Morning Note: A Round-up of Global Financial Market News.

Market News

Treasuries fell across the curve as a rally in oil prices fuelled inflation concerns and bolstered bets on a Federal Reserve interest-rate hike. The yield on the 10-year US Treasury is currently 5.03%, the highest level in almost two decades. The Federal Reserve’s two-day FOMC meeting begins today. The gold price has eased to $4,290 an ounce.

Brent crude extended its rally to $107.50 a barrel as the Saudi East-West pipeline remains offline. The UK government is reportedly considering whether to provide diplomatic and military support to Saudi Arabia to counter Houthi attacks, amid concerns over the economic impact of the escalating conflict.

Equity markets remain subdued, with AI-related names suffering increased volatility. OpenAI and Anthropic have reportedly suspended IPO plans.

US equities fell last night: S&P 500 (-0.5%); Nasdaq (-0.6%). Bank of America fell 5% as CEO Brian Moynihan said trading revenue will be “relatively flat” compared with last year’s third quarter, held back by lower-than-expected investment banking fees. Elsewhere, multiple US food companies, including Campbell’s and McCormick, have announced or implemented price increases of 4%–5% on a broad range of products, citing input cost pressures.

In Asia this morning, stocks were also weak: Nikkei 225 (flat); Hang Seng (-0.9%); Shanghai Composite (-0.5%); Kospi (-1.0%). The PBOC strengthened its yuan fix for a fifth straight day to offset dollar gains ahead of a Trump-Xi summit expected later this month.

The FTSE 100 is currently 0.5% lower at 10,647, while Sterling trades at $1.3470 and €1.1675. The 10-year Gilt yields 5.41%, the highest since 2007. Bank of England Governor Andrew Bailey has pushed back against expectations of another imminent hike. Goldman Sachs expects the BoE to hold Bank Rate at 3.75% on Thursday, before delivering a 25-bp hike in November. Weak UK labour data released this morning – payrolled employees fell by 26k versus -5k expected – adds to the case for rates staying on hold this week. Meanwhile, markets are pricing in four hikes by mid-2027.

Source: Bloomberg