2026 09 25

Global Financial Briefing — Friday, 25 September 2026

Americas index levels, commodities and day changes reflect the 25 Sep closing prices, and the US Treasury curve is the 25 Sep close; FX and macro figures are dated inline.

Market Overview

The longest-dated US yields kept rising today even though oil fell, while shorter ones fell. The 30-year Treasury settled at 5.49%, up 2 bp, and the 10-year at 5.17%, down 1 bp, while the 2-year fell 6 bp to 4.81% and the 5-year 5 bp to 4.98% (US Treasury par curve, 25 Sep). During the session the long end reacted to the University of Michigan's final September survey: consumers now expect prices to rise 4.6% over the next year, up from 4.0% in August and the highest since June, and the survey's sentiment index sat at 48.1, down from 51.7 in August. The 30-year was up about 6 bp by early afternoon before settling 2 bp higher. The curve steepened because the 2-year fell 6 bp while the 10-year slipped only 1 bp: the gap between them widened to 36 bp from 31 bp. Futures prices put the chance of a further Fed rate rise in October, after the 16 September hike to 3.75–4.00%, at about 70% on 25 September, up from about 53% earlier in the week (Investing.com).

Oil went the other way. The December Brent contract (BZZ26) settled at 97.44, down 2.77% on its 24 September settlement, and WTI settled 2.33% lower at 92.41, after reports that the US and Iran, with Qatar mediating on the sidelines of the UN General Assembly, are discussing a phased deal to reopen the Strait of Hormuz and lift the US blockade of Iranian ports. Iran still says it must keep control of the strait. Lower oil helped shares: the S&P 500 closed up 0.51%, the Nasdaq 100 up 0.42% and the Dow up 0.93%, with industrials the strongest US sector (+0.95%) and communication services (−0.90%) and energy (−0.89%) the weakest. The Nasdaq 100 is 0.50% below its record close.

Europe closed mostly higher: the STOXX 600 rose 0.35% and the DAX 0.56%, while the CAC 40 slipped 0.04%, still 3.7% below its 50-day average. German yields rose most at the long end: the 30-year Bund is quoted at 3.91%, about 6 bp above yesterday evening's quote, and the 10-year about 2 bp higher at 3.61%, while the 2-year eased 1 bp to 3.26%. The French 10-year OAT was flat at 4.73%, so its premium over the Bund narrowed slightly to 112 bp from 113 bp. In Asia, the Nikkei 225 rose 1.30% and the yen had its best day in a week, the dollar falling 0.95% to 157.27 yen, after Finance Minister Satsuki Katayama said President Trump had raised concern about the weak yen at his summit with Prime Minister Sanae Takaichi. Hong Kong fell 1.01%, led by technology shares, as the Trump-Xi summit produced a two-month extension of the US-China trade truce but no progress on AI, Taiwan or Iran. Mainland China, Taiwan and Korea were closed for holidays.

Global Indices Snapshot

Americas

Americas data reflects the 25 Sep close. The S&P 500 is 0.94% below its record of 7,816.70 and 1.46% above its 50-day average (7,632). The Nasdaq 100 is near its record high, 0.50% below it.

Europe

European data reflects today's close (25 Sep). All five indices remain below their 50-day averages: the FTSE by 0.65%, the STOXX 600 by 1.49%, the DAX by 1.51%, the SMI by 2.28% and the CAC 40 by 3.71%. The CAC is also 1.99% below its 200-day average (8,242); the others are above theirs. The Euro STOXX 50 closed at 6,302.82, up 0.48%.

Asia-Pacific

Asia-Pacific data reflects today's close (25 Sep) except where marked. ‡ Shanghai Comp: data reflects the 24 Sep close. Press reports (Investing.com) say mainland China was closed for a holiday today. † Kospi: 25 September is Chuseok, market closed today; the level is the 23 September close.

Emerging Markets

EEM and EZA are US-listed dollar funds; figures are the 25 Sep New York close. The Nifty 50 closed 25 Sep, 4.3% above its 52-week low of 22,182.55.

Index Valuations & Investment Risk

Valuation Table

Trailing P/E from Yahoo Finance on the ETF proxies SPY, QQQ, EXSA.DE, CAC.PA, EXS1.DE, ISF.L, 1321.T and EEM. Averages of the daily trailing P/E readings recorded since 1 May 2026 (n = 97); shown for reference only.

Investment Risk Assessment for ETF Investors

United States (S&P 500 / Nasdaq ETFs)

The S&P 500 at 24.9x trailing earnings has an earnings yield of 4.01% (1÷24.91). Against the 10-year Treasury at 5.17% (US Treasury par curve, 25 Sep) the earnings yield gap is negative 1.16 pp: a buyer today accepts equity risk for 1.16 pp less current income than a ten-year bond pays. Against the 10-year real yield of 2.83% (US Treasury real curve, 25 Sep) the gap is positive 1.18 pp. The difference is the 2.34 pp of expected inflation that the nominal comparison leaves out: company earnings can grow with inflation, a fixed coupon cannot. Only part of the earnings yield reaches an investor as cash (dividends and buybacks); the rest is reinvested by the companies. The Nasdaq 100 at 30.4x earns 3.29%, 1.88 pp below the Treasury.

The index is 0.94% below its record and above its 50-day (7,632) and 200-day (7,201) averages, so prices still sit close to their highs while the 10-year yield they compete with has risen 51 bp since 26 August (4.66% to 5.17%). A higher real yield raises the rate at which future profits are discounted, and that falls hardest on the highest-valued shares, such as the Nasdaq 100's at 30x earnings.

Risk score: High valuation risk / low margin of safety.

Europe (STOXX 600 / CAC 40 / DAX ETFs)

The STOXX 600 at 17.6x earns 5.69%, a gap of positive 2.08 pp over the 10-year Bund at 3.61% (TradingEconomics, 25 Sep intraday), and positive 4.16 pp over the euro real 10-year of 1.53%. The DAX at 18.0x earns 5.56% (+1.95 pp over the Bund). The CAC 40 at 16.5x earns 6.07%; measured against France's own 10-year borrowing cost, the OAT at 4.73%, its gap is positive 1.34 pp, the narrowest of the three. The STOXX 600 trades at 17.6 times earnings against the S&P 500's 24.9.

Part of the difference between the US and euro gaps is the difference between US and euro-area inflation and policy paths rather than a difference in reward for risk, so the real-yield versions are the check: +1.18 pp for the US against +4.16 pp for the euro area. Europe's advantage survives. For a euro investor holding euro-quoted funds, the quoted value carries no currency conversion, but currency risk still sits inside the earnings: many CAC 40 and STOXX 600 companies earn a large share of their profits outside the euro area, so a stronger euro lowers those profits in euro terms. The French risk is unchanged: the OAT pays 112 bp over the Bund and 23 bp more than Italy's 10-year (4.50%).

Risk score: Moderate, fair value with mixed signals.

Japan (Nikkei / TOPIX ETFs)

The Nikkei at 22.0x earns 4.54%, a gap of +1.47 pp over the 10-year JGB at 3.07% (TradingEconomics, 25 Sep), which touched 3.115% during the day, its highest since 1996 according to Investing.com. The Bank of Japan raised its policy rate to 1.25% on 18 September, its second rise this year after the 16 June move to 1.00% from 0.75%. Today's yen rebound matters for a euro investor in an unhedged Japanese fund: the fund is partly a bet on the yen, and Katayama's disclosure that the US president shares Tokyo's concern about the weak yen makes further official action to support it more likely. A currency-hedged fund removes that exposure.

Risk score: Moderate.

Emerging Markets (MSCI EM ETFs)

EEM at 14.4x earns 6.93%, the highest earnings yield in the table and a clear discount to developed markets. EEM rose 1.09% in New York, but the local markets that traded today were mixed (Hang Seng −1.01%, Nifty 50 +0.34%) and Taiwan, Korea and mainland China, together much of the index, were closed for holidays. Today's EEM move is therefore New York's valuation of emerging markets on lower oil and a weaker dollar, not what those markets did; it will be confirmed or not when they reopen. A weaker dollar (the ICE dollar index down 0.23%) helps emerging-market shares because companies and governments with dollar debt pay less to service it. Higher US real yields work the other way, drawing capital towards US bonds, and at 2.83% on 25 September the 10-year real yield was 2 bp below the week's high of 2.85% on 24 September. For a euro investor the dollar is only the fund's quoting currency: what matters is how the emerging-market currencies move against the euro.

Risk score: Attractive relative valuation, with high rate and currency sensitivity.

Overall Risk Score: Moderate. Valuations are high in the US and reasonable elsewhere, but a 10-year Treasury above 5% raises the income every equity market has to beat.

US Economic Indicators (FRED - authoritative)

Headline inflation is running almost a point above core, the gap that oil near $100 keeps open.

Other economic releases today (US Census Bureau, University of Michigan):

The Michigan survey asks households about their finances and about the prices they expect to pay. The sentiment reading is near historic lows, with views of personal finances down about 10% on the month, and the year-ahead inflation expectation jumped 0.6 points in a month. Central banks watch that figure because expected inflation can feed into wage demands and pricing, and it is what bond investors reacted to today. Durable goods orders were flat, better than the small fall expected, but orders excluding transport, the steadier measure of business investment, grew by half as much as forecast.

Fixed Income & Bond Analysis

Policy Rates

The Fed raised its target range to 3.75–4.00% on 16 September, its first hike since 2023. The ECB deposit rate has been 2.50% since 10 September, its second hike this year after 17 June's move to 2.25%. Markets priced about an 80% chance on 25 September that the Bank of England raises rates in November (TradingEconomics).

Government Bond Yields

USA row: 25 Sep settled close vs 24 Sep, one date for the whole row. European, UK and Japanese yields are quotes around 19:55 CEST, and their changes are against the same source's quotes around 20:05 CEST on 24 Sep.

Yield Curve Spreads (US Treasury par curve, 25 Sep):

• 10Y-2Y spread: +36 bp. Positive and outside the ±25 bp range usually called flat: the curve slopes upward and is not inverted. It widened 5 bp on the day as the 2-year fell 6 bp and the 10-year only 1 bp.
• 10Y-3M spread: +93 bp. Firmly positive and not a recession signal. The 3-month bill at 4.24% sits 37 bp above the Fed funds midpoint of 3.875%, which is the bill market expecting the Fed to raise rates again within the next few months.

OAT-Bund Spread: 112 bp (France 4.73% less Germany 3.61%, TradingEconomics, 25 Sep intraday), down from 113 bp on 24 September but up from 104 bp on 22 September. Italy's 10-year pays 89 bp over the Bund, so France still pays 23 bp more than Italy. Today the Bund rose about 2 bp while French and Italian yields barely moved, which is what narrowed both spreads.

Yield Curve Charts

The US curve slopes upward from 4.24% at 3 months to 5.54% at 20 years, dipping slightly to 5.49% at 30 years. Since 26 August it has risen 62 bp at the 2-year (4.19% to 4.81%), 51 bp at the 10-year (4.66% to 5.17%) and 31 bp at the 30-year (5.18% to 5.49%), so over the month the short end has risen most, led by the Fed's September hike and the expectation of more.

The euro AAA curve slopes upward from 2.61% at 3 months to 3.81% at 20 years, dipping to 3.74% at 30 years. Since 25 August it has risen 48 bp at the 2-year (2.75% to 3.23%) and 32 bp at the 10-year (3.24% to 3.57%), again led by the short end after the ECB's 10 September hike. Today's Bund quotes (amber) sit 3 to 5 bp above the plotted 24 September curve out to 10 years, but 17 bp above it at 30 years (3.91% against 3.74%). The curve is the ECB's fitted AAA euro-area curve and the quotes are individual German bonds, which normally sit a few bp apart; yesterday the 30-year gap was 9 bp, so roughly 6 to 8 bp of today's gap is a genuine rise in long German yields.

Credit Markets (from FRED, authoritative)

Change is 24 Sep vs 23 Sep.

Credit spreads are the 24 Sep close; today's session is not in them yet. On 24 September, when the 10-year settled 7 bp higher and European shares fell about 0.5%, all three spreads widened, euro high yield the most at 11 bp. They remain historically tight: US high yield at 280 bp is below the 300–500 bp normal range and investment grade at 79 bp just below its 80–150 bp range, so lenders are still charging companies little extra for default risk. The VIX, at 14.21 (FRED VIXCLS), is low, but its latest reading is 22 September and does not include this week's bond selloff.

Real Yields (US and Euro Area)

The US leg is dated 25 September (US Treasury curves) and the euro leg 24 September (ECB AAA curve). Only the US real yield is a traded market price; the euro figure is derived from a survey and is the softer of the two. The US breakeven also carries an inflation risk premium that a survey does not, and the SPF horizon is 5 years against the bond's 10. The 160 bp nominal gap between the two 10-year yields splits into 30 bp of expected-inflation difference and 130 bp of real-rate difference, so it is overwhelmingly a difference in real rates. The US real yield fell 2 bp on 25 September (2.85% to 2.83%), slightly more than the 1 bp fall in the nominal yield, so US expected inflation edged up 1 bp to 2.34% on the day households reported higher inflation expectations.

Why the US real-yield advantage is not a return a euro investor can capture

A 2.83% real yield is real in dollars, above US inflation, not above euro inflation. A euro investor who hedges a Treasury back into euros pays away the interest-rate difference in the cost of the hedge, leaving a return close to the euro bond's; unhedged, the extra yield becomes a bet on the dollar rather than a bond decision. The gap describes the two economies' different policy stances and growth expectations and is not a reason to switch into US bonds.

Bond Portfolio Implications

The earnings yield gap compares today's income on each asset, using quoted prices only; it leaves out earnings growth and does not forecast which will do better.

• S&P 500: 4.01% earnings yield (1÷24.91) less the 10-year Treasury at 5.17% = −1.16 pp. Bonds pay more current income than US equities. Against the real yield the gap is +1.18 pp; the difference is expected inflation, which the earnings behind a share can grow with and a fixed coupon cannot.
• Euro area: 5.69% earnings yield (1÷17.59) less the Bund at 3.61% = +2.08 pp; +4.16 pp against the euro real yield of 1.53%.

With the Treasury above 5%, a US investor can lock in more nominal income from a government bond than from the S&P 500's earnings. In Europe, equities still out-earn the Bund comfortably.

A 10 bp rise in yields is an ordinary day's move. At the settled 25 September par yields it costs:

On 25 September the 2-year's 6 bp fall added about 0.1% to its price and the 10-year's 1 bp fall about 0.08%, while the 30-year's 2 bp rise cost about 0.3%: the loss fell at the long end, where each basis point costs the most. A 2-year note yields 4.81% for a quarter of the 10-year's day-to-day price risk, and while investors keep demanding more yield for lending long, shorter maturities offer most of the income for much less of the loss on each bad day.

Currencies & Commodities

Currencies

FX quotes as of 19:51 CEST (dollar index 19:41); day change vs the previous 17:00 ET close.

The yen was the day's mover, breaking a five-session losing run (TradingEconomics). Katayama said Trump raised the weak yen with Takaichi and that she told him an undervalued yen is, as a general principle, a problem; with Japan and the US having intervened jointly in July to support the yen, investors read the disclosure as a warning that they could do so again. A weak yen raises the cost of Japan's energy imports at a time when oil is already expensive. The dollar eased against the euro and sterling but rose against the franc.

Commodities

Day changes are settlement (25 Sep) vs the prior session's settlement (24 Sep).

A note on which contracts these are. The Brent row is the December contract (BZZ26); yesterday's table showed the November contract (BZX26), which settled at 106.60 on 24 September and expires on 30 September. The two levels are not comparable: December settled at 100.22 on 24 September, and the gap between the two months is the premium the market pays for oil delivered sooner, not a price move. The −2.77% compares December with its own previous settlement. WTI is the November contract (CLX26), expiring 20 October, and natural gas is also November (NGX26), expiring 28 October.

Oil fell on the reports of a phased US-Iran deal to reopen Hormuz. Brent is 22.7% below its 52-week high of 126.10 and WTI 22.7% below its own of 119.48. Natural gas fell 4.30% to 3.225, in the lower half of its 52-week range (2.483 to 7.827). Gold at 4,321.20 is 22.6% below its all-time high of 5,586.20 (29 January 2026) and rose 0.54% as the dollar eased. Silver at 64.80 is 46.6% below its all-time high of 121.30, set the same day. Copper at 6.766 is 0.94% below its record of 6.830, set on 22 September.

Crypto: Bitcoin was little changed at about $83,700 (Yahoo Finance).

Sector & Theme Highlights

US sector funds on the day: industrials +0.95% (XLI), technology +0.80% (XLK), financials +0.57% (XLF), health care +0.49% (XLV), consumer staples +0.44% (XLP), utilities +0.38% (XLU), materials +0.24% (XLB), consumer discretionary +0.22% (XLY), real estate −0.22% (XLRE), energy −0.89% (XLE) and communication services −0.90% (XLC). Energy fell with oil.

• Long end up, short end down: Germany's 30-year Bund rose about 6 bp to 3.91% and Japan's 10-year touched its highest since 1996 during the session, while 2-year yields fell in the US and Germany. The US 30-year settled only 2 bp higher at 5.49%. Inflation worry is the recorded reason: US households now expect 4.6% over the next year.
• Oil and Hormuz: each report on the US-Iran talks moves Brent by several dollars. A reopened strait would lower headline inflation, which in August ran at 3.35% against 2.45% core, and would be the clearest relief for bonds.
• Yen: Katayama's disclosure of Trump's concern about the weak yen, made public for the first time at a regular news conference, adds a political signal to the July intervention; for euro investors in Japanese shares, the hedging decision matters more than usual.
• US-China: the two-month trade truce extension removes a near-term tariff risk but left technology export controls unresolved, and Hong Kong technology shares fell more than 2% to a three-month low (Business Recorder).

Top Stories (Global)

• US households' inflation expectations rose to 4.6% for the year ahead in the University of Michigan's final September survey, from 4.0% in August. The 30-year Treasury rose about 6 bp during the session and settled 2 bp higher at 5.49%, while the 2-year fell 6 bp to 4.81% and the 10-year eased 1 bp to 5.17%; futures priced a 70% chance of an October Fed hike on 25 September.
• Oil fell more than 2% on reports that US and Iranian negotiators, with Qatari mediation at the UN, are discussing a phased reopening of the Strait of Hormuz and a lifting of the US blockade; Iran insists on keeping control of the strait.
• The yen rose 0.95% against the dollar after Japan's finance minister said President Trump had voiced concern about the weak yen at his summit with Prime Minister Takaichi.
• Trump and Xi extended their trade truce by two months, according to Treasury Secretary Bessent, but made no progress on AI, Taiwan or Iran; the Hang Seng fell 1.01%, led by technology shares.
• Costco beat estimates, with earnings of $6.75 a share against $6.53 expected and revenue of $95.72 billion against $94.88 billion.
• Bank of America downgraded Nike to Underperform with a $30 price target; the shares are down 43% this year and trade at about $36, levels last seen in 2014.
• US durable goods orders were flat in August at $338.6 billion, against a 0.3% fall expected; orders excluding transport rose 0.3%, below the 0.6% forecast.

Looking Ahead

• Tuesday 29 September: US consumer confidence and JOLTS job openings (10:00 ET).
• Wednesday 30 September: US GDP and personal income and outlays, including the PCE price index the Fed targets (08:30 ET). With futures pricing a 70% chance of an October hike on 25 September, PCE is the next test of that expectation.
• Thursday 1 October: US ISM manufacturing and weekly jobless claims; the September employment report follows on Friday 2 October.
• Middle East: any progress, or setback, in the US-Iran talks on Hormuz moves oil, and through oil the inflation outlook and bond yields.
• Yen: whether Tokyo follows Katayama's remarks with action as the dollar trades near 157 yen.
• Asia reopening: Korea, Taiwan and mainland China return from holidays, and their first sessions will show whether EEM's +1.09% in New York today holds locally.
• France: budget and fiscal news, with the OAT-Bund spread at 112 bp.

Market closures - Wednesday 30 September: Canada, National Day for Truth and Reconciliation (public holiday). - No Indian holiday data is available here, so Indian closures are not checked.