03/09/2026 – Daily Reports
Daily Market Highlights
- Markets are showing a modest recovery today after the recent sell-off. Asian equities and bonds gained as U.S. Treasury yields eased from recent highs. Investors remain focused on whether the Fed will raise rates in September, with market pricing currently implying roughly a 66% probability of a hike.
- Oil remains elevated as renewed U.S.-Iran tensions and risks around the Strait of Hormuz continue to support prices. Brent moved above $95 yesterday before easing slightly today. Higher oil prices remain a major inflation and Fed policy risk.
- Gold rebounded as the dollar and Treasury yields weakened. Spot gold moved above $4,430, gaining more than 1%. Markets are now looking ahead to Friday’s U.S. nonfarm payrolls report, which could significantly influence September Fed expectations.
- The main focus today is on Fed officials and U.S. economic data, while Friday’s NFP report remains the key market event of the week.
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Global Market News Summary — 3 September 2026
- US indices closed higher on Wednesday, with the Nasdaq up 0.2%, the S&P 500 up 0.5% and the Dow up 295 points to 53135, as technology and financial shares recovered from the recent rise in Treasury yields. Dell and Palo Alto Networks reported strong results, while indices had opened flat after the 10-year yield closed at a two-year high and ADP employment growth came in below estimates. Fed funds futures now imply roughly a 68% probability of a rate increase at the meeting in two weeks.
- The DAX fell 0.50% on Wednesday to close at 25885, a third consecutive decline and a one-month low, as higher oil prices fed inflation concerns and European bond yields extended their sell-off. Volkswagen dropped after confirmation it will leave the Euro Stoxx 50 on 21 September; Adidas gained on a Barclays upgrade and Deutsche Bank on a Goldman Sachs upgrade. Euro area inflation rose to 3.3% in August from 2.9%, with an ECB hike to 2.5% almost fully priced.
- Nikkei index fell 2.60% on Wednesday to 64,495, with Japan’s 10-year yield reaching 3% for the first time since 1996 and Governor Ueda signalling greater attention to upside price risks. SoftBank Group, Taiyo Yuden and Fujikura led losses. Thursday’s session opened at 64,325.64, unchanged from the prior close, with the index trading near 64,200–64,411 as a stronger yen weighed on exporters while the Topix advanced.
- Spot gold closed near $4387 per ounce on Wednesday . The metal is down 5.62% over the past week, as persistent inflation linked to the Iran conflict and comments from Fed Chair Kevin Warsh lifted rate-hike expectations.
- Brent futures settled at $95,23 on 2 September, up 13.24% over the month, after US strikes on Iranian targets around the Strait of Hormuz followed attacks on two tankers; Iran has said it targeted US regional bases. A Ukrainian drone strike also caused a fire at Russia’s Ust-Luga export terminal. Prices are around $94,50 today, with OPEC+ expected to hold output steady.
Rates: Global Bond Markets Face a Critical Test
- Global Bond Markets Under Pressure: Long-end yields across major developed markets are facing synchronized upward pressure, raising concerns that the bond sell-off could become more disruptive.
- Japan Leads the Move: Japan’s 30-year yield has touched 4.2%, around four times the current 1% policy rate. The widening gap highlights growing tension between BoJ policy and market expectations.
- A Weak Yen Adds to the Pressure: The sharp weakness in the Japanese yen has already triggered U.S.-Japan intervention, highlighting concerns about growing market instability.
- U.S. 10-Year Yield Nears 5%: The U.S. 10-year Treasury yield is around 4.8%, with a move toward 5% increasingly likely.
- 5% Is the Key Level: A sustained break above 5% could trigger stronger resistance from the U.S. Treasury, particularly as policymakers remain uncomfortable with elevated long-term borrowing costs.
- Fiscal Deficits Remain the Core Problem: The U.S. fiscal deficit is around 6% of GDP, while inflation is running near 3.5%. Until fiscal pressures are addressed, upward pressure on long-term Treasury yields may persist.
- Europe Faces Multiple Headwinds: Higher defense spending, fiscal expansion and energy-related inflation are pushing European long-end yields higher.
- UK 30-Year Yield Nears 6%: The rise in UK gilt yields adds another source of pressure to global bond markets and reinforces the broader trend toward higher long-term rates.
- Real Yields Are the Biggest Concern: The latest rise in long-end yields is being driven predominantly by higher real rates, making the move more difficult to reverse.
- AI Could Keep Yields Elevated: Massive AI investment is fueling expectations of a productivity boom and stronger long-term economic growth. Higher growth expectations can translate into persistently higher real yields.
- Bessent Faces a Difficult Task: U.S. Treasury Secretary Scott Bessent has already doubled long-end Treasury buybacks, with the next round beginning September 9. However, ING warns that buybacks may not be enough to fully absorb the pressure.
- Risk of a Bond Market Overshoot: With fiscal deficits, rising real yields, stronger defense spending, AI investment and energy shocks all pushing in the same direction, long-end yields could overshoot before markets stabilize.
