French Bond Yields Reach Their Highest Level Since 2002

The US equity indices began the week by extending the bullish rally, ignoring strong pressure from the energy sector and persistent tightness in the bond market. By the end of Monday’s session, the Dow Jones (US30) rose by 0.18%. The S&P 500 (US500) gained 0.66%, once again renewing its all‑time high. The tech‑heavy Nasdaq (US100) closed in positive territory at 1.05%. Big Tech and the AI infrastructure sector led Monday’s advance. Shares of Meta (+1.9%), Microsoft (+1.5%), and Alphabet (+0.9%) provided key support to the Broad Index, while semiconductor producers showed selective performance: strong gains in Nvidia (+2.1%) and Broadcom (+2.1%) offset declines in Intel (-2.6%), Micron (-1.0%), and AMD (-0.3%). Additional momentum for the automotive and aerospace sectors came from Tesla (+2.2%) and a surge in SpaceX shares (+7.6%), driven by reports of potential technological cooperation with Taiwan Semiconductor.

Canada’s Services PMI from S&P Global jumped to 48.3 in September 2026 from 46.8 in August. Despite a slowdown in the pace of contraction and a recovery in business sentiment to the highest level since April, the indicator remains in contraction territory (below the 50.0 threshold). Canada’s services sector continues to face dual pressure: US trade tariffs and geopolitical escalation around Iran are generating high uncertainty and restraining new orders.

In Europe, Germany’s DAX (DE40) rose by 0.09%, France’s CAC 40 (FR40) closed down 0.80%, Spain’s IBEX 35 (ES35) gained 1.12%, and the UK’s FTSE 100 (UK100) ended the session higher by 0.34%. The sovereign‑debt market of Southern Europe and France is engulfed in a new wave of turbulence, where global increases in borrowing costs overlap with an acute fiscal‑discipline crisis. The yield on 10‑year French OATs jumped to 4.92% – the highest since July 2002 – while the spread to benchmark German Bunds widened to 152 basis points, reaching its largest level since the Eurozone debt crisis of 2011. Investors are pricing in a higher risk premium, doubting Paris’s ability to keep the budget deficit within the targeted 5% of GDP amid rapidly rising debt levels and a lack of progress in reducing public spending.

On Monday, global oil prices resumed their decline, falling below the psychological $90 per barrel mark, as a market‑share push by a key Saudi exporter outweighed the lingering geopolitical premium. A sharp trigger for the negative dynamics was Saudi Aramco’s decision to cut the November Official Selling Price (OSP) for its flagship Arab Light grade for Asian buyers to a $5 discount to the regional benchmark – compared with a $2 discount for October deliveries. More aggressive pricing by Saudi Arabia indicates intensifying competition among producers amid the gradual restoration of shipment volumes through the Strait of Hormuz.

In Asia on Monday, Japan’s Nikkei 225 (JP225) rose by 2.40%, the Chinese FTSE China 50 was closed, Hong Kong’s Hang Seng (HK50) gained 0.28%, and Australia’s ASX 200 (AU200) ended the session slightly higher at 0.05%.

The Australian dollar (AUD) is struggling to hold positions near the psychological level of 0.70 against the US dollar, showing a recovery impulse after pulling back to multi‑month lows on 1 October. The main driver of support for the Australian currency is cross‑currency flows: capital rotation out of weakening euro‑area currencies and the New Zealand dollar created local demand for AUD. Euro selling, which dragged EUR/USD to late‑2024 lows amid France’s fiscal crisis and elections in Spain, combined with the decline in the New Zealand dollar, allowed AUD/NZD to rise to a six‑day high.

The New Zealand dollar (NZD) has paused its decline and stabilized near $0.560, recovering after testing lows last seen in November 2025. Local support came from a surge in business optimism: according to Q3 surveys, 43% of companies expect an improvement in business conditions versus only 8% in the previous period, despite higher fuel costs and geopolitical pressure. The pro‑inflation impulse from expensive energy is forcing the market to price in a hawkish scenario from the Reserve Bank of New Zealand: the probability of a 25‑basis‑point rate hike to 3.0% at the 28 October meeting is estimated at 58%, while a similar move in December is almost fully priced in.

• S&P 500 (US500) 7,773.95 +51.23 (+0.66%)

• Dow Jones (US30) 51,267.90 +90.94 (+0.18%)

• DAX (DE40) 25,254.21 +23.01 (+0.09%)

• FTSE 100 (UK100) 10,497.94 +35.99 (+0.34%)

• USD Index 102.11 +0.18 (+0.18%)

News feed for: 2026.10.06

• Australia Westpac Consumer Confidence (m/m) at 02:30 (GMT+3) – AUD (LOW)

• Japan BOJ Gov Ueda Speaks at 09:35 (GMT+3) – JPY (MED)

• Switzerland Unemployment Rate (m/m) at 10:00 (GMT+3) – CHF (MED)

• Eurozone Retail Sales (m/m) at 12:00 (GMT+3) – EUR (MED)

• US Trade Balance (m/m) at 15:30 (GMT+3) – USD (MED)

• Canada Trade Balance (m/m) at 15:30 (GMT+3) – CAD (MED)

• Canada Ivey PMI (m/m) at 17:00 (GMT+3) – CAD (LOW)