Global Markets & Fixed Income
Midday update — updated Mon, Aug 17, 2026 · 1:00 PM (Europe/London).
Top Story
US opens near records, but a strategist flags the earnings 'bonanza' may be less than it looks — while Gulf war keeps oil bid
Into the US session, the S&P 500 sits at record highs (up more than 6% in 12 sessions) after last week's moderating inflation and the AI trade, but CNBC's Santoli warns the earnings strength behind the rally may be overstated; meanwhile the Middle East conflict keeps oil elevated, a key crosswind for the inflation and interest-rate outlook.
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The full brief, split by asset type.
Fixed Income — your focus
Treasuries carry last week's 'inflation moderated' tone into the US open; 10Y at 4.63%
Last week's benign inflation print (no upside surprise) remains the anchor for the US 10Y at 4.63% and the 2Y at 4.15% as the cash session opens, with the AI-led equity rally competing for attention.
Cooler-than-feared inflation is typically GOOD for bonds: traders infer the Fed has more room to eventually cut rates, so they buy Treasuries. Because bond prices and yields move inversely, that buying pushes yields DOWN. Remember the duration idea — the longer-dated the bond, the more its price moves for a given yield change, so the 10Y and 30Y react more than the 2Y.
Curve stays upward-sloping: 2s10s around +48 bp
With the 2Y at 4.15% and the 10Y at 4.63%, the gap (2s10s) is roughly +48 bp — a normal, positively-sloped curve where longer maturities yield more than shorter ones.
A positive (steep) curve means investors demand extra yield to lend for longer — compensation for inflation and rate uncertainty over time. Beginners watch this because an INVERTED curve (short yields above long) has historically preceded recessions; a re-steepening like this is usually read as markets pricing a normal growth/rate path rather than imminent Fed cuts into a downturn.
IG spreads still tight at 79 bp even as a big trading firm preps a debt refinancing
US investment-grade option-adjusted spreads sit at just 79 bp, a rich level, while Bloomberg reports Jane Street took a ~$15bn July loss and is preparing a multibillion-dollar debt refinancing — a name to watch for how much extra yield credit investors demand.
A credit spread is the EXTRA yield over Treasuries that investors require to hold corporate risk; 79 bp is historically narrow, signalling calm and confidence that companies will repay. When a large borrower shows losses and comes to market, traders watch whether spreads WIDEN (prices fall) as compensation for perceived risk rises. Tight spreads mean cheap borrowing for companies; widening spreads mean the market is getting more cautious.
Fresh BoJ data lands: July producer prices and central-bank JGB holdings
The Bank of Japan released July Corporate Goods (producer) prices and updated figures on Japanese Government Bonds held by the BoJ, keeping the focus on how quickly Japan is normalising policy after years of ultra-low rates.
Japan matters for global bonds via the carry trade: for years investors borrowed cheaply in yen to buy higher-yielding bonds abroad, including US Treasuries. Hotter Japanese producer prices raise the odds the BoJ keeps lifting rates, which can pull that money home and push JGB yields up (prices down). Beginners watch this because a JGB sell-off can spill into higher yields globally.
Indian bond traders wait on RBI policy minutes as oil stays elevated
Reuters reports the rupee is expected to trade rangebound and Indian bond desks are awaiting the central bank's policy minutes, with high crude prices from the Gulf conflict clouding the inflation outlook.
Central-bank minutes tell traders how hawkish or dovish policymakers are; a hawkish tone (worried about inflation) typically pushes local bond yields UP as investors price fewer cuts. Elevated oil compounds this — for an oil importer like India, dearer crude means higher imported inflation, which usually lifts yields and pressures the currency, so bonds and the rupee often sell off together.
Central Banks & Policy
ECB's Lane: rising defence spending and the euro-area economy (fresh this morning)
New this morning, ECB chief economist Philip Lane published remarks on how higher European defence spending affects the euro-area economy — a fiscal theme with direct implications for future bond supply and inflation.
BoJ publishes July producer prices and updated bond holdings
The Bank of Japan released its July Corporate Goods Price Index and refreshed data on its JGB holdings, keeping markets focused on the pace of policy normalisation in Japan.
Fed funds ceiling holds at 3.75% as backdrop to the US session
With no fresh FOMC decision today, the policy rate stays at a 3.75% upper bound; the Fed's latest headline was a routine enforcement action tied to a former Regions Bank employee.
Equities & Global Markets
S&P 500 at records into the open, but Santoli questions the earnings story
The S&P 500 is up more than 6% over 12 sessions to record highs, yet CNBC's Santoli argues the earnings 'bonanza' underpinning the move may be flattered by a few names — a note of caution as the cash session begins.
Premarket: Alibaba, Intel and SanDisk among the biggest movers
Ahead of the US open, Alibaba, Intel and SanDisk led the premarket action, with the AI hardware theme still driving single-stock volatility.
Jane Street posts first monthly loss in a decade after AI setback
Bloomberg reports the trading giant took a roughly $15bn July loss as AI stocks slumped, forcing a reassessment of risk as it lines up a large debt refinancing.
Asia & China
Goldman flags China stocks set to gain from AI-hardware export wave
Goldman Sachs highlighted Chinese names positioned to benefit from a new wave of AI-related hardware exports, stressing company execution over the macro backdrop.
Asian shares mark time as the Gulf war keeps oil prices elevated
Asian equities were little changed overnight, with Indian shares slipping, as the ongoing Iran conflict and a partial slowdown in Strait of Hormuz shipping kept crude prices supported.
Iran says no talks with US have begun; two French embassy staff barred
Iran reaffirmed that negotiations with Washington have not started and cited alleged US violations of a memorandum of understanding, while separately barring two French embassy employees from returning — keeping regional risk premium in oil elevated.
UK Fixed Income — Gilts & BoE
No fresh UK-specific catalyst midday; gilts take their lead from Treasuries and oil
With no new BoE or gilt-auction headline in this session and no UK 10Y level supplied, gilts are most likely tracking the moderating US inflation tone and the elevated oil price tied to the Middle East conflict.
Gilts don't trade in isolation — UK yields often move with US Treasuries because global bond investors compare returns across markets. Cooler US inflation tends to pull global yields down (bond prices up), while higher oil raises imported-inflation fears that can push yields back up. Beginners should watch the direction of oil and US data as the near-term drivers when UK-specific news is quiet.
ECB's Lane on defence spending is a read-across for UK debt supply too
Lane's remarks on rising European defence spending underscore a fiscal theme relevant to gilts: heavier government borrowing across Europe can mean more bond supply and upward pressure on longer-dated yields.
When governments plan to spend and borrow more, they issue more bonds. More supply, all else equal, pushes bond prices DOWN and yields UP — especially at the long end (30Y), where duration makes prices most sensitive. This is why beginners watch fiscal/defence news: it feeds the supply side of the bond market, separate from central-bank rate decisions.
Bonds & Rates
Treasury yields, policy rates, credit spreads and bond fund prices.
Government bond yields
Policy rates & credit spreads
Bond prices — funds & ETFs
Oil & Energy
The whole energy complex — crude, refined products, gas and energy funds.
Crude benchmarks
Refined products & gas
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Equities
Global and US index levels.
Index levels
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