Sovereign yields rallied on both sides of the Atlantic as investors reassessed the likely timing of interest rates in the US. Last week’s Federal Reserve policy meeting yielded no immediate changes with the benchmark rate kept close to zero. However, more members of the Bank’s policy committee now see the first rate risk taking place next year; back in June, the slight majority saw that move happening in 2023. Fed Chairman Jerome Powell states in his post meeting conference that the Bank is getting close to achieving its goals on both inflation and employment and that the time to begin reducing policy accommodation is fast approaching.
Whilst sovereign yields in both the US and UK ultimately concluded the week higher, it was another volatile week with ongoing concerns relating to the property crisis in China pushing yields lower in early week trading. By the end of the week, the 10-year US treasury had posted a weekly rise of 9 basis points (bps) to 1.46% with the UK gilt equivalent rising by 7bps to 0.92%. In the Eurozone, the 10-year EU benchmark increased by 5bps -0.26% as it inched closer to positive territory.
Moving to equities, global indices bounced back from some early week weakness to record modest gains. The S&P500 rose by +0.5% with the financial sector benefitting from the sharp rise in longer-term bond yields. In the UK, the FTSE100 rose by +1.3% with the mid-cap FTSE250 declining by a modest -0.2%. Meanwhile on the Continent, the French CAC40 and German DAX30 rose by +1.0% and +3.0% respectively. Japanese equities retreated with the Nikkei 225 falling by -0.8% during what was a volatile, holiday shortened week.
In the commodity markets, oil prices declined slightly for the week despite briefly hitting a two month high on Thursday. Brent crude closed the week at $75.23 a barrel, a decline of -0.4% over the previous Friday. Elsewhere, copper prices inched higher to $9,344 a tonne after a weekly rise of +0.4% whilst gold was largely flat at $1,752 an ounce.
It’s a busy week for US macro data releases, kicked off by the latest durable goods orders on Monday. Final Q2’21 GDP is published on Thursday whilst the Institute for Supply Management also releases its PMI equivalents throughout the week. Revised second quarter GDP data is also due from the UK this week alongside the latest consumer borrowing report from the Bank of England. PMI data for the manufacturing index is due on Friday.
In the Eurozone, CPI inflation and unemployment are amongst the standout figures released on the Continent this week alongside the latest PMI numbers, both country specific and EU wide. China also releases PMI figures this week with both official and those from media group Caixin published during the early hours of Thursday morning. As for Japan, there are a number of headline releases to keep an eye on including industrial production, retail sales and unemployment. 
Read last week's market update
 Federal Reserve - Press Release - 22.09.21
 T. Rowe Price - 24.09.21
 Forex Factory - 26.09.21
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