TMGM Daily Market Breakfast: 24 September 2026

Morning Snapshot

• U.S. Treasury yields climbed to multi-year highs after hawkish Federal Reserve comments, strong U.S. business activity data and weak demand at a Treasury auction reinforced expectations of further policy tightening.
• Federal Reserve officials including Michael Barr and John Williams said inflation remains the main challenge and indicated further rate increases may be needed as employment risks have eased.
• Oil markets remained volatile as U.S.-Iran diplomacy continued alongside fresh Strait of Hormuz tensions, with Brent reported around $103, WTI near $90.80-$91.40 and physical supply conditions tightening.
• The United States and China agreed to extend their trade truce through January 10, Treasury Secretary Scott Bessent said.
• The Swiss National Bank left interest rates unchanged at 0%, while officials said inflation is likely to remain elevated for some time and policy will be adjusted if necessary.
• The People’s Bank of China said it will step up counter-cyclical adjustments, maintain an appropriately loose monetary policy and keep the yuan broadly stable.
• Bank of England Deputy Governor Clare Lombardelli said policy is increasingly likely to need to tighten if elevated energy prices persist without clear evidence of disinflation or weaker activity.
• Iran said it is reviewing the U.S. response to a proposal aimed at ending hostilities, while President Masoud Pezeshkian said Tehran would not allow freedom of navigation through the Strait of Hormuz while sanctions and a U.S. blockade remain in place.
• Ukraine President Volodymyr Zelenskyy said Kyiv remains ready for a bilateral energy ceasefire with Russia after talks with U.S. and UK leaders in New York.
• Asian markets traded mixed ahead of a meeting between U.S. President Donald Trump and Chinese leader Xi Jinping later in the day.

Market Developments

Rates & Bonds

U.S. Treasury yields rose sharply, with five-year yields briefly moving above 5% and the 10-year yield hitting a 19-year high as hawkish Fed rhetoric, strong U.S. activity data and weak auction demand weighed on bonds.

Foreign Exchange

The U.S. dollar strengthened on rising Fed hike expectations, pushing EUR/USD down toward 1.1380, GBP/USD to 1.3253 after a drop of more than 0.70%, and USD/JPY above 158.00 before the yen later firmed to around 157.85 amid higher JGB yields and intervention concerns.

Commodities

Brent crude was reported around $103 after rising 3.9% in one session, while WTI traded around $90.80-$91.40 as traders balanced diplomatic signals from U.S.-Iran talks against attacks in the Strait of Hormuz and tight physical supply. Gold fell below $4,300 and was reported near $4,290 after dropping more than 1.5% as yields and Fed tightening expectations rose.

Equities

U.S. stock futures moved lower in European trading, with Dow Jones futures down 0.17% to about 51,780, S&P 500 futures down 0.34% to around 7,750 and Nasdaq 100 futures down 0.5% to near 30,610, while Asian equities traded mixed ahead of the Trump-Xi meeting.

Macroeconomics & Central Banks

Fed Officials Reinforce Tightening Bias as U.S. Yields Hit Multi-Year Highs

Federal Reserve officials delivered another round of hawkish signals, keeping inflation at the centre of the policy debate and helping drive Treasury yields sharply higher. Governor Michael Barr said further rate hikes will likely be needed to ensure a timely return to the 2% inflation target, adding that the risks to restoring price stability have grown while risks to jobs have eased.

New York Fed President John Williams said the major challenge remains high inflation, while noting that downside employment risks have eased and that the economy is seeing strong demand linked to artificial intelligence. Those comments added to a broader repricing in rates markets after strong U.S. business activity data and poor demand at a Treasury auction.

Treasury yields rose to their highest levels in years during the session. The 10-year yield hit a 19-year high, while five-year yields briefly moved above 5%, their highest level in nearly two decades. The move also fed through to other asset classes, with the dollar strengthening, gold falling more than 1.5% and U.S. equity futures moving lower.

Swiss National Bank Holds Rates at 0% and Flags Persistent Inflation Risks

The Swiss National Bank left its policy rate unchanged at 0%, extending a policy stance that contrasted with the renewed tightening rhetoric coming from the Federal Reserve and other central banks. The decision was followed by a decline in the Swiss franc to fresh four-month lows against the U.S. dollar.

SNB Vice Chairman Antoine Martin said inflation is likely to remain elevated for some time. He said global economic growth was stronger than expected in the second quarter, that moderate global growth is anticipated in coming quarters, and that energy prices could turn out significantly higher than expected amid continued uncertainty linked to the Middle East.

Chairman Martin Schlegel said the SNB will continue to monitor the situation and adjust policy if necessary, underscoring that the central bank remains alert even after leaving rates unchanged.

PBoC Pledges Loose Policy and Yuan Stability

The People’s Bank of China said it will step up counter-cyclical adjustments and continue to implement an appropriately loose monetary policy. The central bank also said it will work to keep the yuan broadly stable, signalling continued support for domestic conditions while seeking to limit currency volatility.

Bank of England Official Says Energy Prices Are Raising the Case for Tighter Policy

Bank of England Deputy Governor Clare Lombardelli said policy is increasingly likely to need to tighten if elevated energy prices persist, absent clear evidence of disinflation or weaker activity. Her comments highlighted how the latest energy shock is complicating the outlook for central banks already balancing inflation risks against slowing growth.

ECB Policymaker Warns Against Entrenched Inflation

ECB Governing Council member Martin Kocher said the central bank must prevent excessively high inflation from becoming entrenched, adding to the broader message from major central banks that price pressures remain a policy priority even as growth risks persist.

Geopolitics, Trade & Energy

U.S.-China Extend Trade Truce Through January 10

The United States and China agreed to extend their bilateral trade truce through January 10, according to Treasury Secretary Scott Bessent. The truce had previously been due to expire in November, and the extension removes an immediate deadline ahead of a scheduled meeting later in the day between President Donald Trump and Chinese leader Xi Jinping.

U.S.-Iran Diplomacy and Strait of Hormuz Tensions Keep Oil Markets on Edge

Oil markets remained highly sensitive to developments around the U.S.-Iran conflict, with diplomacy and security risks pulling prices in opposite directions. Iran said it is reviewing the U.S. response to its proposal aimed at ending hostilities, while separate reports said Washington and Tehran were in talks and that hopes for diplomatic progress had weighed on crude prices in Asian trading.

At the same time, tensions in the Strait of Hormuz remained acute. Iran President Masoud Pezeshkian said the country would not allow freedom of navigation through the strait while sanctions and a U.S. blockade remain in place. Fresh attacks in the Strait of Hormuz were also reported during the session, intensifying concern over physical supply.

Those cross-currents left crude volatile. Brent was reported around $103 after surging 3.9%, while WTI traded around $90.80 to $91.40 after earlier rebounding from a five-day losing streak. Commerzbank said traders were paying record premiums to secure immediate supply at Cushing, Oklahoma, indicating significant tightness in the physical market. Saudi Arabia’s partial pipeline restart provided only limited relief. President Trump also said he had encouraged advisers to support a ban on U.S. diesel exports, although the administration’s position remained in flux.

Zelenskyy Says Ukraine Is Ready for an Energy Ceasefire With Russia

Ukrainian President Volodymyr Zelenskyy said Kyiv remains ready for a bilateral energy ceasefire with Russia after separate talks in New York with the leaders of the United States and the United Kingdom. The proposal keeps energy infrastructure at the centre of diplomatic efforts as the war continues to carry broader implications for regional energy security.

Regional Policy Watch

RBA September Hike Expectations Firm After CPI and GDP Surprises

TD Securities said it expects the Reserve Bank of Australia to raise the cash rate by 25 basis points to 4.60% at its September board meeting. The firm said the case for tightening strengthened after an upside surprise in the July CPI release on 26 August and a firmer second-quarter GDP reading on 2 September.

TD said the RBA is likely to keep open the possibility of further tightening, but it does not see a pressing case for follow-up hikes in November or December. It cited the lagged effects of the prior three hikes, the scope for a September move to serve as a sufficient response to a likely stronger third-quarter inflation outcome, signs that forward-looking employment indicators remain stable, and the possibility that progress in U.S.-Iran talks could ease pressure on oil prices.

Bank of Canada October Decision Seen as Complicated by Energy Risks

Royal Bank of Canada said revised population estimates imply stronger potential output in Canada, which mechanically reduces pressure on the Bank of Canada to raise rates. Even so, RBC said policymakers remain focused on real-time slack indicators such as business survey measures of excess capacity, the unemployment rate and core inflation trends, none of which are affected by the demographic revisions.

RBC said the Bank of Canada is increasingly focused on risks from energy prices, leaving the October policy meeting a difficult call despite the upward revision to potential GDP.

Upcoming Key Events

• Trump-Xi meeting — null: U.S. President Donald Trump and Chinese leader Xi Jinping are scheduled to meet later in the day as markets monitor trade and broader bilateral relations.