Financial Markets Daily Report21 octubre 2026
French bond stress deepens The French spread reached 153bps, its widest since early October, as France's fiscal and political pressures continued to weigh on sovereign debt. The euro weakened as the French spread widened, with ECB Governing Council member Rehn acknowledging the spread had moved "somewhat”.
Middle East tensions drive volatile energy and rates session. Brent crude briefly surged above 111$ per barrel, on fears of Iranian attacks in the Strait of Hormuz before retreating to around 106$ per barril on unconfirmed reports of a fresh diplomatic proposal to revive negotiations. The energy pullback drove a broad European bond rally, with German 10-year yields falling 6bps to 3.4% in their largest single-day drop since 1 October, while US 10-year Treasuries dipped to 5.1%
US housing hits record low. On the US macro front, pending home sales plunged 7.3% in September to a record low since data began in 200, as elevated mortgage rates continued to suppress demand.