Rates Reset Higher Markets Steady as Oil Retreats
This week @ 15:30 Friday 25th September in London.
Markets:
- FTSE 100 rose 0.20% this week to 10,679.99, recovering into Friday on gains for mining stocks as oil prices eased, even as elevated global bond yields weighed on sentiment for much of the week.
- S&P 500 rose 0.25% this week to 7,669.59, in a volatile week as bond yields continued climbing to two decade highs, before stabilising as oil prices retreated on Friday.
- Nasdaq Composite rose 1.99% this week to 27,050.09, outperforming as investors rotated back into mega cap technology and AI related names later in the week.
- STOXX Europe 50 rose 1.04% this week to 5,364.00, recovering some ground after last week’s sharp declines, even as European government bond yields remained near multi decade highs.
Bonds:
- UK 10-year gilt yields rose 6.3bps this week to 5.38%, as the global bond sell-off continued in the wake of the Federal Reserve’s rate hike the previous week.
- US 10-year Treasury yields rose 18.4bps this week to 5.19%, touching their highest levels in almost two decades, as markets continued to digest the Federal Reserve’s rate hike and signal of further tightening ahead.
Commodities:
- Brent crude fell 4.95% this week to $98.73/bbl, retreating from four month highs after reports of progress in talks between the US and Iran on a phased deal to reopen the Strait of Hormuz, even as renewed Houthi attacks on Saudi Arabia added volatility.
- Gold fell 2.56% this week to $4,311.60/oz, its second consecutive weekly decline, as a stronger US dollar and hawkish signals from the Federal Reserve reduced demand for the precious metal.
- Copper rose 0.89% this week to $6.751/lb, touching a fresh record high during the week after an accident forced the suspension of operations at BHP’s Escondida mine in Chile, the world’s largest copper mine.
FX:
- GBP/USD fell 1.15% this week to 1.32415, as continued US dollar strength in the wake of last week’s Federal Reserve rate hike weighed on the pair, with US rates now level with UK rates for the first time in some time.
- GBP/EUR fell 0.31% this week to 1.1624, as broad US dollar strength weighed on sterling relative to the euro to a lesser degree.
Macro
- UK flash PMIs (23 September) pointed to cooling business activity and building inflation pressure, with the composite reading consistent with GDP growth of only around 0.1% for the quarter. The services PMI fell to a three-month low of 51.7, from 52.5 in August, while cost pressures rose at their fastest pace in four months, an awkward backdrop ahead of next month’s Budget.
- UK consumer confidence improved for a third consecutive month in September, though the survey continued to highlight persistent caution among households.
- Reports of progress in talks between the US and Iran towards a phased reopening of the Strait of Hormuz helped ease some of the geopolitical risk premium in oil markets towards the end of the week, even as Houthi forces launched fresh missile attacks on Saudi Arabia.
Company news:
- Rio Tinto shares came under pressure this week after reports that Chinese steel mills had been ordered to halt purchases of the company’s main iron ore product, Pilbara Blend, exposing a portion of its iron ore earnings to margin risk.
What we will be keeping an eye on next week…
w/c 28th September 2026
- US PCE inflation (August): Wednesday 30 September, the Federal Reserve’s preferred inflation gauge and a key input for the pace of any further tightening.
- Eurozone flash CPI (September): Friday 2 October.
- US non-farm payrolls (September): Friday 2 October.
Enjoy the weekend
Markets move constantly and the numbers in this update will change. This is a snapshot only, pulled together from a range of sources, and is meant as a quick guide rather than a precise record. It’s not investment advice and shouldn’t be used to make trading or investment decisions. If you need more accurate or specific data over a defined period, please get in touch with a member of the team who will be happy to help.
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This article is for information only and does not constitute advice or recommendation and you should not make any investment decisions based on it. The views and opinions of this article are those of Casterbridge at the time of writing and may change without notice. Any opinions should not be viewed as indicating any guarantee of return from investments managed by Casterbridge nor as advice of any nature. It is important to remember that past performance and the value of an investment, and any income from it, may go down as well as up and the investor may not get back the original amount invested.