Market Perspectives
The 10-year Treasury yield closed back below 5% at 4.987%, down 11 basis points for a third consecutive weekly decline, but equities did not read it as relief: the fall was driven by safe-haven demand out of technology rather than any change in the policy path, with October expected to be a hold and December carrying 71% implied odds of a rise. The rotation completed instead, the Russell 2000 gaining 2% and the Dow 0.41% while the Nasdaq fell 0.71% and the semiconductor index extended its monthly decline to 15%. Brent reached $116.72, a six-month high, up 6.2% on the week, after Trump said Washington is not negotiating with Tehran and Saudi Aramco reportedly told staff to evacuate its Dhahran headquarters. Gold was the outlier, falling 1.29% to $4,007.90 into an oil spike and a bond rally. In Europe, Volvo Car fell 26% to its lowest level ever on Chinese revenue down near 50% and Kering dropped as much as 16%.
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BONDS & MACROECONOMICS
The 10-year Treasury yield fell 11 basis points to 4.987%, back below 5% for the first time in weeks and declining for a third consecutive week, with the two-year down 18 basis points over four weeks. The move came from safe-haven demand as money left technology rather than from any shift in the policy path: October is expected to be a hold and December carries a 71% implied probability of an increase. A yield that falls on flight rather than disinflation reverses when the equity selling stops. Brent rose 6.2% on the week to $116.72, a six-month high, and WTI's December contract 4.3% to $103.27, after Trump said the US is not negotiating with Tehran, American and Israeli officials were reported to have drawn up plans for strikes after the midterms, and Saudi Aramco reportedly told staff to evacuate its Dhahran headquarters. Gold fell 1.29% to $4,007.90 despite the energy shock and the bond rally, with the euro easing to 1.1193. France's 10-year yield reached a 24-year high.
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