In the Eurozone, ECB’s Schnabel sees money market rates rising as system reserves decline, with banks then turning to the ECB for liquidity. It is part of the plan and could happen in mid-2026, but is more likely to happen later. Meanwhile, US Treasuries are being buffeted by contrasting impulses. It's been quite a week, but we broadly end where we started
Global bond yields are pushing lower amidst a broader flight to safety, with Gilts leading the way. Even now, Gilt yields still seem high, driven by a hawkish Bank of England and a material risk premium. Gilt swap spreads were more sensitive to French turmoil than to dynamics in US Treasuries or Bunds, but this should change with more budget certainty
Log in to today's North American session Market wrap for October 6th
The week opens on the typical 2025 trade: Metals, propelled by Gold (1.90%) and Palladium (4.50%!), Cryptocurrencies, and Tech rage higher.
A week dominated by central bank communications and seasonal dynamics kept investors on edge, even as the UN General Assembly passed without major geopolitical surprises except for some memorable US President Trump quotes.
Jobless claims dropped back sharply yesterday, a rare positive development for the US jobs market and the dollar. But we still think the greenback is due to give up its post-Fed gains in the near term. Meanwhile, the Bank of Japan surprised with a hawkish vote split as it held rates unchanged today, raising the chances of an October hike and JPY outperformance
The week started slowly in the US and Canada as markets were closed for the Labour Day holiday.
Having enjoyed a brief session on Friday of unalloyed joy as Fed Chair Jerome Powell hinted at a September rate cut, financial markets may now face some uncertainty on political developments in France and the US. We're still happy with a bearish story for the dollar, but it might have to be the more defensive Japanese yen or Swiss franc which takes the lead now
Trigger warning: this article contains the greatest puns you'll ever read on this website. Oh, and James Smith's look at the week ahead...
The Big Beautiful Bill passed in US Congress, putting even more pressure on the fiscal outlook and thus longer-dated USTs. US payrolls came in better than expected, contributing to higher yields across the curve. The ECB minutes show more members are concerned about undershooting inflation, keeping the 1.75% market-implied landing zone firmly intact
The Bank of Canada cut this week, facing potential economic headwinds from trade policy uncertainty. While growth has improved over the last two quarters, the BoC noted that it expected the trade conflict with the US to weigh on economic activity, while also increasing prices and inflation.
US Treasury yields have been on a rollercoaster this year. But we expect the appeal of borrowing strategies to rise as the global rate-cutting cycle continues. Borrowing can form part of a financial plan, subject to awareness of its risks.
Gold started 2025 on a strong footing, following a stellar performance in 2024. Barring possible setbacks, we believe that underlying factors will continue to support gold this year.
