Market Perspectives
Iran's foreign minister offered at the UN General Assembly to reopen the Strait of Hormuz on the seventh day of a ceasefire, in return for an end to the US naval blockade and oil sanctions and the release of frozen assets, with nuclear talks only afterwards; Washington did not accept it and Secretary of State Rubio declined to call it a breakthrough. WTI fell 7.9% to $92.41 and Brent went back below $100, and gold lost 2.34%. Yet the 10-year Treasury still rose 18 basis points to 5.18%, a 19-year high, and the 30-year reached its highest since 2004, breaking the correlation with oil that had dominated September: S&P purchasing managers' surveys came in at their strongest since 2022 with prices paid soaring, the five- and seven-year auctions cleared above expectations, and Governor Barr and New York Fed President Williams both pointed to another increase. Cheaper energy lifted equities, with the Nasdaq up 2.06% and the S&P 1.21%,…
Subscribe to continue reading.
BONDS & MACROECONOMICS
The 10-year Treasury yield closed at 5.18%, up 18 basis points on the week and touching 5.225% intraday, its highest since 2007; the 30-year reached 5.502%, the highest since 2004, and the five-year rose 20 basis points to 5.06%, leaving most benchmark maturities at or above 5%. The move came despite an almost 8% fall in crude, breaking the tight Treasury-oil correlation of earlier in the month. Drivers were domestic: S&P US purchasing managers' indices at their highest since 2022, consistent with close to 5% annual growth and with prices paid soaring; five- and seven-year auctions clearing above expectations; hawkish remarks from Governor Michael Barr, who said further policy adjustments are likely to be needed, and New York Fed President John Williams, who said another increase may be appropriate by year-end; and data-centre borrowing competing with Treasury issuance. Futures priced better than even odds of hikes at both the October and December meetings. The average yield on global government debt reached about 4%, the highest since 2007, and Japanese government bond yields returned to 1996 levels. The dollar index hit an eight-week high of 101.40 and the euro fell almost 1% to about 1.1375.
The information transmitted is intended only for the person(s) or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender and delete the material from any computer.
This communication is for informational purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. All market prices, data and other information are not warranted as to completeness or accuracy and are subject to change without notice. Any comments or statements made herein do not necessarily reflect those of Wealth Advisory Partners Ltd, or its affiliates. Wealth Advisory Partners Ltd and its affiliates do not assume any liability whatsoever for the content of this email or make any representations or warranties as to the accuracy and completeness of any information contained in this email.