Oil returns to triple digits

US Treasury yields moved sharply higher in response, with the 10-year yield closing at 4.97% on Friday, the highest level since 2023, and the two-year note rising above 4.63%, as investors reassessed expectations ahead of next week’s Federal Reserve (Fed) policy meeting.

Equity markets struggled against this backdrop, with major US indices recording four consecutive declines before rebounding on Friday, ending the holiday-shortened week modestly lower overall. Inflation data remained central to the outlook for the Fed’s upcoming policy decision.

Both consumer and producer price reports signalled persistent price pressures at the retail and wholesale levels. Headline Consumer Price Index (CPI) rose 3.4% year-on-year, unchanged from July, while core prices increased 0.3% month-on-month, above expectations and the fastest pace since April. On the producer side, prices rose 0.4% in August from 0.1% in July.

European equities finished the week lower as rising oil and natural gas prices weighed on sentiment, amid concerns over depleting reserves and ongoing geopolitical tensions. As expected, the European Central Bank (ECB) raised its deposit rate from 2.25% to 2.5%, with President Lagarde reiterating the ECB’s commitment to restoring and maintaining price stability.

Equities

Global stocks finished down by -1.0% in euro terms and down 1.0% in local terms last week. Year-to-date global markets are up by 13.7% in euro terms and up by 12.5% in local terms. The US market, the largest in the world, finished down -0.8% in euro terms and down -0.8% in local terms.

Fixed Income & FX

The US 10-year yield finished at 5.0% last week. The German equivalent finished at 3.5%. The Irish 10-year bond yield finished at 3.6%. The Euro/US Dollar exchange rate finished at 1.16, whilst Euro/GBP finished at 0.86.

Commodities

Oil finished the week at $100 per barrel and is up 76.5% year-to date in euro terms. Gold finished the week at $4,349 per troy ounce and up 2.0% year-to-date in euro terms. Copper finished the week at $14,230 per tonne and is up 15.7% year-to-date in euro terms.

The week ahead

Wednesday 16^th September

Fed policy rate decision.

Thursday 17^th September

BoE bank rate decision. 

Friday 18^th September

BoJ interest rate decision.