Weekly Markets Monitor - Bonds back in the room
19 October, 2026
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Highlights
- Last week, Middle East tensions intensified amid attacks and continued disruptions in the Strait of Hormuz, pushing oil prices higher. President Trump also waived additional tariffs of up to 100% on major buyers of Russian energy. On the macro front, US consumer and producer inflation picked up in September, reviving expectations of further Fed tightening. Inflation also firmed in the euro area, India and China, while strong exports widened China’s trade surplus.
- Global equities closed the week mixed, alongside lower US Treasury yields, a stronger US dollar and higher oil prices.
- The 10-year Treasury rally (yield drop) during the current Nasdaq sell-off stands out, particularly as inflation has recently surprised to the upside. Reminiscent of February 2025, when inflation was also picking up, but unlike July 2024 when it was softening, it suggests investors may be looking to bonds for safety again as equity risks intensify (C.O.T.W). For gold it sends a mixed message: renewed bond demand might compete for safe-haven flows, but falling yields reduce gold’s opportunity cost and could provide support if the equity rout worsens.
Chart of the week: Bonds back in the room
*Peak to trough Nasdaq index drawdowns since 1 Jan 2023 and 10-year Treasury yield changes in bps. Data as of 16 October 2026.
Sources: Bloomberg, World Gold Council.
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