Market Perspectives
September nonfarm payrolls rose just 29,000 against an 84,000 forecast, unemployment went to 4.2%, downward revisions to the PCE data showed inflation softer this year than previously thought and consumer confidence fell to 81.9, its lowest since 2014. The probability of an October Federal Reserve increase collapsed from roughly 70% to around 20%. Bonds did not follow: the 10-year Treasury hit 5.33% and the 30-year around 5.67%, both the highest since 2002, as deficits, heavy issuance, inflation and AI-related borrowing kept pressure on the long end. France came under pressure, the OAT-Bund spread reaching 154 basis points, the widest since 2011, with public debt at 119% of GDP. US equities ended mixed, the Nasdaq clinching a record high on semiconductor and software strength while the Dow fell 1.26%, and only around 25% of S&P 500 constituents trade above their 50-day moving averages.…
Subscribe to continue reading.
BONDS & MACROECONOMICS
US Treasuries endured another punishing week at the long end of the curve. The 30-year yield topped 5.61% on Tuesday and reached around 5.67% on Thursday while the 10-year hit 5.33%, both their highest levels since 2002, before paring some of the increase on Friday; the 10-year closed the week at 5.273%, the UK gilt at 5.365% and the German Bund at 3.458%. The sell-off has been driven not only by monetary policy expectations but by persistent inflation, large fiscal deficits, heavy government issuance and the borrowing requirements associated with the AI investment boom, making 5% on the 10-year the level to watch as a floor rather than an extreme. Softer data cut the odds of an October Fed increase to around 20% from roughly 70% a week earlier, after New York Fed President John Williams said there was no need for urgency and Philip Jefferson and Michelle Bowman argued for more time. Euro area inflation rose to 3.8% in September, the highest since September 2023. The dollar sits roughly 3% above its September low and the euro fell to 1.1255, its weakest since May 2025, pushing gold 3.35% lower. Asset managers added more than 100,000 outright 10-year futures shorts in the week through 22 September, one of the largest increases since 2023.
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.