AFS Markets Blog: Midday 21/09/2026

• Meanwhile in markets, bond yields continue to inch lower throughout the session while equities rally hard. The Stoxx 50 is up over 1.25 percent this morning, and while the gains are broad-based, the technology sector is the clear leader on our dashboard;

• Does the tech rally mean the AI trade is back in full force? Yes, there has been a return of buoyancy to the AI trade over the past month. But no, we really can’t speak of a return to record-breaking momentum. South Korea’s Kospi index – an important AI bellwether – has advanced nearly two percent today (not a crazy intraday move for the volatile index). Still, the Kospi is down 23 percent from its June peak. From a technical perspective, while this recent recovery has lifted the Kospi above its 50- and 200-day moving averages, it has yet to clear its 100-DMA – suggesting that its recovery remains incomplete;

• Over in the US, Nasdaq futures are up by a percent this morning but remain roughly three percent shy of their June all-time high. By comparison, less tech heavy S&P 500 futures are less than half that distance below their all-time high;

• Shifting to energy markets, Brent crude is currently trading at $102 a barrel – roughly a dollar below Friday’s close. While this represents a 7.5 percent pullback from its September highs, Brent remains up over 10 percent in September. Even more concerning for our wallets is that crack spreads remain at their highs. With global refining capacity falling short of what is needed, the price gap between crude and finished petroleum products has widened significantly. You can see this clearly in European diesel futures, which are up an incredible 144 percent so far in 2026;

• Moving on to fixed income, US Treasury yields are trading 2–4 bps lower across the curve this session. Bunds are holding onto their gains, with yields down 4–5 bps from Friday’s close. Notably, the closely watched French OAT-Bund spread has tightened further this morning, falling back below the key 100bps threshold;

• Touching on some FX market commentary, USDJPY has added another 20 pips since our morning update, and so far there are no signs of official pushback from Japanese authorities. In our neck of the woods, the ECB’s broad euro basket has broken below all its major moving averages to reach its lowest level since July. The broad euro is now down 1.5 percent year-to-date. In contrast, the broad US dollar is up two percent against major currencies and one percent against emerging market currencies over the same period;

• Looking ahead, it should be a pretty quiet afternoon – with nothing worth noting on the schedule. Tomorrow, we do have a full slate of central bank speakers on the docket, and we’ll also be keeping a close eye on the UN General Assembly for any major geopolitical headlines.

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