Morning Market Brief – 2026-09-29

Welcome to another day of heightened volatility, where debt markets and central banks take center stage. A massive sell-off in U.S. Treasuries continues, pushing yields to levels not seen in over a decade. In line with yesterday's expectations, the Reserve Bank of Australia (RBA) decided to hike interest rates, while signals are emerging from Europe regarding revisions to inflation forecasts. All of this is unfolding against the backdrop of unresolved Middle East tensions, preventing oil prices from seeing a deeper correction.

Geopolitical Environment

• Strait of Hormuz talks collapse. Donald Trump officially rejected an Iranian proposal to reopen the critical shipping lane and end the fighting. According to reports, Qatari mediators were involved in the negotiations. The lack of an agreement sustains supply concerns—as a result, Europe's Brent crude ended Monday's session at $105.28 a barrel, posting a 0.9% gain. (Sources: Reuters; The Guardian)
• Details of the U.S.–China trade truce. Yesterday, we reported on the extension of the tariff truce. Today, it is known that the agreed-upon tariff reduction lists cover goods worth approximately $30 billion on each side. However, the structure of these lists is asymmetrical (according to Bloomberg estimates, they cover 77 Chinese products and as many as 1,619 U.S. products). Crucially for agricultural markets, U.S. soybeans were excluded from China's reduction list and will remain subject to an additional 10% tariff. (Sources: Reuters; Bloomberg)

Key Developments Today

• U.S. debt market continues historic sell-off. Following yesterday's rise in 30-year bond yields, overnight trading saw the yield on 10-year U.S. Treasuries (considered a global benchmark) surpass 5.27%, reaching its highest level in 19 years. September has proven to be a brutal month for bonds—the 2-year yield rose by nearly 60 basis points, and analysts describe the global debt sell-off as the most severe in two years. As a reminder, bond prices move inversely to their yields—higher yields mean a drop in the value of the securities themselves and higher borrowing costs across the economy. (Sources: Reuters)
• Reserve Bank of Australia (RBA) returns to rate hikes. In line with the forecasts mentioned yesterday, the RBA unanimously raised the cash rate by 25 basis points this morning to 4.60%. Media reports refer to this move as the fourth hike of 2026. The decision confirms that the global cycle of fighting inflation has not yet come to an end in all economies. (Sources: Reserve Bank of Australia; The Adviser)
• European Central Bank warns of energy prices. ECB President Christine Lagarde noted that higher energy commodity costs are lifting eurozone inflation prospects for 2027 and 2028. The bank's September projections forecast average headline inflation at 3.0% in 2026, 2.5% in 2027, and 2.1% in 2028. However, Lagarde stressed that there are not yet signs of persistent price pressure becoming entrenched, so the bank intends to respond moderately, which the market interpreted as an absence of appetite for aggressive, surprise rate hikes. (Sources: European Central Bank; Reuters; Xinhua)
• Nvidia announces record share buyback program. The American tech giant increased its share repurchase authorization by an impressive $150 billion. The total pool of funds allocated for this purpose now stands at $235 billion, with the company planning to utilize it by the end of fiscal year 2028. This marks the largest authorization of its kind in financial market history, surpassing Apple’s $110 billion program approved in 2024. A company repurchasing its own shares reduces the number of shares in circulation, which typically supports valuation and signals management’s confidence in the company's strong financial fundamentals. (Sources: Reuters)
• Beijing prepares further economic lifelines. China's State Council announced stronger counter-cyclical support, accelerated bond issuance and deployment, and the preparation of measures aimed at stabilizing the wobbling property market. These announcements come just ahead of tomorrow's release of the official manufacturing PMI—a Reuters poll suggests a rebound in September to 50.1 points (from 49.8 points in August), which would mark a return to expansionary territory (above 50 points). (Sources: Reuters; State Council of the People’s Republic of China)

In the Background

• Astronomical costs of artificial intelligence development. A confidential prospectus from Anthropic (one of OpenAI's main rivals), reported by the media, reveals that the company generated nearly $4.6 billion in revenue in 2025. At the same time, however, it posted a massive net loss of around $42 billion, of which roughly $34 billion were non-cash accounting charges (related to convertible equity instruments). The document also indicates that Anthropic plans to spend a staggering $518 billion on cloud infrastructure and computing power in the future. According to unconfirmed media reports, the company could soon go public, targeting a valuation exceeding $2 trillion. (Sources: Reuters; Investing.com)
• Google challenges EU digital regulations. The tech giant has appealed two orders from the European Commission issued under the Digital Markets Act (DMA). They involve requirements to share search engine data with rivals and to provide competing AI services access to features offered to its Gemini model. Google argues that these mandates jeopardize user privacy and Android security. This marks the latest chapter in the tug-of-war between U.S. tech giants and European regulators. (Sources: Reuters)

What to Watch

This week, markets are primarily focused on the health of the U.S. labor market and core inflation, which will dictate the next moves of the Federal Reserve (Fed).

• 09/29 (16:00) – US: Conference Board Consumer Confidence Index and JOLTS report. Job openings data will provide this week's first glimpse into labor market conditions.
• 09/30 (03:30) – China: NBS Manufacturing PMI. A key reading to assess whether pledged government support is actually stabilizing Chinese manufacturing.
• 09/30 (14:30) – US: Core PCE Price Index. The Fed's preferred gauge of underlying inflation. This is the week's most critical inflation release.
• 10/01 (16:00) – US: ISM Manufacturing Report. The state of the U.S. manufacturing sector and factory price pressures.
• 10/02 (14:30) – US: Non-Farm Payrolls (NFP) labor market report and unemployment rate. The week's top macroeconomic event. Strong data could fuel the bond sell-off, while weak figures could revive hopes for U.S. rate cuts.