Government bond markets remained under pressure yesterday as yields rose further – albeit this was mostly concentrated at the long-end of curves – with the benchmark US 10-year yield climbing to its highest level (5.20%) since 2007. In FX, the dollar remained in the ascendency, nudging higher again, though the euro and sterling are both marginally firmer against the US currency this morning at around $1.1385 and $1.3225 respectively (versus lows yesterday of about $1.1360 and $1.32). EURGBP continues to edge up, trading just north of the £0.86 level at the start of play.
Yesterday’s Events
Benchmark US 10-year bond yields rose by almost 10bps to multi-year highs, while 2-year yields increased by just a couple of basis points on the day. Short-dated German and UK yields were flat to a touch lower, while 10-year yields increased by around 5bps and 3bps respectively. In equity markets, the S&P 500 managed to erase initial losses to end broadly flat, while European stocks shed around half a percent for a second day running.
A couple of Bank of England MPC members yesterday signalled they may soon support an increase in interest rates. One of these members, Lombardellii, said that, while the indirect effects of the energy price shock “have so far been smaller than expected”, the longer energy prices stay high “the more likely indirect effects are to eventually come through”, hence “on that basis, (monetary) policy is increasingly likely to need to tighten.” Similarly, her MPC colleague, Breeden said “the larger and longer the (energy price) shock, the more likely it is we will see the material second-round effects policy needs to respond to.” The market is currently pricing in about an 85% chance of a 25bp rate hike at the MPC’s next meeting in November.
Fed member Paulson says inflation risks have grown, noting that while tariff-related price pressures have eased, “price pressures from the conflict in the Middle East and the AI buildout” have increased. At the same time, economic growth has “firmed up a little” and the labour market has “strengthened a touch”. She adds that, “if economic conditions evolve as I expect, some modest further (policy) tightening may be warranted.” The market currently sees about a circa 70% chance of a 25bps rate hike at next month’s Fed meeting.
The Day Ahead
For the day ahead, economic data due include money supply/credit growth (August) in the Euro area and capital goods orders (August) and the University of Michigan consumer confidence index (September, final reading) in the US. A number of central bank members, including Bank of England Governor Andrew Bailey, are scheduled to speak over the course of the day.
Author: Mark Cullen
Tel: 1800 30 30 03 / +353 (0)1 790 0000
25 Sep 2026
Todays Talking Points 24.09.26
Market Commentary
A move in oil prices back above $100 per barrel and much stronger than expected Purchasing Managers’ survey data in the US – suggesting the economy is expanding at its fastest pace in over 5 years – resulted in a pronounced hardening of central bank rate hike expectations and a surge in government bond yields. The US led the rise in yields, contributing to some further strengthening of the dollar. The euro and sterling are trading at around $1.1390 and $1.3250 respectively this morning, closing in on their year-to-date lows of $1.1325 and $1.3150 respectively. EURGBP is a touch firmer at the start of play, trading at around £0.86. There will be some market focus on today’s Trump-Xi summit in Washington, with the US Treasury Secretary already announcing a 2-month extension of the ‘trade truce’
Yesterday’s Events
The firming of rate hike expectations – which sees the market now pricing in almost 100bps of hikes by the Fed and ECB, and more than 100bps of hikes by the Bank of England, over the next twelve months or so – resulted in a surge in government bond yields. US 2-year and 10-year yields both rose by around 16bps, while equivalent German and UK yields increased by 10-12bps. Higher yields weighed on equity markets to some extent with US and European stocks off around 0.5% to 0.75% on the day.
The latest Purchasing Managers’ survey data – PMIs – in the US were considerably stronger than expected. The headline PMI rose to 58.7 in September, pointing to the fastest pace of business activity in over five years. Moreover, “employment…rose sharply, with jobs added at a pace not seen for over four years (while) input costs surged on the back of the recent spike in energy prices, adding to a worsening inflation picture”. The equivalent survey data for the Euro area “signalled strengthening growth in the eurozone private sector during September” (the headline index rose to 53.1), alongside rising input cost and output price inflation, while for the UK, the PMIs pointed to continued growth in business activity in September, albeit at a slower pace than in August (the headline PMI fell to 51.7), with price pressures accelerating on the month.
Fed Governor Barr says “economic growth is strong and the labour market is solid (but) risks to achieving our (2%) inflation target have increased.” He adds that, in his base case, “further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.”
The Day Ahead
For the day ahead, economic data due include weekly jobless claims, new home sales (August) and the Q2 current account in the US, while the CBI publishes its latest retail sales survey in the UK. There are a number of Fed, ECB and BoE members scheduled to speak over the course of today.
Author: Mark Cullen
Tel: 1800 30 30 03 / +353 (0)1 790 0000
23 Sep 2026
Todays Talking Points 23.09.26
Market Commentary
The dollar continues to advance on the FX markets and has now gained just over 1% since last Wednesday’s Fed interest rate hike, which has been the clear catalyst for its move higher in the intervening period. The euro and sterling are currently trading at around $1.1425 and $1.3315 against the US currency respectively, leaving them about 1 cent and 2 cents respectively off their lows for 2026 to date set back in June. EURGBP, meanwhile, continues to hover just below the £0.86 level, little changed from yesterday morning.
Yesterday’s Events
Government bond yields in the main markets ended unchanged to marginally higher yesterday, though they are edging down this morning along with the oil price, which has dipped to around $98 per barrel (Trump says a deal with Iran could be reached after the US mid-terms – though he also says he might “annihilate the Islamic Republic”). It was fairly non-eventful in equity markets overall, US and European stocks both closing broadly flat following Monday’s solid gains.
ECB member Nagel says he “cannot exclude if we are being confronted for a longer time with high energy prices, that we have to go into mild restrictive (monetary policy) territory”, although he adds that it’s too early to make a “call on that.” The deposit rate, now at 2.5% after last week’s 25bps hike, is at the top of the ECB’s estimate of the range for the neutral interest rate, while the market sees it heading to 3.25% by June of next year based on current expectations.
Consumer confidence in the Euro area slipped back this month – after rising in each of the four months to August – according to the European Commission’s flash reading, which is not too surprising given the renewed rise in energy prices recently. Sentiment still remains off its lows in April, which followed shortly after the outbreak of the war in Iran.
The Day Ahead
For the day ahead, flash PMIs for September are due in the Euro area, UK and US (we’ve had flash readings for France and Germany already this morning, both of which have come in stronger than expected). A number of ECB and Fed members are due to speak over the course of the day.
Author: Mark Cullen
Tel: 1800 30 30 03 / +353 (0)1 790 0000
22 Sep 2026
Todays Talking Points 22.09.26
Market Commentary
A fall in oil prices – Brent crude dipped below $100 per barrel for a time – contributed to a decent rally in bond and equity markets. Lower oil prices did nothing to dent the dollar though, which is maintaining the firmer tone it’s had since last week’s Fed interest rate hike. That said, there’s not much change in the main currency pairs. The euro and sterling are trading at around $1.1460 and $1.3360 against the US currency this morning, a touch weaker than yesterday morning’s levels. This in turns leaves EURGBP trading at around £0.8575 at the start of play this morning.
Yesterdays Events
Government bonds rallied as oil price fell. German and UK yields declined by around 5-9bps across the curve, while US yields were up to 5bps lower with the benchmark 10-year edging down from the 5% level. Yields generally are nudging up this morning though as oil prices tick higher again. Equity markets had a positive session. The S&P 500 gained for a third day running, adding around 1.5%, while European stocks rebounced from Friday’s fall, advancing by just over 1%.
ECB Chief Economist, Philip Lane, says “we are now witnessing a second wave of (energy) price rises, not only in oil but also in gas…which will lead to higher and more persistent inflation, before a decline towards our 2% target from mid-2027 onwards.” He also notes that the “European economy should continue to grow at a steady but moderate pace, provided the energy shock does not intensify.”
Fed member Goolsbee says “supply shocks have come more frequently, hit harder and lasted longer,” adding that “once supply shocks to inflation become persistent, some of the logic behind ‘looking through’ no longer holds.” He notes that, in such circumstances, “the only way to bring inflation down is to raise interest rates and narrow the gap between supply and demand, even if it’s not in the exact same sectors where the cost shocks are occurring.”
Ahead of next month’s budget in the UK, public finances data published a short while ago show public sector net borrowing was £77bn in the financial year (FY) to August i.e. April-August. This was £2.2 billion (or 2.7%) less than in the corresponding period in 2025 but just over £8bn above the OBR’s forecast for this stage of the financial year. The new Chancellor has said he will stick to his predecessor’s fiscal rules, which won’t allow him much ‘room for manoeuvre’ in his first budget.
The Day Ahead
It is quiet on the economic data front today with consumer confidence (September) due in the Euro area and the ADP weekly employment report scheduled in the US. A number of ECB and Fed members are due on the wires over the course of the day.
Author: Feidhlim Glennon
Tel: 1800 30 30 03 / +353 (0)1 790 0000
21 Sep 2026
Todays Talking Points 21.09.26
MarketCommentary
The dollar advanced over the course of last week, most of its gains coming after the Fed’s hawkish interest rate hike on Wednesday. The euro and sterling both lost a cent or so against the US currency and kick off this week trading at about $1.1475 and $1.3375 respectively. EURGBP traded between £0.8550 and £0.86 last week and opens this morning at around £0.8575. Looking to the week ahead, the main economic data due are Wednesday’s flash PMIs in the main economies, while there is a whole host of central bank members scheduled to speak. Also, Trump and China’s Xi meet in Washington on Thursday.
Yesterdays Events
This month’s round of central bank meetings saw, among others, the Fed and ECB both raise their respective policy rates by 25bps but the Bank of England (BoE) again stay on hold. The market sees a roughly 50/50 chance that the Fed and ECB will hike by 25bps again next month, and about an 85% chance that the BoE will hike by 25bps at its next meeting in November. Looking further out, the market is pricing in circa 75bps of hikes in total from the ECB and Fed, and about 100bps in total from the BoE, by the middle of next year.
Government bond yields in the main markets backed up on Friday, after a respite of sorts on Thursday. The short-end led the way with 2-year yields rising by 6-10bps, while 10-year yields closed 4-7bps higher on the day. A good chunk of the increase in yields is being reversed at the open this morning though, helped by an easing in oil prices with Brent crude slipping to under $102 p/b. Meanwhile, in equity markets, European stocks shed around 1% on Friday, while US indices ended mainly in the black albeit chalking up very modest gains. The futures market points to a positive open for both today though.
The ECB’s latest survey of (Euro area) consumers inflation expectations showed an increase in both short- and medium-term inflation expectations in August. Expectations for inflation over the next 12-months rose to 3% from 2.9% in July, while 3- and 5-year ahead inflation expectations increased to 2.9% and 2.5% respectively from 2.7% and 2.4% in July, all of which will be of some concern to the ECB.
The Day Ahead
For the week ahead, as mentioned, flash PMIs for September are due in the main economies on Wednesday. Euro area consumer confidence (September) and money supply/credit growth (August) are scheduled for Tuesday and Friday respectively, while public finances (August) and consumer confidence (September) and due in the UK on Tuesday and Friday respectively also. In the US, there’s weekly jobless claims on Thursday and capital goods orders (August) on Friday.
Dealer Comments
Todays Talking Points 25.09.26
Market Commentary
Government bond markets remained under pressure yesterday as yields rose further – albeit this was mostly concentrated at the long-end of curves – with the benchmark US 10-year yield climbing to its highest level (5.20%) since 2007. In FX, the dollar remained in the ascendency, nudging higher again, though the euro and sterling are both marginally firmer against the US currency this morning at around $1.1385 and $1.3225 respectively (versus lows yesterday of about $1.1360 and $1.32). EURGBP continues to edge up, trading just north of the £0.86 level at the start of play.
Yesterday’s Events
Benchmark US 10-year bond yields rose by almost 10bps to multi-year highs, while 2-year yields increased by just a couple of basis points on the day. Short-dated German and UK yields were flat to a touch lower, while 10-year yields increased by around 5bps and 3bps respectively. In equity markets, the S&P 500 managed to erase initial losses to end broadly flat, while European stocks shed around half a percent for a second day running.
A couple of Bank of England MPC members yesterday signalled they may soon support an increase in interest rates. One of these members, Lombardellii, said that, while the indirect effects of the energy price shock “have so far been smaller than expected”, the longer energy prices stay high “the more likely indirect effects are to eventually come through”, hence “on that basis, (monetary) policy is increasingly likely to need to tighten.” Similarly, her MPC colleague, Breeden said “the larger and longer the (energy price) shock, the more likely it is we will see the material second-round effects policy needs to respond to.” The market is currently pricing in about an 85% chance of a 25bp rate hike at the MPC’s next meeting in November.
Fed member Paulson says inflation risks have grown, noting that while tariff-related price pressures have eased, “price pressures from the conflict in the Middle East and the AI buildout” have increased. At the same time, economic growth has “firmed up a little” and the labour market has “strengthened a touch”. She adds that, “if economic conditions evolve as I expect, some modest further (policy) tightening may be warranted.” The market currently sees about a circa 70% chance of a 25bps rate hike at next month’s Fed meeting.
The Day Ahead
For the day ahead, economic data due include money supply/credit growth (August) in the Euro area and capital goods orders (August) and the University of Michigan consumer confidence index (September, final reading) in the US. A number of central bank members, including Bank of England Governor Andrew Bailey, are scheduled to speak over the course of the day.
25 Sep 2026
Todays Talking Points 24.09.26
Market Commentary
A move in oil prices back above $100 per barrel and much stronger than expected Purchasing Managers’ survey data in the US – suggesting the economy is expanding at its fastest pace in over 5 years – resulted in a pronounced hardening of central bank rate hike expectations and a surge in government bond yields. The US led the rise in yields, contributing to some further strengthening of the dollar. The euro and sterling are trading at around $1.1390 and $1.3250 respectively this morning, closing in on their year-to-date lows of $1.1325 and $1.3150 respectively. EURGBP is a touch firmer at the start of play, trading at around £0.86. There will be some market focus on today’s Trump-Xi summit in Washington, with the US Treasury Secretary already announcing a 2-month extension of the ‘trade truce’
Yesterday’s Events
The firming of rate hike expectations – which sees the market now pricing in almost 100bps of hikes by the Fed and ECB, and more than 100bps of hikes by the Bank of England, over the next twelve months or so – resulted in a surge in government bond yields. US 2-year and 10-year yields both rose by around 16bps, while equivalent German and UK yields increased by 10-12bps. Higher yields weighed on equity markets to some extent with US and European stocks off around 0.5% to 0.75% on the day.
The latest Purchasing Managers’ survey data – PMIs – in the US were considerably stronger than expected. The headline PMI rose to 58.7 in September, pointing to the fastest pace of business activity in over five years. Moreover, “employment…rose sharply, with jobs added at a pace not seen for over four years (while) input costs surged on the back of the recent spike in energy prices, adding to a worsening inflation picture”. The equivalent survey data for the Euro area “signalled strengthening growth in the eurozone private sector during September” (the headline index rose to 53.1), alongside rising input cost and output price inflation, while for the UK, the PMIs pointed to continued growth in business activity in September, albeit at a slower pace than in August (the headline PMI fell to 51.7), with price pressures accelerating on the month.
Fed Governor Barr says “economic growth is strong and the labour market is solid (but) risks to achieving our (2%) inflation target have increased.” He adds that, in his base case, “further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.”
The Day Ahead
For the day ahead, economic data due include weekly jobless claims, new home sales (August) and the Q2 current account in the US, while the CBI publishes its latest retail sales survey in the UK. There are a number of Fed, ECB and BoE members scheduled to speak over the course of today.
23 Sep 2026
Todays Talking Points 23.09.26
Market Commentary
The dollar continues to advance on the FX markets and has now gained just over 1% since last Wednesday’s Fed interest rate hike, which has been the clear catalyst for its move higher in the intervening period. The euro and sterling are currently trading at around $1.1425 and $1.3315 against the US currency respectively, leaving them about 1 cent and 2 cents respectively off their lows for 2026 to date set back in June. EURGBP, meanwhile, continues to hover just below the £0.86 level, little changed from yesterday morning.
Yesterday’s Events
Government bond yields in the main markets ended unchanged to marginally higher yesterday, though they are edging down this morning along with the oil price, which has dipped to around $98 per barrel (Trump says a deal with Iran could be reached after the US mid-terms – though he also says he might “annihilate the Islamic Republic”). It was fairly non-eventful in equity markets overall, US and European stocks both closing broadly flat following Monday’s solid gains.
ECB member Nagel says he “cannot exclude if we are being confronted for a longer time with high energy prices, that we have to go into mild restrictive (monetary policy) territory”, although he adds that it’s too early to make a “call on that.” The deposit rate, now at 2.5% after last week’s 25bps hike, is at the top of the ECB’s estimate of the range for the neutral interest rate, while the market sees it heading to 3.25% by June of next year based on current expectations.
Consumer confidence in the Euro area slipped back this month – after rising in each of the four months to August – according to the European Commission’s flash reading, which is not too surprising given the renewed rise in energy prices recently. Sentiment still remains off its lows in April, which followed shortly after the outbreak of the war in Iran.
The Day Ahead
For the day ahead, flash PMIs for September are due in the Euro area, UK and US (we’ve had flash readings for France and Germany already this morning, both of which have come in stronger than expected). A number of ECB and Fed members are due to speak over the course of the day.
22 Sep 2026
Todays Talking Points 22.09.26
Market Commentary
A fall in oil prices – Brent crude dipped below $100 per barrel for a time – contributed to a decent rally in bond and equity markets. Lower oil prices did nothing to dent the dollar though, which is maintaining the firmer tone it’s had since last week’s Fed interest rate hike. That said, there’s not much change in the main currency pairs. The euro and sterling are trading at around $1.1460 and $1.3360 against the US currency this morning, a touch weaker than yesterday morning’s levels. This in turns leaves EURGBP trading at around £0.8575 at the start of play this morning.
Yesterdays Events
Government bonds rallied as oil price fell. German and UK yields declined by around 5-9bps across the curve, while US yields were up to 5bps lower with the benchmark 10-year edging down from the 5% level. Yields generally are nudging up this morning though as oil prices tick higher again. Equity markets had a positive session. The S&P 500 gained for a third day running, adding around 1.5%, while European stocks rebounced from Friday’s fall, advancing by just over 1%.
ECB Chief Economist, Philip Lane, says “we are now witnessing a second wave of (energy) price rises, not only in oil but also in gas…which will lead to higher and more persistent inflation, before a decline towards our 2% target from mid-2027 onwards.” He also notes that the “European economy should continue to grow at a steady but moderate pace, provided the energy shock does not intensify.”
Fed member Goolsbee says “supply shocks have come more frequently, hit harder and lasted longer,” adding that “once supply shocks to inflation become persistent, some of the logic behind ‘looking through’ no longer holds.” He notes that, in such circumstances, “the only way to bring inflation down is to raise interest rates and narrow the gap between supply and demand, even if it’s not in the exact same sectors where the cost shocks are occurring.”
Ahead of next month’s budget in the UK, public finances data published a short while ago show public sector net borrowing was £77bn in the financial year (FY) to August i.e. April-August. This was £2.2 billion (or 2.7%) less than in the corresponding period in 2025 but just over £8bn above the OBR’s forecast for this stage of the financial year. The new Chancellor has said he will stick to his predecessor’s fiscal rules, which won’t allow him much ‘room for manoeuvre’ in his first budget.
The Day Ahead
It is quiet on the economic data front today with consumer confidence (September) due in the Euro area and the ADP weekly employment report scheduled in the US. A number of ECB and Fed members are due on the wires over the course of the day.
21 Sep 2026
Todays Talking Points 21.09.26
Market Commentary
The dollar advanced over the course of last week, most of its gains coming after the Fed’s hawkish interest rate hike on Wednesday. The euro and sterling both lost a cent or so against the US currency and kick off this week trading at about $1.1475 and $1.3375 respectively. EURGBP traded between £0.8550 and £0.86 last week and opens this morning at around £0.8575. Looking to the week ahead, the main economic data due are Wednesday’s flash PMIs in the main economies, while there is a whole host of central bank members scheduled to speak. Also, Trump and China’s Xi meet in Washington on Thursday.
Yesterdays Events
This month’s round of central bank meetings saw, among others, the Fed and ECB both raise their respective policy rates by 25bps but the Bank of England (BoE) again stay on hold. The market sees a roughly 50/50 chance that the Fed and ECB will hike by 25bps again next month, and about an 85% chance that the BoE will hike by 25bps at its next meeting in November. Looking further out, the market is pricing in circa 75bps of hikes in total from the ECB and Fed, and about 100bps in total from the BoE, by the middle of next year.
Government bond yields in the main markets backed up on Friday, after a respite of sorts on Thursday. The short-end led the way with 2-year yields rising by 6-10bps, while 10-year yields closed 4-7bps higher on the day. A good chunk of the increase in yields is being reversed at the open this morning though, helped by an easing in oil prices with Brent crude slipping to under $102 p/b. Meanwhile, in equity markets, European stocks shed around 1% on Friday, while US indices ended mainly in the black albeit chalking up very modest gains. The futures market points to a positive open for both today though.
The ECB’s latest survey of (Euro area) consumers inflation expectations showed an increase in both short- and medium-term inflation expectations in August. Expectations for inflation over the next 12-months rose to 3% from 2.9% in July, while 3- and 5-year ahead inflation expectations increased to 2.9% and 2.5% respectively from 2.7% and 2.4% in July, all of which will be of some concern to the ECB.
The Day Ahead
For the week ahead, as mentioned, flash PMIs for September are due in the main economies on Wednesday. Euro area consumer confidence (September) and money supply/credit growth (August) are scheduled for Tuesday and Friday respectively, while public finances (August) and consumer confidence (September) and due in the UK on Tuesday and Friday respectively also. In the US, there’s weekly jobless claims on Thursday and capital goods orders (August) on Friday.