AFS Markets Blog: Morning 10/11/2026

• Meanwhile in markets, energy prices continue to march lower, bringing some relief to bonds. In equities, the tech recovery continues apace – despite Nvidia stumbling due to *management issues*;

• Overnight, President Trump played down the risk of the war in Iran reigniting, saying he did not think further strikes would be necessary as Iran was already “militarily over”. Brent crude is now trading at $91 a barrel – now back below all its major daily moving average, 22 percent below its October highs. European natural gas prices are down to €80.70/MWh, breaking below their 50-day moving average for the first time since July. Prices are now nearly 25 percent lower than at the start of November, although that decline merely takes them back to levels last seen a month ago;

• Nevertheless, this does not mean President Trump is on the verge of striking a peace deal. Instead, Trump said the US would maintain the status quo for now, largely at the request of the Gulf states. The US remains locked and loaded according to the President – and should Iran misbehave he could just as easily switch back to a bombing campaign. On the Iranian side we also make note of Iran’s top security official Mohsen Rezaei saying that the US was spreading fake news over the talks – potentially referring to yesterday’s unconfirmed story that the Iranian’s dropped their demand of keeping control over the Strait of Hormuz;

• Shifting to broader market commentary, US Treasury yields are down a basis point across the curve this morning. Bund yields are down 1-2bps in a bull steepening pattern. The most notable action is in France: as OATs rally, the Bloomberg generic 10y OAT-Bund spread has narrowed to 144bps, its lowest level in nearly a month;

• Over in equities, Asian markets are in the green this morning, with South Korea’s Kospi leading the way with gains of more than 4 percent. The Nasdaq is now on the cusp of moving out of correction territory after gaining nearly 3 percent yesterday – even as the Nasdaq’s largest constituent – Nvidia – dropped nearly five percent yesterday on reporting that CEO Jensen Huang had affair with a Chinese spy. Nasdaq futures are currently holding close to yesterday’s closing level;

• Touching on FX, EURUSD is trading at 1.124 this morning. Meanwhile EURCHF continues to find resistance just below the 0.92 handle as safe haven demand eases;

• Looking ahead, all eyes are on this afternoon’s US CPI report for October. With inflation continuing to run hot, doves are praying for a softer than expected print to breathe new life into the debate over a hold. Note that, due to last year’s government shutdown, we will only receive month-on-month data, rather than the usual year-on-year figures. Consensus expects core inflation to have risen by 0.2 percent MoM;

• Before the CPI release, keep an eye on remarks from Fed Governor Waller. As one of the key voices we follow on the FOMC, his comments are always worth listening to. Besides Waller, there is plenty more Fed and ECB speak to keep track of. We’ll also be watching for headlines from the trilateral talks between the US, Russia and Ukraine in Abu Dhabi that are set to take place over the next two days.

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