The Global Bond Market Remains Under Significant Pressure As Energy Prices Continue To Rise

The US equity indices ended Monday in the red, reflecting simultaneous escalation on two major fronts. By the close, the Dow Jones (US30) fell by 0.29%, the S&P 500 (US500) declined by 0.48%, and the Nasdaq (US100) dropped 0.82%. The technology sector led the sell‑off amid renewed debate over AI safety: comments from Anthropic CEO Dario Amodei calling for a slowdown in algorithm development – supported by Sam Altman and Elon Musk – triggered a reassessment of risk across chipmakers. Nvidia lost 3.4%, Broadcom 4.8%, and Micron 5.2%. A second wave of pressure came from sharply rising borrowing costs amid the ongoing energy shock. With negotiations with Gulf states canceled and tanker transit delays persisting, oil prices continued to climb, intensifying inflation fears. As a result, the yield on 10‑year US Treasuries briefly broke above the 5% psychological threshold for the first time since 2023.

The Canadian dollar (CAD) fell to a one‑month low near 1.39 per USD, clearly illustrating shifting priorities in FX markets. Canada’s neutral August inflation report, headline CPI steady at 3.0% y/y and core metrics near 1.9-2.0%, deprived the loonie of domestic monetary support. With price growth moderate, the Bank of Canada is maintaining a pause in its tightening cycle, leaving the currency without the yield advantage it previously enjoyed.

In Europe, Monday’s session also ended mixed: Germany’s DAX (DE40) fell by 0.50%, France’s CAC 40 (FR40) dropped 0.76%, Spain’s IBEX 35 (ES35) declined by 1.38%, while the UK’s FTSE 100 (UK100) closed 0.44% higher. The yield on 10‑year German Bunds climbed above 3.5%, reaching its highest level since June 2009. The global bond market remains under heavy pressure as rising energy prices keep inflation expectations elevated and push borrowing costs toward multi‑year highs. On the monetary front, the key factor remains the ECB’s hawkish stance: following its recent rate hike, the regulator signaled that the tightening cycle is not yet complete. Investors are pricing in at least one more ECB rate increase before year‑end, but market attention is shifting toward a packed week of global central‑bank decisions. The Fed is expected to raise rates on Wednesday, while the Bank of England is projected to hold policy steady on Thursday – albeit with a narrow voting margin.

Oil prices paused their rally, retreating from four‑month highs near $105 per barrel and stabilizing around $102. The main catalyst for the pullback was President Donald Trump’s announcement of an agreement between Russia and Ukraine to temporarily halt strikes on energy infrastructure. Earlier, systematic attacks on Russian refineries had significantly reduced the country’s processing capacity, forcing a major fuel producer to import diesel. Nevertheless, crude prices remain above the key $100 threshold due to persistent structural supply shortages from the Middle East. The forced shutdown of Saudi Arabia’s East-West pipeline after attacks originating from Iraq blocked an alternative export route of 7 million bpd through the Red Sea – a corridor designed to bypass the vulnerable Strait of Hormuz amid Iran’s maritime blockade. The situation is further complicated by delayed diplomatic consultations between Tehran and GCC states, undermining hopes for a quick restoration of commercial shipping in the Persian Gulf.

In Asia on Friday, Japan’s Nikkei 225 (JP225) fell by 0.81%, China’s FTSE China 50 declined by 0.62%, Hong Kong’s Hang Seng (HK50) rose by 0.45%, and Australia’s ASX 200 (AU200) closed 0.10% higher on Monday.

The offshore yuan (CNY) stabilized near 6.71 per USD on Tuesday, abandoning attempts to break recent three‑year highs. The currency’s momentum is constrained by uneven macroeconomic data highlighting the patchy recovery of the world’s second‑largest economy. The main pressure factor is weak domestic demand: fixed‑asset investment from January to August fell 7.2%, the sharpest decline since spring 2020, while retail‑sales growth slowed to a three‑month low of 0.4% in August. An additional negative signal came from a moderate rise in unemployment to 5.3%.

The New Zealand dollar (NZD) fell to $0.576, hitting a two‑month low under combined external and domestic pressure. The main external driver is broad US dollar strength ahead of the September Fed meeting, where markets almost unanimously expect a rate hike. Domestically, kiwi sentiment is weighed down by signs of cooling consumer activity: electronic‑card spending fell by 0.9% m/m in August, reflecting reduced discretionary household purchases amid higher fuel costs and elevated borrowing rates. Investor focus now shifts to Thursday’s release of New Zealand’s Q2 GDP, where analysts expect only marginal growth.

• S&P 500 (US500) 7,619.98 -37.00 (-0.48%)

• Dow Jones (US30) 52,421.20 -152.09 (-0.29%)

• DAX (DE40) 25,440.81 -127.75 (-0.50%)

• FTSE 100 (UK100) 10,697.57 +47.13 (+0.44%)

• USD Index 99.16 +0.25 (+0.25%)

News feed for: 2026.09.15

• Japan Average Cash Earnings (y/y) at 02:30 (GMT+3) – JPY (MED)

• Japan GDP (q/q) at 02:50 (GMT+3) – JPY (MED)

• China Trade Balance (m/m) at 06:00 (GMT+3) – CHA50, HK50 (MED)

• Germany Trade Balance (m/m) at 09:00 (GMT+3) – EUR (LOW)