Financial Markets Daily Report16 September 2026
The risk-off tone continued into Tuesday's session. Oil surged and extended September's run, driven by supply concerns and the disruption of Saudi Arabia's exports via the Red Sea port of Yanbu. Compounding the pressure, markets moved to a near-certainty on a Fed rate hike today.
Sovereign yields rose across the board, with peripheral euro area spreads widening slightly. 10-year U.S. sovereign yields fluctuated around 5.0% (briefly touching their highest level since 2007), while Germany's 10-year yield rose above 3.5% for the first time since 2009. In FX markets, the USD firmed to a two-week high, weighing on the EUR, GBP and JPY.
Equities fell modestly on both sides of the Atlantic, with U.S. indices underperforming Europe's. Consumer-facing and rate-sensitive stocks underperformed. In commodity markets, European LNG (TTF) dropped on regional technical factors while Asia's LNG rose.
See our expectations for today’s Fed meeting here.