Morning Market Brief – 2026-09-24

Following the recent wave of tech euphoria on Wall Street, financial markets are colliding with the harsh reality of the debt market. US bond yields have once again breached the 5% barrier, effectively dampening investor sentiment and triggering a correction across major stock indices. At the same time, we are witnessing widening divergences in global monetary policy—while the Bank of Japan (BoJ) embarks on a tightening path, the Swiss National Bank (SNB) keeps interest rates near zero, creating new opportunities in the currency market. Setting the backdrop for these developments are rising oil prices, serving as a reminder of unresolved supply and geopolitical challenges.

Geopolitical Landscape

• Tensions in the Persian Gulf: Recent oil price movements reflect an elevated geopolitical premium. Tensions in the region and uncertainty regarding freedom of navigation in the Strait of Hormuz keep commodity markets on high alert. Although there is a lack of full visibility regarding actual traffic restrictions, investors are pricing in the risk of potential supply disruptions from the Middle East. (Sources: Saxo Bank; CNBC; Kapitales).

Today's Highlights

• US bond yields above 5% hit Wall Street. We recently wrote about the relief felt across markets when US debt yields briefly dipped below the psychological barrier. However, the situation has shifted—in mid-September, the yield on 10-year US Treasury bonds once again topped 5%, reaching its highest levels since 2007. Market commentary links this move to stronger US economic activity data and signs of softer demand at a recent debt auction. This resulted in noticeable declines on Wall Street in the third week of September: the S&P 500 lost around 0.75%, the tech-heavy Nasdaq Composite dropped 1.13%, and the Dow Jones fell 0.68%. (Sources: The Inquirer; Financial Express; Logos-Pres; Yahoo Finance; Reuters).
• Schneider Electric acquires Shelly Group in a multi-billion transaction. Shelly Group announced that it has entered into an investment agreement with French giant Schneider Electric. The agreement entails a voluntary tender offer for all of the company's shares at a price of EUR 70 per share in cash. The proposed price values Shelly Group at approximately EUR 1.2–1.27 billion (around USD 1.4–1.45 billion) before factoring in debt. The success of the offer is conditional upon acquiring at least 95% of the share capital—if achieved, Schneider plans to delist the company. (Sources: Financial Times; TradingView; Reuters; Investing.com).
• H&M surprises the market with strong profit growth. In its fiscal third quarter (June–August), the Swedish fashion giant increased operating profit to SEK 6.04 billion (Swedish kronor), compared to SEK 4.91 billion a year earlier. This result clearly beat the analyst consensus, which had projected around SEK 5.14 billion. Sales over the period rose by roughly 1% in local currencies, and company management points to a similar growth pace (+1% YoY) in September. (Sources: Reuters; WKZO; Euronext).

Market Backdrop

• Two faces of central banks: BoJ and SNB. In line with earlier signals, the Bank of Japan (BoJ) raised its key interest rate in September to 1.25% (its highest level since the mid-1990s) in response to higher energy import costs and wage pressure. Private forecasts by former policymakers (including Makoto Sakurai) have even emerged, suggesting rates could advance toward 2% in 2027. The situation looks entirely different in Switzerland, where inflation remains very low (around 1% YoY). According to market reports, the Swiss National Bank (SNB) has kept interest rates close to 0%. This disparity makes the Swiss franc (CHF) an attractive funding currency for carry trades (borrowing cheap capital to invest in higher-yielding assets). (Sources: The Guardian; The Standard; Investing.com; FXStreet).
• Brent crude back above USD 100. At the beginning of the week, we saw prices briefly fall below USD 100; however, in the second half of September, Brent broke through this psychological threshold once again, reaching around USD 103 (with WTI crude trading above USD 90). In addition to the aforementioned geopolitical premium, analysts point to supply disruptions from Iraq and signals of reduced shipments from Saudi Arabia to select European customers. (Sources: The Guardian; Trading Economics; bne IntelliNews).
• EBRD cuts emerging market forecasts. The European Bank for Reconstruction and Development (EBRD) lowered its 2026 GDP growth forecast for the 41 economies it monitors by 0.6 percentage points, to 2.5%. Among the reasons cited in the report are the fallout from the war in Ukraine, high energy and debt-servicing costs, and weaker oil exports from Iraq. Analysts note a widening asymmetry between resilient US demand and ongoing pressure across developing nations. (Sources: bne IntelliNews; The Guardian).
• Global pressure reaches Australia. Movements in the US debt market reverberated Down Under. Ahead of Thursday's session open, futures on the Australian ASX 200 index pointed to a drop of around 1.2%, which market commentators linked directly to Wall Street's weakness and rising bond yields. (Sources: Kapitales).

What to Watch

• 24.09 (09:30) – Switzerland: SNB Interest Rate Decision. A key event for the valuation of the Swiss franc and confirmation of the scenario discussed above, with rates held near zero.
• 24.09 (10:00) – Germany: ifo Business Climate Index. A leading indicator of economic sentiment in Germany. The results will set the tone for growth prospects across the broader Eurozone, which is crucial following yesterday's PMI prints.
• 24.09 (14:30) – US: Initial Jobless Claims. A weekly indicator providing an early gauge of potential softening in the US labor market. It will be closely watched amid current concerns over high bond yields.
• 25.09 (07:00) – Japan: Core CPI. The preferred inflation gauge of the Bank of Japan. Its reading will provide crucial clues regarding the pace of further monetary policy normalization following the recent landmark rate hike.
• 25.09 (11:15) – UK: Bank of England Governor Speech. Markets will look for guidance on the outlook for British inflation and monetary policy, particularly in light of the recently reported surge in public sector debt.
• 25.09 (14:30) – US: Durable Goods Orders. A preliminary report illustrating the scale of business investment and the health of the US manufacturing sector, which has recently delivered strong data fueling the rise in bond yields.