spread between French and German bond yields showing tentative signs of stabilization after last week's widening, reflecting ongoing fiscal and political concerns in the region.

Major Commodities

Oil prices retreated, with WTI crude settling around $89.2 per barrel, down -2.1%, and Brent crude around $100.32 per barrel, as Saudi export flows reportedly recovered and G7 nations released oil stocks, offsetting geopolitical concerns. Gold prices rose 0.2% to hover around $4,170.7 per ounce, while silver saw gains of over 1%.

Macroeconomics

The U.S. labor market showed signs of cooling, with September US - Nonfarm Payrolls vs. Unemployment Rate increasing by a softer-than-expected 29,000 jobs, significantly below the 90,000 consensus. The US - Nonfarm Payrolls vs. Unemployment Rate edged up to 4.2% from 4.1%, while US - Average Hourly Earnings vs. Employment Cost Index rose 3.0% year-over-year, the lowest since May 2021. This data, coupled with comments from Fed officials indicating no urgency for further tightening, led to a sharp reduction in market expectations for an October rate hike, with probabilities falling to approximately 23%.

Major Stock Markets

Major U.S. equity indices reacted positively to the softer jobs data, with the S&P 500 closing higher by 0.7% to 7723, the Dow Jones Industrial Average closing higher by 0.5% to 51177, and the NASDAQ Composite Index closing higher by 1.2% to 27191. Technology and mid-cap stocks notably outperformed, with all S&P 500 sectors except healthcare ending in positive territory. European markets, however, generally closed lower, and Hong Kong's Hong Kong Hang Seng Index experienced a significant decline, falling down -2.6% to 23972 and breaking below 24,000.

Major Government Bonds

U.S. Treasury yields experienced volatility, initially declining after the jobs report but later reversing course. The benchmark US - 10-Year Treasury Note Yield, after touching an intraday high of 5.34%, ended the day up 0.04 percentage points to 5.3%, near its highest level since 2002 and marking its fifth consecutive weekly increase. The US 2-year Treasury Note Yield also saw an initial dip followed by a rebound, ending around 4.82%, as persistent inflation concerns and solid growth prospects continued to weigh on the bond market.

Major Commodities

WTI Crude Oil prices ended lower, with WTI Crude Oil dropping down -1.7% to settle at $91.3 per barrel and Brent Crude Oil slipping to $102.25 per barrel. This decline was largely driven by news that G7 nations plan to release up to 100 million barrels of emergency oil and diesel stocks over four months to help curb surging fuel prices. Gold prices fell down -0.7% to $4,172.1 an ounce, marking a 3.6% weekly loss, while Silver also declined 1.24% to $60.42 an ounce, down 6.7% for the week.

September Job Report Highlights

The U.S. job market showed signs of slowing in September, with nonfarm payrolls increasing by 29,000, significantly below the forecast of 89,000 and the previous month's increase of 133,000. The unemployment rate rose to 4.2%, surpassing both the previous and forecasted rate of 4.1%.

Components Details

The mining and logging sector saw a decrease of 2,000 jobs, reversing the previous month's gain of 3,000. The information sector also reported a decline, losing 10,000 jobs compared to a loss of 18,000 in the prior month. Financial activities shed 7,000 jobs, an improvement from the previous month's loss of 9,000. Professional and business services experienced a reduction of 9,000 jobs, following a decrease of 5,000 jobs in August. Government employment saw a significant drop of 17,000 jobs, a stark contrast to the previous month's gain of 44,000. Conversely, the retail trade sector rebounded with an increase of 5,800 jobs, compared to a loss of 5,100 jobs in the previous month. Education and health services added 20,000 jobs, down from 38,000 in August, while leisure and hospitality gained 10,000 jobs, a decrease from the previous month's 37,000.

Macroeconomics

US Initial & Continuing Jobless Claims fell to 197,000, below expectations, while continuing claims dropped to a three-year low of 1.70 million, indicating a healthy labor market. Manufacturing data showed continued expansion, with the S&P U.S. Manufacturing PMI at 55.9 and ISM Manufacturing PMI at 54.5, although the US - ISM Manufacturing & Services PMI - Prices Index jumped significantly to 77.9, suggesting persistent cost pressures. However, Federal Reserve Vice Chair Jefferson and other officials signaled a patient approach to future policy adjustments, suggesting more time is needed to assess data and tempering expectations for an immediate rate hike.

Major Stock Markets

US equity markets closed mostly higher, with the S&P 500 posting a modest gain of 0.2% to 7667, while the Dow Jones Industrial Average closed at 50927 and the NASDAQ Composite at 26872, as the technology and energy sectors led the advance. This rebound followed an early session dip, partly aided by retreating bond yields and dovish signals from Federal Reserve officials. In contrast, European stock markets ended mostly lower, while Asian bourses were mixed, with Japan's Nikkei 225 Index surging 3.3% to 68957 and South Korea's KOSPI Index adding 2.0% to 6971.

Major Government Bonds

US Treasury yields retreated across the curve, with the benchmark US - 10-Year Treasury Note Yield falling down -0.04 percentage points to 5.2% after briefly touching a 24-year high of 5.34% earlier in the session. The US 2-year Treasury Note Yield also declined to 4.804%. This pullback in yields was largely attributed to Federal Reserve officials signaling a more patient approach to monetary policy, easing immediate rate hike concerns and providing relief to interest-rate sensitive assets. European and UK bond yields also saw declines.

Major Commodities

Crude oil prices surged significantly, with WTI Crude Oil rising 3.0% to $93.2 per barrel and Brent Crude Oil rising to $102.31 per barrel, driven by reports of China suspending fuel exports for October and heightened geopolitical tensions in the Middle East, including increased US troop deployments. Meanwhile, precious metals saw gains, with Gold advancing 0.5% to $4205.6 per ounce and Silver rising 1%.

Highlight

The Institute for Supply Management (ISM) released its Manufacturing Purchasing Managers' Index (PMI) for September, which came in at 54.5, slightly below the forecast of 54.8 and the previous month's reading of 54.6. This indicates a slower pace of growth in the manufacturing sector than anticipated.

Components

• New Order: Increased to 55.3 from 53.7, showing a rise in demand.
• Production: Decreased to 56.7 from 58.3, indicating a slowdown in manufacturing output.
• Employment: Rose to 52.7 from 51.2, suggesting an improvement in hiring.
• Inventories: Dropped to 48.6 from 50.6, reflecting a reduction in stock levels.
• Customers' Inventories: Fell to 41.6 from 42.8, indicating that customers' inventory levels are considered too low.
• Price: Jumped significantly to 77.9 from 71.1, highlighting increased cost pressures.
• Backlog of Orders: Increased to 56.4 from 51.8, showing a rise in unfulfilled orders.
• Exports: Declined to 50.9 from 53.2, indicating a decrease in international demand.
• Imports: Decreased to 51.0 from 52.5, reflecting a reduction in import activity.

Macroeconomics

US headline Personal Consumption Expenditures (PCE) price index rose 0.3% month-over-month in August, below expectations, with the year-over-year rate easing to 3.4%. Core PCE inflation also moderated to 0.25% month-over-month and 3.0% year-over-year, both below forecasts. Despite cooler inflation, second-quarter real GDP growth was revised up to a 2.2% annualized rate, and real consumer spending increased a solid 0.6% in August. Private-sector employment, as reported by ADP, showed a gain of 90,000 jobs in September, exceeding expectations. China's official Manufacturing PMI rose to 50.1% and Non-Manufacturing PMI to 50.2% in September, both entering expansion territory.

Major Stock Markets

US equity markets finished mixed, with the Dow Jones Industrial Average falling -0.9% to 50906 and the S&P 500 down -0.3% to 7652, while the Nasdaq Composite managed a 0.2% gain to 26861, largely supported by resilience in the technology sector and select large-cap names. European major indices closed lower across the board, with the Euro Stoxx 50 down 0.81%. Asian markets were mixed, seeing the Nikkei 225 rise 1.9% to 66754 and the Shanghai Composite gain 0.31%, while the Australian ASX 200 advanced 0.9% following softer local inflation data.

Major Government Bonds

US Treasury yields resumed their upward climb, with the benchmark 10-year Treasury yield rising 0.03 percentage points to 5.3%, reaching a record high. The 30-year Treasury yield also climbed to 5.63%, marking a multi-year high, reflecting persistent concerns over economic strength and fiscal financing needs despite moderating inflation data. The 2-year Treasury yield ended at 4.89%. Global government bonds recorded their worst quarterly performance since late 2024.

Major Commodities

International oil prices extended gains, with WTI crude settling up 1.0% at $90.3 per barrel and Brent crude rising 0.92% to $103.53 per barrel, driven by ongoing Middle East supply uncertainties. Gold prices reversed earlier declines to close up 0.3% at $4,190.4 per ounce, pressured by elevated real yields and a stronger dollar. Silver also declined by 1.69% to $60.43 per ounce, while COMEX 10月期铜 rose 1.5% to $6.6 per pound.

Macroeconomics

Macroeconomic data revealed a softening labor market and consumer sentiment, with August JOLTS job openings declining to 7.1 million and the September Consumer Confidence Index falling to 81.9, its lowest since 2014. Federal Reserve officials offered mixed signals; New York Fed President Williams suggested no urgency for further rate hikes after the September action, potentially only one more later this year, which tempered market expectations for an October hike to about 50%. However, Governor Barr reiterated the need for further tightening due to persistent inflation drivers like high energy prices and AI-related capital expenditure. Internationally, the Reserve Bank of Australia unanimously raised its cash rate by 25 basis points to 4.60% amid resilient domestic demand and escalating energy costs, while China introduced mortgage subsidies and expanded credit support.

Major Stock Markets

Major U.S. stock indices closed modestly lower, with the Dow Jones Industrial Average down -0.3% to 51350, a record low, the S&P 500 down -0.2% to 7671, and the Nasdaq Composite down -0.1% to 26798, primarily pressured by rising long-term bond yields. AI-related technology stocks showed relative resilience, with the semiconductor sector rising 1.3% to 12629. European markets were mixed, as the Euro Stoxx 50 gained 0.3% and the German DAX rose 0.1% to 25399, while the UK FTSE 100 fell down -0.5% to 10637 and France CAC 40 fell down -0.5% to 8036, a record low. Asian equities also saw varied performance, with Hong Kong's Hang Seng index down -0.5% to 24524 and South Korea's KOSPI down -0.3% to 6871, though mainland Chinese indices posted small gains.

Major Government Bonds

Government bond markets saw continued pressure on the long end, leading to a steepening of the yield curve. The U.S. 10-year Treasury yield edged down -0.01 percentage points to settle at 5.2%, while the 30-year Treasury yield surged to 5.619%, marking its highest level since 2002. In contrast, shorter-term yields, such as the 2-year Treasury yield, moved modestly lower to approximately 4.885%, finding some reprieve after comments from New York Fed President Williams. German 10-year government bond yields declined down -0.03 percentage points to 3.6%.

Major Commodities

Crude oil prices experienced a significant decline, with WTI crude down -4.2% to $88.7 per barrel and Brent crude retreating 3.03% to $95.44 per barrel. This downward movement was attributed to the U.S. announcing plans to release 40 million barrels from its Strategic Petroleum Reserve, reports of Saudi Arabia restoring partial capacity to its East-West pipeline, and ongoing mediation efforts in U.S.-Iran talks. Meanwhile, gold prices rebounded after hitting seven-week lows, rising up 1.1% to $4214.8 per ounce, alongside a 1.37% gain for silver.

Eurozone Economic Sentiment Indicator Falls Short

The Eurozone Economic Sentiment Indicator for September recorded a value of 97.9, falling short of the forecasted 99.0 and down from the previous month's 98.4. This marks a decline in economic sentiment across the Eurozone, signaling potential concerns about the region's economic outlook.

Main Countries and Sectors Details

• Germany: The indicator rose to 95.0, up from 94.4, reaching its highest level since May 2023.
• France: Recorded a decrease to 96.2 from 97.9.
• Greece: Increased to 107.6 from 106.9.
• Italy: Fell to 99.8 from 100.6.
• Spain: Notably rose to 105.5 from 102.1.

Sector Confidence Indicators

• Industrial Confidence: Improved to -3.8 from -5.0, the highest level since April 2023.
• Services Confidence: Increased to 6.1 from 5.6.
• Consumer Confidence: Declined to -16.5 from -15.5.
• Retail Confidence: Slightly decreased to -6.4 from -6.3.
• Construction Confidence: Remained unchanged at -5.0.

Macroeconomics

US-Iran negotiations remained stalled, contributing to heightened inflation concerns, while Fed Governor Cook noted that AI investment, energy costs, and wealth effects could continue to push inflation higher. The Dallas Fed manufacturing index printed at 9.8, below the 12.0 consensus, though outlook and employment components improved. In Europe, ECB President Lagarde indicated that significantly higher long-term interest rates would slow economic growth and curb inflation, leading to a "measured response" from the central bank, with market expectations for an October ECB rate hike falling below 40%. China's industrial profits increased by 15.7% year-on-year from January to August.

Major Stock Markets

Major US equity indices closed lower, with the S&P 500 declining down -0.8% to 7684, the Dow Jones Industrial Average falling down -0.7% to 51482, and the Nasdaq Composite dropping down -0.9% to 26820, as rising bond yields and energy prices weighed on risk appetite. European markets were largely flat to slightly down, with the Euro Stoxx 600 unchanged. Asian markets mostly retreated, notably the Kospi plunging down -2.7% to 6890 and the CSI 300 falling down -2.2% to 4341, marking a record low since 2025. In the technology sector, Meta experienced a significant decline of nearly 5%, while Nvidia bucked the trend, rising approximately 2% following an announcement of a substantial increase in its share buyback program.

Major Government Bonds

Government bond yields surged globally, with the benchmark 10-year US Treasury yield rising up 0.07 percentage points to 5.2%, marking a record high since 2007, as inflation fears intensified and hawkish comments from Fed officials persisted. The 2-year US Treasury yield also increased by 8 basis points to 4.93%. European bond markets followed suit, with the German 10-year Bund yield up 0.02 percentage points to 3.6%, marking a record high since 2009 and the UK 10-year gilt yield rising 6 basis points to 5.42%.

Major Commodities

Oil prices ended higher, albeit after significant intraday volatility, as ongoing US-Iran tensions and supply concerns kept markets on edge; WTI crude settled up 1.1% at $93.4 per barrel, while Brent crude rose 0.9% to $105.28 per barrel. Conversely, precious metals experienced a sharp sell-off, with gold tumbling down -3.9% to $4,154.4 per ounce and silver falling 4.8%, primarily driven by the surge in real yields and a stronger US dollar.

Macroeconomics

US economic data showed resilience, with August US - Durable Goods Orders unchanged and core capital goods orders rising a healthy 1.6%, indicating solid business investment. The University of Michigan's final September consumer sentiment registered 48.1, while 1-year inflation expectations rose to 4.6%. US - Initial & Continuing Jobless Claims unexpectedly fell to 197,000. Federal Reserve officials, including Williams, reiterated that another rate hike by year-end remains reasonable to combat inflation. US-China trade discussions continued, with leaders meeting and a trade truce extended by two months.

Major Stock Markets

Major U.S. equity markets closed higher, with the Dow Jones Industrial Average gaining 0.9% to 51829, the S&P 500 rising 0.5% to 7743, and the NASDAQ Composite Index advancing 0.5% to 27069. This rally was supported by easing oil prices, stabilizing Treasury yields, and robust economic data, particularly benefiting large-cap technology stocks. European stock markets also saw gains, with the Stoxx 600 Index closing up 0.35%.

Major Government Bonds

U.S. Treasury yields eased on Friday after a week of significant volatility, driven by inflation concerns and hawkish Federal Reserve commentary. The benchmark US - 10-Year Treasury Note Yield closed slightly lower, down -0.03 percentage points, to 5.2%. The US 2-year Treasury Note Yield also declined, settling at 4.85%.

Major Commodities

Oil prices experienced a notable decline amid reports of potential U.S.-Iran negotiations and a proposed plan to reopen the Strait of Hormuz. US WTI Crude Oil Futures fell down -2.3% to settle at $92.4 per barrel, while Brent crude futures dropped 2.14% to $104.32 per barrel. US Gold Futures, in contrast, rose 0.5% to $4,320.5 per ounce, though the precious metal still recorded a weekly loss.

Market Highlights

The September MM Fundamental Index reports significant movements across various global markets. Notably, US stocks have reached their lowest level since September 2020, with the latest stats at 2.04, down from 2.18. Taiwan stocks also hit a low not seen since April 2025, dropping to 1.21 from 1.41. Meanwhile, emerging market stocks have plummeted to their lowest since November 2024, with a significant drop to -1.36 from 1.14.

Components Details

• US Stock: Latest Stats 2.04 / Previous Stats 2.18 / Lowest Level Since 2020 September
• Taiwan Stock: Latest Stats 1.21 / Previous Stats 1.41 / Lowest Level Since 2025 April
• Emerging Market Stock: Latest Stats -1.36 / Previous Stats 1.14 / Lowest Level Since 2024 November
• High Yield Bond: Latest Stats -3.28 / Previous Stats -1.49 / Lowest Level Since 2022 November
• US Dollar: Latest Stats -1.19 / Previous Stats 0.08
• EUR: Latest Stats 1.29 / Previous Stats 1.83 / Lowest Level Since 2025 February
• Oil: Latest Stats -4.2 / Previous Stats -3.98
• Taiwan Dollar: Latest Stats 7.14 / Previous Stats 6.49

Macroeconomics

Global macroeconomic sentiment remained dominated by inflation concerns and hawkish central bank rhetoric. US initial jobless claims unexpectedly fell to 197,000, a historically low level, while continuing claims were 1.719 million. August new home sales surged to 684,000, significantly above expectations, and business activity expanded at its fastest pace since 2021, indicating robust economic growth. Several Federal Reserve officials reiterated support for further rate hikes this year, citing persistent inflation risks and strong economic momentum. In a positive development, the US and China agreed to extend their trade truce by two months, through January 10. Germany's Ifo Business Climate Index also improved to 90.4 in September.

Major Stock Markets

Major global stock markets ended mixed to little changed, as persistent inflation anxiety and soaring bond yields weighed on investor sentiment. The Dow Jones Industrial Average declined by -0.3% to 51350, reaching its lowest level since June 15, 2026, while the S&P 500 closed down a marginal -0.0% to 7704, and the Nasdaq Composite saw a slight gain of 0.0% to 26939. Underlying market breadth was generally weak, with small-cap stocks underperforming due to rising borrowing costs. European equities also finished modestly lower, with the Euro Stoxx 50 down 0.4% and the UK FTSE 100 down -0.2% to 10680. In Asia, the Nikkei 225 rose 0.8% to 65514 following a holiday, while the Hang Seng Index fell -0.3% to 24761.

Major Government Bonds

Government bond yields surged globally, with US Treasuries reaching multi-decade highs. The 10-year Treasury yield climbed 0.1 percentage points to 5.2%, reaching its highest level since 2007, and the 30-year Treasury yield reached 5.483%, a level not seen since 2004. The 2-year Treasury yield also rose to 4.928%, contributing to a bear-steepening of the yield curve. Demand for US Treasuries was weak, with a 7-year note auction tailing and a Treasury buyback operation falling short of its maximum target. Japanese 10-year government bond yields also jumped 0.1 percentage points to 3.1%, marking a new high since 1996, and Australian 10-year government bond yields moved higher by 12 basis points.

Major Commodities

Oil prices saw a significant rally, driven by escalating geopolitical tensions in the Middle East and renewed supply concerns. WTI crude futures settled up 2.7% at $94.6 per barrel, while Brent crude futures climbed 3.41% to $106.60 per barrel, with refined products like diesel surging to record highs. Initial reports of potential US-Iran talks to reopen the Strait of Hormuz briefly tempered gains, but prices rebounded as markets looked past these preliminary announcements. Gold prices, however, edged lower by -0.2% to $4308.9 per ounce, failing to attract safe-haven demand as a stronger US dollar, which rose 0.2% to 101.3, and rising bond yields weighed on the precious metal.

Macroeconomics

Strong U.S. economic data, with the September S&P Global U.S. Composite PMI rising to 58.4, the highest level since July 2021, fueled concerns about persistent inflation and further monetary tightening. Federal Reserve Governor Barr reinforced this sentiment, indicating that additional policy adjustments might be necessary. While the Eurozone's composite PMI also improved to 53.1, price pressures, particularly from increased input costs, remained a significant concern across major economies.

Major Stock Markets

Major global stock markets experienced a broad-based decline as surging bond yields and renewed inflation concerns weighed heavily on investor sentiment. U.S. equities closed lower, with the S&P 500 falling -0.8% to 7706, the Dow Jones Industrial Average down -0.7% to 51512, and the NASDAQ Composite Index dropping -1.1% to 26936, as rate-sensitive and growth sectors faced significant pressure. European indices also retreated, though the UK FTSE 100 remained largely unchanged, closing at 10705, while the energy sector was a notable outperformer amidst rising oil prices.

Major Government Bonds

Government bond markets saw a significant sell-off, pushing yields to multi-year highs across major economies. The US - 10-Year Treasury Note Yield surged 0.15 percentage points to 5.1%, reaching its highest level since July 2007, while the 5-year yield surpassed 5% for the first time since 2007, partly due to weak demand at its $70 billion auction. European long-term bond yields also climbed, with the Germany 10-year Bond Yield rising 0.10 percentage points to 3.5%, its highest level since June 2009, reflecting intensified expectations for higher interest rates.

Major Commodities

Crude oil prices rebounded sharply, with WTI Crude Oil gaining 2.4% to $92.7 per barrel and Brent Crude Oil surging 4.88% to $103.42 per barrel, driven by renewed concerns over Middle East supply disruptions following comments from an Iranian official regarding the IMF - Strait of Hormuz - Daily Transit Calls & Transit Trade Volume. Conversely, precious metals declined, with spot Gold falling -1.1% to $4328.5 per ounce and Silver dropping 3.83%, as the strengthening US Dollar Index, which rose 0.5% to 101.1, and rising bond yields diminished their appeal.

Eurozone PMI Overview

The Eurozone's Purchasing Managers' Index (PMI) for September has shown stronger-than-expected performance across both manufacturing and services sectors. The Manufacturing PMI remained steady at 52.7, slightly above the forecast of 52.6. The Services PMI rose to 53.0, surpassing both the previous figure of 51.6 and the forecast of 51.4. The Composite PMI, which combines both sectors, reached 53.1, marking the highest level since April 2023.

European Countries PMI Details

Germany's Manufacturing PMI saw a slight decline to 53.8 from 54.3. However, the Services PMI improved significantly, climbing to 52.9 from 49.7. In France, the Manufacturing PMI decreased to 50.3 from 51.1, while the Services PMI rose to 51.4 from 48.0. These figures indicate a mixed performance in the manufacturing sector but a notable improvement in services across the major European economies.

Macroeconomics

U.S. private employers added an average of 20,000 jobs per week for the four weeks ending September 5, up from 16,750 in the previous report, with the unemployment rate steady at 4.1%. Market-implied 10-year inflation expectations in Treasury Inflation Protected Securities (TIPS) declined by 5-10 basis points, suggesting easing inflation concerns. The Richmond Fed manufacturing index, however, fell from 4 to -2 in September, while Eurozone consumer confidence edged lower to -16.5.

Major Stock Markets

U.S. equity markets closed mixed, with the Nasdaq Composite advancing 0.45% to a new record high of 27244, primarily driven by continued strength in semiconductor stocks. The S&P 500 remained largely unchanged, closing at 7765, while the Dow Jones Industrial Average was down -0.4% to 51864, pressured by a notable 2.0% drop in financial shares. European and Asian markets generally ended higher, with the Euro Stoxx 50 gaining 0.1% and the Nikkei 225 up 1.38%.

Major Government Bonds

U.S. Treasury yields were largely flat to slightly lower, with the benchmark 10-year Treasury yield settling at 5.0%, down -0.01 percentage points. The 2-year Treasury yield was little changed at 4.756%, though it touched a two-year high earlier in the session. Market-implied 10-year inflation expectations in TIPS markets decreased by 5-10 basis points, reflecting an easing of inflation concerns.

Major Commodities

Crude oil prices extended their recent decline for a fifth consecutive session, with WTI crude was down -2.7% to $89.9 per barrel and Brent crude dropping 1.09% to $99.25 per barrel, marking its first close below $100 since September 8. This downturn was driven by reports of Saudi Arabia's East-West pipeline restart progress and diplomatic hopes between the U.S. and Iran regarding the Strait of Hormuz. Gold prices saw a modest rise of 0.4% to $4401.8 per ounce, while copper continued its rally, increasing 3.3% to $6.9, reaching a record high.

Macroeconomics

Optimism regarding US-China trade discussions and potential US-Iran diplomatic engagement eased geopolitical tensions, though Federal Reserve officials maintained a hawkish stance, with Chicago Fed President Goolsbee and St. Louis Fed President Musalem suggesting further rate hikes may be necessary to combat US - Consumer Price Index (CPI). Meanwhile, US diesel retail prices reached a new record, surpassing $6.50 per gallon, while the EU extended sanctions on Russia for 36 months.

Major Stock Markets

US major stock markets surged, with the S&P 500 rising 1.5% to 7765 and the NASDAQ Composite Index gaining 2.3% to close at a record high of 27122, driven by strong performance in technology and AI-related sectors. The Dow Jones Industrial Average also advanced 0.7% to 52049. European equities followed suit, with the Stoxx 600 Index climbing 1.0% and Germany DAX Index up 1.1% to 25575.

Major Government Bonds

Major government bond yields declined, with the US - 10-Year Treasury Note Yield falling -0.04 percentage points to 5.0%, reflecting reduced inflation concerns following the drop in oil prices. Europe - 10-Year Bond Yield also saw declines, with Germany 10-year Bond Yield down -0.07 percentage points to 3.5%.

Major Commodities

Oil prices experienced a significant decline, with WTI Crude Oil falling down -4.5% to $91.8 per barrel and Brent Crude Oil dropping around 3.4% to $100.34 per barrel, largely due to hopes for diplomatic progress in the Middle East and increased Saudi oil exports. Gold also retreated, declining down -0.9%.

Highlight

The global economic expectation index for September recorded a slight increase, reaching 2.6%, up from the previous 2.57%.

Components

• US: The index remained stable at 2.11%.
• Eurozone: Saw an increase to 1.2% from 1.07%.
• UK: Matched the Eurozone with a rise to 1.2% from 1.07%.
• Germany: Slightly up to 1.08% from 1.03%.
• Japan: Increased to 0.8% from 0.77%.
• China: Decreased to 4.47% from 4.53%.
• Italy: Dropped to 0.75% from 0.83%.
• Taiwan: Notable increase to 6.5% from 6.36%.
• India: Marginal increase to 6.98% from 6.97%.
• Canada: Rose to 1.54% from 1.43%.
• Indonesia: Slight increase to 5.05% from 5.03%.
• South Korea: Increased to 2.72% from 2.67%.
• Singapore: Rose to 3.5% from 3.43%.
• Malaysia: Slight decrease to 4.8% from 4.83%.

Macroeconomics

Major central banks were active, with the Federal Reserve hiking its policy rate by 25 basis points to a range of 3.75% to 4%, signaling a hawkish stance with expectations for another increase this year. The Bank of Japan also raised its policy rate by 25 basis points to 1.25%, the highest since 1995, though the yen weakened due to internal dissent regarding future tightening. The Bank of England, meanwhile, held its interest rates steady at 3.75% and announced the cancellation of its long-term bond selling program. On the data front, US August retail sales surpassed expectations, while August industrial output remained unchanged. French 10-year government bond yields rose significantly to 4.56%, marking their highest level since 2008 and widening the spread against German bonds.

Major Stock Markets

Major US equity indices closed mixed, with the Nasdaq posting a slight gain of 0.4% to 26523 and the S&P 500 up 0.2% to 7651, primarily driven by strength in semiconductor and AI-related stocks. The Dow Jones Industrial Average, however, finished marginally lower, down -0.2% to 51683. For the week, the Nasdaq gained 0.7%, the S&P 500 declined 0.1%, and the Dow dropped 1.7%. European stock markets generally retreated amid concerns over French fiscal stability, while Asian markets, including Japan, which advanced 1.4% to 65019, and South Korea, up 2.7% to 6894, advanced, with technology and semiconductor sectors leading the charge.

Major Government Bonds

US Treasury yields saw an upward trend, with the benchmark 10-year yield settling at 5.0%, up 0.05 percentage points, and the 2-year yield reaching a new 52-week high of 4.741%, reflecting continued market adjustments to central bank policy. This led to a flattening of the yield curve. In Europe, government bond markets faced pressure, particularly in France, where the 10-year yield climbed 12 basis points to 4.56%, its highest level since 2008. The spread against German bunds, whose 10-year yield rose 0.04 percentage points to 3.5%, widened significantly.

Major Commodities

International oil prices declined for a third consecutive day, with WTI crude settling at $99.5 per barrel, down -2.3%, and Brent crude at $103.87, though prices remained elevated amid ongoing Middle East supply concerns and record-high US diesel prices. Gold and silver prices both advanced, with gold settling at $4,415.9 an ounce, up 0.4%, and silver at $67.15 an ounce. Industrial metals saw gains, with copper settling at $6.7, up 2.0%, recording its eleventh weekly rise out of twelve, while Bitcoin surged 6.4% to 81280.7, its highest level since May 12, 2026, partly driven by regulatory developments concerning tokenized stocks.

Macroeconomics

US economic data showed mixed signals with initial jobless claims falling to a two-year low of 196,000 and continuing claims reaching 1.73 million, indicating labor market resilience. However, housing starts declined to 1.27 million, and building permits also fell to 1.39 million, suggesting weakness in the housing sector. The Philadelphia Fed manufacturing index eased to 37.8 but remained strong. Globally, the Bank of England held its policy rate steady at 3.75% for the sixth consecutive meeting and announced the cancellation of its long-dated gilt sales plan, while expecting CPI to rise to 3.75% in Q4 2026 and above 4.00% in Q1 2027.

Major Stock Markets

Major global stock markets saw a broad rebound, with U.S. equities posting significant gains as the S&P 500 rose 1.1% to 7638, the Nasdaq Composite climbed 1.7% to 26418, and the Dow Jones Industrial Average added 0.6% to 51778. This marked the best session for the S&P 500 and Nasdaq since early August, driven by strength in technology, semiconductor, and AI-related sectors. European markets also advanced, with the FTSE 100 gaining 1.2% to 10816 and the Euro Stoxx 50 up 0.9%, while Asian markets were mixed.

Major Government Bonds

U.S. Treasury yields retreated across the curve, with the benchmark 10-year Treasury yield falling 0.07 percentage points to 4.9%, moving back below the 5% threshold after an extended rise. The 2-year Treasury yield also declined by over 7 basis points to 4.675%. This broad bond market rally was attributed to easing inflation concerns and investor comfort with central bank policy signals. European bond yields also saw declines, including a 7 basis point drop in UK 10-year gilt yields.

Major Commodities

Crude oil prices extended their recent pullback for a second consecutive day, with WTI crude settling at $101.0 per barrel, down -1.4%, as reports of potential increased Saudi supply and de-escalation efforts in the Middle East eased supply disruption fears. Concurrently, precious metals saw a decline, with spot gold down -0.1% to $4381.2 per ounce, and silver climbing 3.49%. Industrial metals also gained, with copper rising 2.8% to $6.6 per pound.

Macroeconomics

The Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75%-4.00%, marking the first hike since 2023. The accompanying dot plot indicated a notably hawkish stance, with 16 of 18 officials projecting at least one more rate increase by year-end 2026. U.S. August US - Retail Sales Value significantly surpassed expectations, rising 1.2% month-over-month, with control group sales up 1.4%, signaling robust consumer spending despite rising interest rates and a decline in homebuilder sentiment.

Major Stock Markets

U.S. equity markets reacted negatively to the Fed's hawkish tone, with the Dow Jones Industrial Average down -1.2% to 51462, reaching a record low, and the S&P 500 down -0.5% to 7552, while the NASDAQ Composite Index remained largely unchanged. In contrast, European stock markets generally advanced, and Asian equities were mixed to higher, with the Japan Nikkei 225 Index gaining 0.7% to 63923 and the South Korea - KOSPI Index rising 1.4% to 6718.

Major Government Bonds

U.S. Treasury yields saw a mixed but generally upward movement, particularly on the short end of the curve, as investors priced in further tightening. The US 2-year Treasury Note Yield rose by 7 basis points to 4.749%, reaching its highest level since mid-2024, while the US - 10-Year Treasury Note Yield rose 0.03 percentage points to 5.0%, reaching a record high. The US Dollar Index surged 0.7% to 100.3, marking its best single-day gain in three months.

Major Commodities

Crude oil prices retreated sharply, with WTI Crude Oil down -3.5% to $102.1 per barrel and Brent Crude Oil declining 2.7% to $105.83 per barrel, following reports that Saudi Arabia aims to restore half the capacity of a key pipeline within days. Gold prices reversed earlier gains to close down -0.8% at $4300.0 per ounce, pressured by the stronger dollar and hawkish Fed outlook, while Silver also declined.

Retail Sales Growth

The latest data for US retail sales in August shows a significant increase, with a month-on-month (MoM) growth of 1.24%, surpassing the forecast of 0.8% and reversing the previous month's decline of 0.54%. Year-on-year (YoY), retail sales rose by 6.01%, up from 5.03% in the previous period.

Control Group Performance

The retail sales control group, which excludes more volatile categories, also showed strong performance with a MoM increase of 1.33%, well above the forecast of 0.4% and marking the highest level since September 2024. On a YoY basis, the control group sales grew by 5.63%, compared to 4.51% previously.

Components Details

• Sporting Goods saw a notable YoY increase to 10.74% from 9.99%.
• Electronics Appliance sales rose significantly YoY to 7.84% from 5.47%.
• Gasoline Stations experienced a sharp YoY rise to 20.96% from 17.07%.
• Furniture sales improved YoY to 1.93% from a previous decline of -2.71%.
• Health & Personal Care sales increased YoY to 1.91% from 0.43%.
• Nonstore Retailers reported a YoY growth of 9.88%, up from 8.32%.

Macroeconomics

The market was largely focused on the upcoming Federal Reserve interest rate decision, with expectations for a 25 basis point hike. Economic data showed mixed signals: the New York Fed's manufacturing index dropped significantly from 20.6 to 7.6, with new orders declining, though prices paid rose to 63.1. In China, August's industrial production increased by 5.2%, but retail sales grew modestly at 0.4%, and fixed asset investment for January-August fell by 7.2%, with real estate investment down 19.9%. Concerns over inflation and government debt led to reports that the Bank of England is considering ceasing the sale of long-term government bonds.

Major Stock Markets

Global equity markets experienced a broad decline, with major indices in the U.S., Europe, and Asia closing lower. In the U.S., the S&P 500 fell down -0.5% to 7586, the Dow Jones Industrial Average down -0.6% to 52093, and the Nasdaq Composite down -0.8% to 25982, as investors reduced risk ahead of the Fed's decision. European markets also saw modest declines, with the Euro Stoxx 50 down 0.3% and the FTSE 100 down -0.4% to 10658. While most sectors were under pressure, energy stocks were a notable exception, posting gains, and the US - PHLX Semiconductor Sector Index managed a slight rebound, up 0.4% to 11175 after recent instability, though crypto-related stocks plunged following the failure of a regulatory bill in the U.S. Senate.

Major Government Bonds

Government bond yields continued their upward trend globally, reaching multi-year highs. The US - 10-Year Treasury Note Yield climbed to 5.0%, a record high. The 30-year Treasury yield also rose to 5.37%, while a 20-year U.S. Treasury auction saw weak demand, with the yield reaching 5.42%. Elsewhere, the Germany 10-year Bond Yield increased to 3.5%, a record high, and longer-term Japanese government bond yields also moved higher, with the benchmark Japan 10-year Government Bond Yield moving higher by 0.1 percentage points to 3.0%, a record high. Australia 10-Year Government Bond Yield rose by 8bps to 5.42%.

Major Commodities

International oil prices surged significantly amid heightened supply concerns from the Middle East. US WTI Crude Oil Futures jumped up 3.8% to $105.3 per barrel, a record high. And Brent Crude Oil rose by 2.9% to $108.75 per barrel. This rally was fueled by reports of three Libyan oil fields halting operations, Saudi Arabia canceling some crude shipments to Europe, and the suspension of oil loading at Saudi Arabia's Red Sea port of Yanbu. Diesel prices also reached record highs. In precious metals, Gold prices edged lower, down -0.4% to $4335.0 per ounce, while Silver saw a modest gain.

Macroeconomics

Global markets were primarily influenced by concerns over the pace of AI development, with industry leaders calling for a slowdown, countered by former President Trump's opposition. Geopolitical tensions in the Middle East escalated following a Saudi pipeline closure and postponed diplomatic talks, pushing oil prices higher and intensifying inflation fears ahead of the Federal Reserve's anticipated rate hike this week. China reported August M2 at 356.81 trillion yuan (+7.5% YoY) and social financing at 23.91 trillion yuan cumulatively for the first eight months, down 2.64 trillion yuan YoY.

Major Stock Markets

Major global stock markets closed mostly lower, with U.S. indices like the S&P 500 fell -0.5% to 7620, Nasdaq Composite fell -0.6% to 26186, and Dow Jones Industrial Average fell -0.3% to 52421 all declining. The downturn was largely driven by fears of a slowdown in AI development, which heavily impacted semiconductor and related technology sectors, with the PHLX Semiconductor Sector Index (SOX) falling -5.9% to 11131. European markets were mixed, with the Euro Stoxx 50 falling 1.02% while the UK FTSE 100 gained 0.4% to 10698.

Major Government Bonds

Government bond markets saw a significant sell-off, with the U.S. 10-year Treasury yield rose 0.02 percentage points to 5.0% at close, reaching a record high for the first time since July 2007. The U.S. 2-year Treasury yield also climbed to 4.671%, reflecting heightened inflation concerns and strong expectations for a Federal Reserve rate hike this week. German 10-year Bund yields also advanced 0.03 percentage points, closing at 3.5%, a record high since June 2009.

Major Commodities

Commodity markets saw international oil prices climb, with WTI crude settling up 1.9% at $102.0 per barrel and Brent crude rising 1.41% to $103.16 per barrel, fueled by supply concerns from the Saudi pipeline closure and ongoing Middle East tensions. Conversely, precious metals declined as the U.S. dollar index strengthened 0.3% to 99.5 and bond yields rose, with spot gold falling down -1.6% to $4339.3 per ounce and silver down 1.96%.

Macroeconomics

US August core CPI rose 0.3% month-over-month, exceeding the 0.2% consensus, while headline CPI increased 0.4% monthly and 3.4% annually, both in line with expectations. Annually, core CPI was up 2.4%, the lowest since March 2021. Energy prices contributed to inflation, rising 2.1% for the month, with transportation services also up 0.5%. The University of Michigan's preliminary September consumer sentiment slipped to 47.8, and 1-year inflation expectations jumped to 4.6%. The European Central Bank raised its policy rate by 25 basis points, and following the US inflation data, futures markets now assign an approximately 85-90% probability of a Federal Reserve rate hike at its upcoming meeting.

Major Stock Markets

Major US equity markets rebounded, ending a four-day losing streak, with the S&P 500 gaining 0.9% to 7657, the Dow gaining 1.0% to 52573, and Nasdaq gaining 1.0% to 26333. This rally was partly driven by a pullback in oil prices and the overall CPI report not being worse than feared, despite the core inflation surprise. Technology, Industrials, and Communications sectors led the gains, while Healthcare and Utilities lagged. Despite Friday's rebound, all major US indices recorded weekly declines. AI-related stocks remained a bright spot, with Oracle's strong cloud infrastructure results and Microsoft's data center expansion plans providing momentum, and Dell surging on AI infrastructure optimism. European markets also closed higher, though Asian indices generally saw declines.

Major Government Bonds

Government bond yields across major economies finished higher, particularly at the shorter end of the curve, reflecting increased expectations for central bank tightening. The US 2-year Treasury yield rose over 15 basis points to 4.594%, and the 10-year Treasury yield increased by 0.03 percentage points to 5.0%, reaching its highest level since October 20, 2023. This move was exacerbated by a disappointing US Treasury buyback operation, which fell short of its maximum authorized amount. Globally, the German 10-year yield rose 0.01 percentage points to 3.5%, hitting its highest level since August 10, 2009, and the Japan 10-year yield rose 0.08 percentage points to 3.0%, reaching its highest since 1996, following the ECB's rate hike and anticipation of further global monetary tightening.

Major Commodities

Oil prices retreated on Friday, with WTI crude settling at $99.99 per barrel, down -2.4%, but both benchmarks still posted significant weekly gains of nearly 10% and 9% respectively. The daily decline was attributed to reports of potential talks between Gulf states and Iran to ease Middle East tensions and manage shipping through the Strait of Hormuz. However, concerns over supply disruptions persisted after Saudi Arabia preventatively closed a key East-West oil pipeline following attacks, and US diesel prices reached a new record high above $6.00 per gallon. Gold prices ended the day down -0.4% to $4390.0, but recorded weekly losses.

CPI Overview

The Consumer Price Index (CPI) for August showed a YoY increase of 3.4%, slightly below the forecast of 3.4% and the previous month's 3.36%. On a MoM basis, the CPI rose by 0.4%, aligning with forecasts but below the previous month's 0.07%.

Core CPI Insights

The Core CPI, which excludes food and energy, recorded a YoY increase of 2.45%, slightly above the forecast of 2.4% and the previous month's 2.48%. This marks the lowest level since March 2021. On a MoM basis, the Core CPI rose by 0.29%, surpassing the forecast of 0.2% and the previous month's 0.22%.

Components Details

Energy prices surged with a YoY increase of 16.05%, up from 14.45% previously. Education & Communication saw a significant rise to 2.15% from 0.55%. Transportation costs increased to 5.97% from 5.58%. Conversely, Medical Care Commodities experienced a decline of -2.69%, slightly up from -2.71% previously. Other notable changes include Food & Beverages at 2.58%, Shelter at 3.03%, and Apparel at 3.62%.

Macroeconomics

Inflation concerns intensified following the release of August's US - Producer Price Index (PPI), which rose 5.4% year-over-year, exceeding the 5.3% expectation, though core PPI month-over-month increased a cooler 0.2%. Initial jobless claims remained low at 206,000, indicating a resilient labor market, while existing home sales fell 2.0% to an annual rate of 3.98 million units. The European Central Bank raised its key interest rates by 25 basis points, as anticipated, and revised its inflation forecasts higher for 2027 and 2028, citing persistent inflationary pressures from the Middle East conflict. Market odds for a Federal Reserve rate hike next week increased to around 70-73%.

Major Stock Markets

Major global stock markets experienced broad declines for the fourth consecutive session, driven by rising bond yields, surging oil prices, and persistent inflation worries. The S&P 500 fell -0.6% to 7592, the Dow Jones Industrial Average fell -0.6% to 52064, and the Nasdaq Composite fell -0.7% to 26082. European indices also retreated, with the Euro Stoxx 600 down 1.4%, following the hawkish ECB rate hike. Technology, particularly semiconductors, and materials sectors were among the weakest performers, while consumer staples and certain software names showed relative resilience.

Major Government Bonds

Government bond yields surged globally as inflation fears and central bank hawkishness took center stage. The benchmark US 10-year Treasury yield climbed 0.13 percentage points to 5.0%, reaching its highest level since October 20, 2023, while the 2-year yield rose 16 basis points to 4.59%. The 30-year Treasury yield also increased 8 basis points to 5.37%, a level not seen since June 2007. European bond yields followed suit, with the German 10-year Bund yield rising 0.06 percentage points to 3.5%, reaching its highest level since April 12, 2011.

Major Commodities

Oil prices surged significantly, with WTI crude jumping 8.5% to $104.2 per barrel and Brent crude rising 6.3% to $107.63 per barrel, with WTI reaching its highest level since May 20, 2026. This rally was fueled by escalating Middle East tensions, including Houthi actions in the Red Sea and reports of Iran resuming ballistic missile production, alongside news of Saudi Arabia's August crude output falling to its lowest since 1990. In contrast, precious metals declined, with gold falling down -2.2% to $4362.2 and silver tumbling 5.4%, pressured by the sharp rise in bond yields and strengthened Fed rate hike expectations. Copper prices also dropped down -4.1% to $6.5 amid reports of a stalled US tariff plan.

Macroeconomics

Geopolitical tensions intensified in the Middle East, driving renewed concerns about inflation and central bank policy. China's August Consumer Price Index (CPI) rose by 0.8% year-on-year, while the Producer Price Index (PPI) increased by 3.8% year-on-year, both turning positive month-over-month. In the U.S., the Treasury Department's announcement of a $6 billion long-term bond buyback program fell short of market expectations, further exacerbating rate concerns. Traders are now pricing in approximately a 60% probability of a Federal Reserve rate hike in September, with expectations for rate increases from the European Central Bank and Bank of England also rising.

Major Stock Markets

Major global equity markets experienced broad declines, with U.S. indices closing lower for a third consecutive session; the S&P 500 fell -0.5% to 7636, the Dow Jones Industrial Average dropped -0.8% to 52381, and the Nasdaq Composite decreased by -0.6% to 26253. European markets also saw significant losses, with the Euro Stoxx 50 down 1.6%, Germany's DAX falling -1.7% to 25576, and the UK's FTSE 100 declining -1.3% to 10670. Energy stocks were a notable exception, outperforming other sectors in the S&P 500 amid surging oil prices.

Major Government Bonds

Government bond yields surged globally as inflation concerns mounted and the U.S. Treasury's bond buyback announcement disappointed. The U.S. 10-year Treasury yield climbed 0.05 percentage points to 4.8%, reaching a record high since November 2023. Similarly, the German 10-year Bund yield rose 0.08 percentage points to 3.4%, a record high since 2011, and the UK 10-year Gilt yield increased 9 basis points to 5.26%, a level not seen since 2007.

Major Commodities

International oil prices continued their ascent driven by escalating Middle East tensions, with Brent crude futures breaking above $100 per barrel for the first time since July, settling at $101.21, while WTI crude futures rose 4.8% to $97.5 per barrel, a record high since May 2026. Precious metals saw gains, with spot gold rose 0.2% to $4447.8 per ounce, and silver jumping 2.32%. Industrial metals also surged, with London Metal Exchange (LME) copper hitting a new record high of $14,858.5 per metric ton.

Macroeconomics

Geopolitical tensions in the Middle East intensified, with Houthi attacks on Saudi energy facilities and reports of US strikes on Iranian targets, reigniting inflation concerns. Markets are keenly awaiting upcoming US August inflation data (US - Producer Price Index on Thursday, US - Consumer Price Index (CPI) on Friday) for clues ahead of the US - Federal Funds Rate's September 15-16 meeting, where a roughly 58-59% probability of an US - FedWatch Probability of Rate Hike/Cut is priced in. Meanwhile, China's August China - Exports rose 25.0% year-on-year, and China - Imports increased 28.2% year-on-year, resulting in a record China - Imports/Exports vs. Trade Balance of $119.09 billion, while US consumer credit increased by $18.1 billion in July.

Major Stock Markets

US equity markets closed lower, with the S&P 500 down -0.6% to 7673, the Dow Jones Industrial Average down -1.2% to 52786, and the NASDAQ Composite Index down -0.3% to 26421. The downturn was primarily driven by escalating geopolitical tensions and rising oil prices, which fueled inflation and rate hike fears. Sector performance saw Energy Select Sector SPDR Fund and Utilities Select Sector SPDR Fund outperform, while Health Care Select Sector SPDR Fund and iShares Global Financials ETF (IXG) led declines, though iShares PHLX Semiconductor ETF showed some resilience. European markets were mixed, and Asian markets generally finished lower.

Major Government Bonds

US Treasury yields were mixed across the curve. The benchmark US - 10-Year Treasury Note Yield closed at 4.8%, showing no change, while the policy-sensitive US 2-year Treasury Note Yield rose to 4.39%. This movement reflected increased market expectations for a US - FedWatch Probability of Rate Hike/Cut in the near term. The Japanese Yen, in contrast, edged slightly lower against the US Dollar, with USD/JPY at 153.8. The US Dollar Index was down -0.3% to 98.8.

Major Commodities

Oil prices surged significantly due to the escalating Middle East conflict and attacks on energy infrastructure. US WTI Crude Oil Futures surged 2.0% to $94.4 per barrel, reaching its highest level since June 4, 2026, and Brent Crude Oil Futures settled at $97.92 per barrel, briefly approaching the $100 mark. US Gold Futures declined, with Gold futures down -1.5% to $4401.3 per ounce, while Copper continued its rally, rising 0.8% to $14946.3 per ton, reaching a record high since July 1, 1959.

Macroeconomics

Eurozone economic data showed strength, with Q2 GDP revised upwards to 0.6% month-on-month and 1.2% year-on-year, while the September investor confidence index climbed to a four-year high of 5.1. However, political risk in the Eurozone increased following the German far-right AfD's significant win in a state election, securing 43.8% of the vote. In the US, gasoline prices reached a new Labor Day record of approximately $4.15 per gallon amid Middle East tensions, and China's central bank continued its gold accumulation, adding 650,000 ounces in August.

Major Stock Markets

US stock markets were closed for the Labor Day holiday. European equities saw mixed performance, with the Euro Stoxx 600 flat, while Germany's DAX declined down -0.2% to 26007 and France's CAC 40 posted a modest gain of 0.3% to 8306. Asian markets, particularly in tech, rallied strongly, with Japan's Nikkei 225 up 2.1% to 66400 and South Korea's KOSPI surging 4.6% to 6995 following significant advancements in AI models and robust demand for storage chips. Chinese A-shares were also mixed but saw strong gains in AI-related sectors.

Major Government Bonds

US Treasury markets were closed for the holiday, though futures indicated a cautious sentiment. European government bond yields rose, with the German 10-year Bund yield increasing by 0.05 percentage points to 3.4%, a record high since April 15, 2011. Concerns over potential Japanese sales of US Treasuries to fund currency intervention, alongside persistent inflation worries and expanding fiscal deficits, contributed to upward pressure on global long-term yields.

Major Commodities

Oil prices surged, with WTI crude rising 1.3% to $92.7 per barrel, a record high since June 5, 2026, driven by escalating US-Iran hostilities and fresh attacks on Saudi Aramco facilities. Gold declined down -0.4% to $4458.4 per ounce, pressured by higher yields and inflation expectations. LME copper reached a new all-time high of $14,533 per tonne, fueled by speculation regarding new US tariffs on copper imports.

Macroeconomics

US August Nonfarm Payrolls significantly exceeded expectations, adding 162,000 jobs against a forecast of 55,000, with the unemployment rate holding at 4.1% and prior months' data revised up by 55,000. This data boosted the probability of a September Federal Reserve rate hike to 58% from 49.4%. In contrast, Canada's August employment unexpectedly decreased by 41,700. The US Treasury imposed sanctions on a Turkish investment bank for alleged ties to an Iranian shadow banking network. S&P also issued a credit warning regarding AI infrastructure, projecting over $7 trillion in capital expenditure by 2030 for major cloud vendors with unquantified returns, raising concerns about tech giants' debt sustainability.

Major Stock Markets

Major US stock indices closed lower, ending a two-day winning streak, with the S&P 500 falling -0.4%, the Nasdaq Composite Index down -0.3%, and the Dow Jones Industrial Average declining -0.5%, as strong employment data reignited rate hike concerns. However, the US - PHLX Semiconductor Sector Index notably rose 3.4%. Asian markets showed mixed performance, with Hong Kong's Hong Kong Hang Seng Index gaining 1.7% and the Hong Kong - Hang Seng TECH Index up 2.27%, while mainland Chinese A-shares edged lower. European equities also saw mixed results.

Major Government Bonds

US Treasury yields rose across the curve following the robust jobs report, with the US 2-year Treasury Note Yield increasing 3.4 basis points to 4.3703% and briefly touching 4.416%, its highest level since January 2025. The US - 10-Year Treasury Note Yield was around 4.8%. Adding to market movements, Norway's sovereign wealth fund announced plans to reduce its US Treasury exposure by approximately $80 billion, intending to reallocate towards agency mortgage-backed securities.

Major Commodities

Oil prices saw a slight dip, with WTI Crude Oil settling down -0.1% at $91.2 per barrel and Brent Crude Oil rising 0.80% to $96.28 per barrel, both marking weekly gains of about 9%. Gold initially dropped after the strong US jobs data but recovered most of its losses to close down -1.4% at $4477.2 per ounce. Industrial metals also saw gains, with Copper increasing 1.4% to $6.7.

August Job Report Highlights

The US Nonfarm Payrolls for August reported a significant increase, with a monthly change of 162.0k, surpassing the forecast of 55.0k and the previous month's 21.0k. The unemployment rate remained steady at 4.1%, aligning with both previous and forecasted figures.

Components Details

• Mining & Logging saw a positive shift with a change of 3.0k, up from -3.0k.
• Construction increased to 22.0k from 18.0k.
• Retail Trade experienced a decline, with a change of 1.4k compared to the previous 13.2k.
• Transportation dropped to 5.0k from 13.8k.
• Information sector faced a significant decrease, reporting -23.0k from a previous 5.0k.
• Financial Activities remained unchanged at -11.0k.
• Education & Health Services surged to 29.0k from 12.0k.
• Leisure & Hospitality rebounded with a change of 62.0k, up from -21.0k.
• Government employment increased significantly to 35.0k from -50.0k.
• Goods Production rose to 41.0k from 29.0k.
• Private Service showed a notable increase to 86.0k from 42.0k.

Macroeconomics

Federal Reserve Governor Waller's remarks, indicating a willingness to hold interest rates steady in September if disinflationary trends continue, significantly influenced market sentiment, leading to a reassessment of September hike probabilities to roughly 50%. Economic data revealed Q2 nonfarm business sector productivity increased at a 1.4% annualized rate, with unit labor costs revised lower to a 1.2% annualized gain. The August ISM Services PMI rose to 55.4, exceeding expectations, though prices paid reached a four-year high. Initial jobless claims edged up to 206,000, and the July trade deficit widened to $88.6 billion.

Major Stock Markets

Major global stock markets closed higher, primarily driven by dovish signals from a Federal Reserve Governor regarding interest rates. U.S. equities saw broad-based gains, with the Dow Jones Industrial Average rising 1.2% to 53686, the S&P 500 up 1.1% to 7748, and the Nasdaq Composite advancing 1.4% to 26584, led by sectors such as consumer discretionary and financials. European markets also posted gains, while Asian equities were mixed.

Major Government Bonds

Government bond yields retreated globally following the Federal Reserve Governor's comments, which eased concerns about aggressive rate hikes. The U.S. 10-year Treasury yield fell 0.02 percentage points to 4.8%, while the 2-year yield dropped to around 4.34%. Japanese government bond yields also declined, with the 10-year yield decreasing 0.07 percentage points to 2.9%, as speculation of a Bank of Japan rate hike intensified, contributing to a broader rally in fixed income markets.

Major Commodities

Oil prices continued their upward trend, with WTI crude settling at a record high of $91.7 per barrel, up 0.8%, driven by escalating geopolitical tensions in the Middle East and concerns over supply disruptions in the Strait of Hormuz. Gold experienced a significant rally, closing at $4523.5 an ounce with a gain of 2.5%, alongside a rise in silver prices, both supported by a weaker U.S. dollar and reduced expectations for aggressive interest rate hikes. Industrial metals like copper and iron ore also saw gains.

Highlight

The Institute for Supply Management (ISM) reported that the Services Purchasing Managers' Index (PMI) for August rose to 55.4, surpassing both the previous and forecasted figures of 54.1. This marks a continued expansion in the services sector, maintaining a position above the 50 mark since May 2025.

Components

• Business Activity: Increased to 61.7 from 59.1.
• New Orders: Jumped to 60.9, the highest level since February 2023, from 57.2.
• Employment: Slightly decreased to 47.8 from 47.4.
• Supplier Deliveries: Decreased to 51.3 from 52.8.
• Inventory: Rose significantly to 56.7 from 51.4.
• Prices: Increased to 72.6, the highest since June 2022, from 70.3.
• Backlog of Orders: Increased to 55.6 from 50.9.
• New Export Orders: Increased to 56.3 from 52.0.
• Imports: Increased to 56.3 from 51.8.
• Inventory Sentiment: Increased to 54.1 from 52.5.

Macroeconomics

US ADP private payrolls increased by a lower-than-expected 38,000 in August, marking the smallest gain since January. New York Fed President Williams suggested that rising Treasury yields reflect a strong US economy rather than inflation concerns, indicating insufficient reason for further rate hikes, while the Fed's Beige Book noted slight to moderate economic growth and moderate price increases. The Bank of Canada maintained its overnight rate at 2.25%, and the Reserve Bank of New Zealand raised its Official Cash Rate by 25 basis points to 2.75%. In Europe, ECB Governing Council member Nagel signaled a high probability of a rate hike next week, even as the France-Germany 10-year bond spread widened to 88 basis points, reflecting Eurozone fiscal fragility. The Japanese Yen strengthened significantly, with USD/JPY down -0.9% to 158.7, amid speculation of intervention and hawkish comments from the Bank of Japan regarding potential aggressive normalization.

Major Stock Markets

US equities ended a three-day losing streak, with the S&P 500 rising 0.5% to 7667, the Dow Jones Industrial Average gaining 0.6% to 53062, and the Nasdaq Composite advancing 0.5% to 26218. Small-cap stocks, as measured by the Russell 2000, outperformed with a 1.13% increase. In contrast, European markets generally closed lower, with the Euro Stoxx 50 down 0.1% and the FTSE 100 down -0.3% to 10757. Asian markets also saw broad declines, notably South Korea's KOSPI tumbling down -4.0% to 6563 and Japan's Nikkei 225 sliding down -2.9% to 64326, influenced by higher oil prices and global bond yields.

Major Government Bonds

US Treasury yields pulled back modestly from recent multi-year highs, with the 10-year Treasury yield settling around 4.8% after briefly touching 4.818%, and the 2-year yield declining by approximately 3 basis points to 4.37%. In Europe, German 10-year government bond yields rose to 3.4%, a record high since April 18, 2011, while the spread between French and German 10-year bonds widened to 88 basis points, reaching a high not seen since the 2012 Eurozone debt crisis. Japanese 10-year government bond yields increased to 3.0%, a record high since September 9, 1996, continuing their ascent above 3%.

Major Commodities

Crude oil prices experienced choppy trading but ultimately settled higher, reaching five-week highs as the US-Iran conflict continued to escalate; WTI crude rose 0.6% to $90.7 per barrel, and Brent crude gained 1.04% to $95.63 per barrel. This rise was supported by a surprise draw in US crude oil inventories, which decreased by 4.5 million barrels. Gold prices rebounded by 0.9% to $4435.4 per ounce, snapping a three-day losing streak, benefiting from a weaker US dollar, with the US Dollar Index down -0.1% to 99.6, and easing Treasury yields. Meanwhile, copper prices rose 1.5% to $6.6, and iron ore down -1.6% to 715.0.

Macroeconomics

Geopolitical tensions escalated significantly following U.S. strikes on Iranian targets and reported attacks on oil tankers in the Strait of Hormuz, triggering broad market anxiety. U.S. economic data showed the August ISM Manufacturing PMI decreased to 54.6, with the Prices Paid index remaining high at 71.1, while July JOLTS job openings fell to 7.271 million, indicating some cooling in the labor market. In the Eurozone, August HICP rose to 3.3% year-on-year, its highest since September 2023, though core inflation surprisingly eased to 2.4%, and the July unemployment rate stood at 6.4%. Fed Governor Barr's hawkish comments reinforced concerns about further rate hikes if inflation persists.

Major Stock Markets

Major global stock markets experienced a broad decline, primarily driven by escalating geopolitical tensions in the Middle East, a sharp rise in oil prices, and surging government bond yields which reignited inflation fears. In the U.S., the S&P 500 fell -0.7% to 7631, the Dow Jones Industrial Average dropped -0.8% to 52767, and the Nasdaq Composite declined -1.0% to 26100, with technology and growth sectors particularly affected. European equities also closed lower, with the German DAX falling -1.1% to 25970, the UK FTSE 100 down -0.3% to 10789, and the French CAC 40 declining -0.4% to 8302.

Major Government Bonds

Global government bond markets experienced a significant sell-off, pushing yields higher across the board amid renewed inflation concerns and expectations of tighter monetary policy. The U.S. 10-year Treasury yield rose 0.04 percentage points to 4.8%, reaching a record high, while the 30-year yield climbed to approximately 5.3%, touching multi-decade highs. In Europe, the German 10-year bond yield increased 0.01 percentage points to 3.3%, a record high, and the UK 10-year yield surged 16 basis points to 5.22%. Japan's 10-year government bond yield also rose 0.06 percentage points to 3.0%, a record high, reflecting a broad global repricing of interest rate risk.

Major Commodities

Crude oil prices surged dramatically due to escalating geopolitical tensions in the Middle East, including U.S. strikes on Iranian targets and reported attacks on oil tankers in the Strait of Hormuz, fueling concerns about supply disruptions. WTI crude oil futures rose 6.0% to settle at $90.9 per barrel, while Brent crude spiked over 4% to settle around $94 per barrel. Conversely, gold prices were down -2.4% to settle at $4375.7 per ounce, as rising government bond yields and a stronger U.S. dollar, which rose 0.2% to 99.7, weighed on the precious metal.

Job Openings Overview

The latest data from the US Job Openings and Labor Turnover Survey (JOLTS) indicates that job openings in July were reported at 7,271,000, falling short of the forecasted 7,330,000. This marks a slight increase from the previous month's figure of 7,182,000.

Job Openings Rate

The job openings rate rose slightly to 4.4% from the previous 4.3%.

Components Details

• Quits Rate: The quits rate decreased to 1.9% from the previous 2.0%.
• Hires Rate: The hires rate dropped to 3.2% from 3.4% previously.
• Layoffs Rate: The layoffs rate saw a slight decline to 1.0% from 1.1%.

Highlight

The Institute for Supply Management (ISM) reported that the Manufacturing Purchasing Managers' Index (PMI) for August stood at 54.6, a decline from July's 55.6 and below the forecasted 55.2. This indicates a slower growth rate in the manufacturing sector than anticipated.

Components

• New Order: Decreased to 53.7 from 56.7.
• Employment: Dropped to 51.2 from 52.8.
• Supplier Deliveries: Increased slightly to 59.3 from 58.9.
• Customers' Inventories: Rose to 42.8 from 40.7.
• Backlog of Orders: Fell to 51.8 from 55.0.
• Imports: Declined to 52.5 from 55.7.
• Price: Remained unchanged at 71.1.

Macroeconomics

Geopolitical tensions escalated as the U.S. and Iran exchanged military strikes, reigniting inflation concerns. Fed Chair Kevin Warsh's hawkish comments continued to influence markets, with CME FedWatch indicating a 65% probability of a September rate hike. Economic data showed Germany's August HICP annual rate rising to 2.9% from 2.8%, while core HICP remained at 2.4%. China's August Manufacturing PMI improved slightly to 49.8%, still in contraction, and the non-manufacturing PMI held at 49.0. In the U.S., the Dallas Fed Manufacturing Index jumped to 11.6 in August, the highest since January 2025, though its employment index fell and raw materials prices paid index rose.

Major Stock Markets

Major U.S. equity indices closed lower, with the S&P 500 down -0.3% to 7686, the Dow Jones Industrial Average down -0.7% to 53186, and the Nasdaq Composite down -0.1% to 26371. European markets also saw declines, with the Euro Stoxx 50 dropping 1.01% and Germany's DAX down -1.2%. Asian markets were mixed, as Shanghai gained 0.4% and Seoul rose 0.5%, while Tokyo edged lower, down -0.1%, and Hong Kong edged lower, down -0.1%. Energy stocks outperformed due to surging oil prices, but California utilities PG&E and Edison International plunged over 20% each after lawmakers blocked a proposal to shift wildfire liability. Amazon also fell 2.5% following news of an impending FTC antitrust lawsuit.

Major Government Bonds

Government bond yields rose significantly, reflecting increased inflation fears and heightened rate hike expectations. The U.S. 10-year Treasury yield climbed 0.04 percentage points to 4.8%, reaching a record high since January 2025. The German 10-year Bund yield also advanced 0.05 percentage points to 3.3%, marking a record high since April 2011. Yield curves generally steepened as longer-term yields saw larger increases.

Major Commodities

Oil prices surged sharply due to renewed military actions between the U.S. and Iran, which raised concerns about potential supply disruptions in the Strait of Hormuz. WTI crude futures rose 3.4% to $86.2 per barrel, while Brent crude futures gained 2.71% to $90.49 per barrel, pushing Brent back above the $90 mark. Conversely, gold prices fell for a second consecutive day, declining -0.6% to $4501.5 per ounce, pressured by rising bond yields and a stronger outlook for interest rate hikes.