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18 September 2026

US stocks rose on Thursday amid lower oil prices and Treasury yields. The S&P 500 closed 1.1% higher.  

US Treasuries rallied as lower oil prices and the Fed’s emphasis on price stability eased inflation concerns. 10-year yields dropped 9bp to 4.93%.  

European stock markets rose on Thursday amid lower energy prices. The Euro Stoxx 50 rose 0.9%. The German DAX gained 0.7%, and the French CAC was up 0.6%. In the UK, the FTSE 100 closed 1.2% higher.

European government bonds rose. 10-year German bund yields fell 3bp to 3.48%, and 10-year French bond yields fell 2bp to 4.44%. In the UK, 10-year gilt yields dropped 8bp to 5.22%.

Asian stock markets traded mixed on Thursday, after the Fed’s expected 25bp rate hike. Japan’s Nikkei 225 rose 0.3% ahead of the Bank of Japan’s widely expected rate hike later today, while Korea’s Kospi ended little changed. Elsewhere, China’s Shanghai Composite and Hong Kong’s Hang Seng both fell 0.4%. India’s Sensex ended flat.

Crude oil prices extended declines on Thursday. WTI for October delivery settled 0.5% lower at USD101.9 a barrel. 

The Bank of Japan (BoJ) raised its policy rate by 25bp to 1.00%, as widely expected, and decided to halt the reduction in JGB purchases from April 2027. The BoJ highlighted the risk of underlying CPI inflation deviating upward above 2%.

The Reserve Bank of Australia (RBA) kept its policy rate unchanged at 4.35%, as widely anticipated. Governor Bullock noted upside risks to inflation and did not rule out further tightening.

In China, May activity indicators continued to reflect a two-speed economy. Industrial production showed resilience, up 4.5% YOY, driven mainly by gains in high-tech manufacturing and new energy sectors thanks to robust exports. However, non-tech domestic demand was softer than expected as the property sector remained under pressure. Retail sales fell 0.6% YOY, partly reflecting an unfavourable base effect from last year’s trade-in subsidies. Fixed asset investment contracted by 4.1% YOY in the first five months, despite strong advanced manufacturing investment.

In Japan, headline CPI inflation stayed at 1.9% yoy in August, while core inflation (excluding fresh food) edged down to 1.7% yoy from 1.8% yoy in July. The Bank of Japan is expected to raise its policy rate by 25bp. BoJ Governor Ueda may signal a faster pace of policy normalisation amid rising upside risks to inflation.

US industrial production has been trending higher, consistent with an improving ISM manufacturing index.