EN
Company Logo

    Bond selloff, Geopolitics & US NFP

    1st September

    • Takeaways
    • Analysis
    • FAQs

    Key takeaways

    1. European stocks and US futures fell as bond yields hit near two-year highs.

    2. Fed hike odds for September jumped from 35% to over 60% after Warsh's hawkish tone last Friday.

    3. Gold sank below $4,400 - inflation fears from rising oil are beating out its usual safe-haven bid.

    Lukman Otunuga

    Lukman Otunuga

    Head of Market Research

    Meet the analyst

    European equities came under pressure on Tuesday as a renewed sell-off in global bond markets weighed on sentiment.


    US equity futures are pointing to a negative open amid the bearish tone.

    Benchmark bond yields climbed to their highest levels in nearly two years, with the US 10-year Treasury yield reaching levels last seen in January 2025. This move followed hawkish remarks from Fed Chair Kevin Warsh last Friday, which pushed bets for a September Fed hike above 60%. Just a week ago the odds were around 35%.

    In the FX space, the dollar extended its advance, supported by higher front-end US yields.

    With geopolitical risk reinforcing demand for havens and a rate hike now firmly back on the table, the currency has strengthened against most G10 peers today. Continued dollar strength could weigh further on major currencies ahead of Friday's US jobs report.

    The US economy is expected to show an increase of 55,000 jobs in August, following July's shock 23,000 decline. A stronger-than-expected print would reinforce the case for near-term tightening and likely support the dollar; a weaker one would revive arguments for the Fed to hold.

    Oil extended its advance for a second session after the first exchange of fire between the US and Iran in roughly a month.

    US forces struck Iranian rocket-launcher positions on Larak Island in the Strait of Hormuz over the weekend, prompting Iranian missile and drone strikes on US-linked sites in Jordan and the United Arab Emirates. Brent crude climbed toward $92 a barrel, while West Texas Intermediate traded near $88.

    Gold tumbled below $4,400 on Tuesday, trading close to its 100-day moving average as renewed geopolitical tensions raised the risk that higher energy prices would fuel inflation.

    This is likely to keep pressure on the Fed to consider tighter policy, even as the metal typically benefits from safe-haven demand during geopolitical flare-ups. Prices remain heavily bearish, with a decisive break below the 100-day average opening a path toward $4,300. Should prices push back above $4,400, bulls may eye $4,500.

    Frequently asked questions

    The US 10-year just hit levels last seen in January 2025, driven by hardened Fed hike bets.

    The US and Iran exchanged fire for the first time in a month - strikes on Larak Island triggered Iranian retaliation in Jordan and the UAE. Brent's near $92.

    Friday's US jobs report. Consensus is 55K, against July's shock -23K. A beat cements the hike case; a miss revives hopes for a hold.

    ForexUSDArticle

    Exinity Limited (www.fxtm.com) with registration number C119470 C1/GBL and registration address at 5th Floor, NEX Tower, Rue du Savoir, Cybercity, 72201 Ebene, Republic of Mauritius is regulated by the Financial Services Commission of the Republic of Mauritius with an Investment Dealer License with license number C113012295, licensed by the Financial Sector Conduct Authority (FSCA) of South Africa, with FSP No. 50320 and is a licensed Over the Counter Derivative Provider.

    Exinity Global Financial Services L.L.C. is registered in the United Arab Emirates under Trade License No. 1395769. Its registered office is located at Office 614, The Binary Tower by Omniyat, 32 Marasi Drive Street, Business Bay, Dubai, United Arab Emirates. It is supervised and regulated by the Capital Market Authority of the United Arab Emirates (“CMA”) under license No. 20200000270 and is licensed as a Category 5 firm to carry out Promotion and Introduction activities

    Exinity Capital East Africa Ltd (www.forextime.com) with registration number PVT-ZQU6JE7 and registration address at West End Towers, Waiyaki Way, 6th Floor , P.O. Box 1896-00606, Nairobi, Republic of Kenya is regulated by the Capital Markets Authority of the Republic of Kenya with a Non-Dealing Online Foreign Exchange Broker with license number 135.

    Risk Warning: Trading Leveraged Financial instruments involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. The value of shares can fall as well as rise, which could mean getting back less than you originally put in. Past performance does not guarantee future results. Before trading, take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. It is the responsibility of the client to ascertain whether they are permitted to use the services of Exinity brand based on the legal requirements in their country of residence.

    Please read our full Risk Disclosure.

    Regional restrictions Exinity Limited does not provide services to residents of the USA, Mauritius, Japan, Canada, Haiti, Iran, Suriname, the Democratic People's Republic of Korea, Puerto Rico, the Occupied Area of Cyprus, Quebec, Iraq, Syria, Cuba, Belarus, Myanmar, Russia, India and the United Kingdom.

    logo
    We value your privacy
    We use cookies to give you the best-possible experience on our site and serve you personalised content. Click "Sounds good" to agree to our Cookie Policy
    Sounds good