Global Market Developments
Global bond yields extended their rise before late-session consolidation, with thin data flow leaving markets sensitive to energy and geopolitics. US ADP showed 38k job growth and Brent eased to $95.6/b after an intraday spike, as comments that attacks on Iran would likely be short-lived cooled oil’s momentum. German yields ended 3.5 bps (2-y) to 1.8 bps (30-y) higher, and the 2-y rate moved above 3% for the first time since mid-2024; US yields added 3.1 bps (2-y) to 1.6 bps (30-y). The Fed’s Beige Book pointed to an OK labour market while flagging energy-driven upside pressure on prices, as US equities rebounded with the S&P 500 up 0.46% and EUR/USD near 1.159; EUR/GBP closed near 0.859 after trading up from 0.8570/75.
Asian Market and Central Bank Actions
In Asia, equities were mixed and oil slipped to $94.5/b, while Japan’s curve bull-flattened with the 30-y yield down 9.6 bps after a smooth JGB auction; USD/JPY, which had jumped from 159.50 to 158.7, traded around 157.45 as markets assessed BOJ hike risks beyond 25 bps and eyed the September 18 meeting. Attention turns to US Challenger jobs, trade balance, jobless claims and services ISM, expected near 54.1. The Bank of Canada held at 2.25% as GDP rose 3.3% in Q2 after very weak growth in Q2; CPI hovered near 3% with core close to 2%, while money markets shifted from 60% to 100% odds of an end-year hike and USD/CAD sat near 1.383. In India, USD/INR fell to 94.5 after $127bn inflows versus an $80bn estimate lifted FX reserves to just shy of $730bn.
