AFS Markets Blog: Morning 25/09/2026
• Meanwhile in markets, bond yields are easing off their highs this morning, taking their cue from crude oil. Brent slipped to $105 a barrel – down $3 from yesterday's peak – after the Financial Times reported that Iranian mediators had pitched a new ceasefire deal to Washington on the sidelines of the UN General Assembly;
• Under the deal, Tehran would reopen the Strait of Hormuz within seven days of the US meeting – yet to be made public – on conditions, paving the way for new negotiations on a more comprehensive deal. Don't mistake the pullback in crude for a real celebration though, as Brent is still up almost two percent for the week. Note that European natural gas, despite also pulling off its lows of the week, is still sitting at a nearly seven percent loss week-to-date;
• Shifting to fixed income, US Treasury yields are down 2–4bps this morning in a bull-steepening pattern. While it provides some relief, the move only slightly reverses this week's sell-off: yields remain up 13–17bps on the week. The 30-year UST yield came within a hair of hitting 5.50 percent for the first time since 2004 yesterday, though it has since eased back to 5.46 percent;
• Closer to home, the 2-year Bund yield is down 4bps this morning, while the 30-year yield is holding steady at yesterday's closing level. On a weekly basis, German debt remains far more stable: 2-year yields are unchanged, and while 10-year yields have gained 6bps, 30-year yields are up by just 2bps. Over in France, the 10-year OAT-Bund spread has retreated from yesterday's highs after hitting 112bps – its widest level since 2012. The spread narrowed to 107bps as Marine Le Pen, leader of the far-right National Rally, indicated she may refrain from toppling the government in the upcoming budget round out of fear of triggering a bond market crisis. Yes, it seems the bond market vigilantes are actually bringing French politicians together;
• Moving to FX, USDJPY has halted its march toward 160, trading around 158.02 at the time of writing. The 100-pip pullback from yesterday’s highs follows reports that President Trump voiced concerns over yen weakness at the UN General Assembly, alongside jawboning from Japanese officials. Most notably, Japan’s growth strategy minister Minoru Kiuchi declared that the nation has exited its reflationary framework, signaling an end to aggressive monetary easing and flexible fiscal policy;
• Looking ahead, the economic calendar is light today. On the data front, US durable goods orders are due at 14:30 CET, accompanied by some speaking engagements from a handful of Fed- and ECB officials throughout the day.
