Blog week ending, 9th October 2026
Markets:
- Local and global equity markets saw a mixed week, with developed markets flat to weaker as higher oil prices and bond yields weighed on sentiment, while the Brazilian equity market surged higher on presidential election results.
- Australia’s 30-year government bond yield rose to 5.89% on Wednesday, its highest level since the benchmark was launched in 2016, while the 10-year yield rose to 5.41%, close to its late-September high.
- The US 10-year Treasury yield rose to around 5.37%, its highest level since 2002, while the 30-year yield moved above 5.7%. Despite this, the S&P 500 and Nasdaq reached record highs early in the week, before slipping as yields continued to climb.
- In local stock news, AI data centre developer Firmus initially priced its IPO at $11 per share, valuing the company at around $43.7 billion. However, weak investor interest led bankers to first reduce the offer price before pulling the IPO altogether. Firmus was set to be Australia’s second largest IPO in history. It remains unclear whether the company will attempt to relist on the ASX or whether it will focus on offshore markets instead.
- Fortescue’s iron ore shipments fell 6% in the September quarter to 46.8 million tonnes, while its net debt rose to US$2.8 billion from US$0.9 billion at the end of June after the company paid its final dividend and funded capital expenditure.
- Metrics Credit Partners’ listed funds resumed trading on Monday following a suspension, with the Metrics Income Opportunities Trust falling 7.4%. The Metrics Master Income Trust reported a $47.1 million revaluation loss in its audited accounts and confirmed applications and redemptions had been halted across its underlying funds.
- Oil prices jumped on Thursday, with Brent crude rising back above US$105 a barrel as Iran stepped up attacks on tankers in the Strait of Hormuz and US Gulf Coast producers shut in output ahead of an approaching storm.
- The Aussie dollar remained below US70 cents as the US dollar index rose to its highest level since April 2025.
Economy:
- Australian consumer sentiment fell 4.7% in October to 80.4, a six-month low. Sentiment among respondents surveyed after last week’s RBA rate hike was much weaker than among those surveyed beforehand, with more than 80% of post-decision respondents expecting mortgage rates to rise further over the next year.
- Australian industrial activity fell back into deep contraction in September, with the Ai Group Australian Industry Index dropping 21.1 points to -25.5. Construction was the weakest sector, while lenders became more cautious on credit risk. Pockets of growth came from data centres, defence, and renewable infrastructure projects.
- The US economy added just 29,000 jobs in September, well below expectations of 84,000, while the unemployment rate rose to 4.2%. Payrolls for the prior two months were revised down by a combined 60,000 jobs, while annual wage growth slowed to 3.0%, its weakest pace since 2021.
- Minutes from the US Federal Reserve’s September meeting showed all 19 officials supported the rate hike to 3.75%–4.00%, with most expecting that another increase would likely be appropriate by year-end. Following the weak jobs data, markets are now pricing only a 20%-25% chance of a hike at the October meeting.
- The US ISM Services PMI eased to 54.9 in September from 55.4, marking its 27th consecutive month of expansion. However, the prices-paid index rose to 74.0, its highest level since July 2022, highlighting building cost pressures in the services sector.
- Eurozone inflation rose to 3.8% in September from 3.2% in August, its highest level in three years and above expectations. Energy prices increased 18.8% on the same period last year, while core inflation edged up to 2.5% from 2.4%, ahead of the ECB’s 28–29 October meeting.
- Bank of Japan Governor Kazuo Ueda said the central bank would continue raising interest rates in line with economic, price, and financial conditions, noting that financial conditions remained accommodative. Markets continue to price around a 25% chance of a hike at the BoJ’s 29–30 October meeting.
- Japan’s real wages increased for the eighth straight month in August as government inflation-relief measures continued to support household spending power. However, wage growth slowed to 1.5% in August from July’s revised 2% gain.
- The Reserve Bank of India raised interest rates by 0.25% to 5.5%, its first increase since February 2023, as rising oil prices and broadening inflation pressures prompted the move.
Politics:
- The White House has asked the Pentagon to develop options for strikes against Iran that could be carried out before the 3 November US midterm elections, according to media reports. A White House official said President Trump “has all options available”, while indirect talks with Tehran continued through intermediaries.
- G7 leaders agreed to release 100 million barrels of oil and diesel from strategic reserves over four months, coordinated by the International Energy Agency, with a substantial diesel release scheduled for the first 20 days. The agreement followed US pressure on European countries and a threat to restrict US diesel exports.
- Japanese Prime Minister Sanae Takaichi pledged to control government bond issuance and act swiftly against market turbulence in her policy speech to parliament after Japan’s 30-year government bond yield hit a record high on concerns over the government’s stimulus plans.
- Right-wing Senator Flavio Bolsonaro won the first round of Brazil’s presidential election, taking 47% of the vote and finished ahead of incumbent leftist President Lula, who received 45%. A run-off election will now take place. Flavio is the son of former president Jair Bolsonaro.
This information is general advice and does not take account of investors’ objectives, financial situation or needs. Before acting on this general advice, investors should therefore consider the appropriateness of the advice having regard to their objectives, financial situation or needs.
Written by Christopher Lioutas
Chairman – Harbourside Investment Management
