General Market News

China confirmed that senior trade negotiators from the U.S. and China held their first discussions on artificial intelligence in New York ahead of a summit between President Xi Jinping and President Donald Trump. The talks also covered plans for reducing tariffs and extending the trade arrangements agreed in Kuala Lumpur in October 2025, which had kept tariffs lower and limited China's rare earth export controls.

• China's Vice Premier He Lifeng met with U.S. Treasury Secretary Scott Bessent in New York prior to the Xi-Trump summit in Washington, D.C.
• Discussions included establishing a mechanism to alert each other about AI risks as both countries address concerns over rapidly advancing autonomous technology
• The two sides plan to extend the October 2025 trade truce that limited tariffs and China's export controls on rare earths, which are critical for semiconductors and defense products

New York Federal Reserve President John Williams stated it is 'reasonable' to expect another interest rate hike by year-end, following the Fed's recent quarter-point increase that brought rates to 3.75%-4%. Williams emphasized the Fed is ending explicit forward guidance and will instead rely on incoming data to determine future policy moves.

• Markets are pricing in a 77.5% probability of an October rate hike, up from 53% the previous day, according to CME Group's FedWatch tool
• The Fed raised its benchmark rate by 0.25 percentage points earlier in the month to a target range of 3.75%-4%
• Other Fed officials including Boston Fed President Susan Collins have signaled concern that inflation will remain 'notably' above the 2% target, supporting the case for additional rate increases

Serbia's Russian-owned oil company NIS has applied for a new US sanctions waiver to continue operations beyond September 30, when its current exemption expires. The company, majority owned by Gazprom Neft and Gazprom, was sanctioned by the US in October over its Russian ownership amid broader measures targeting Moscow's energy sector following Ukraine's invasion.

• NIS operates Serbia's only oil refinery and supplies up to 80% of the Serbian market, making continued operations crucial for the country's energy stability
• Gazprom Neft and Gazprom hold a combined 56.16% stake in NIS, while Serbia owns 29.9% of the company
• The waiver would allow NIS to continue importing crude oil until the planned sale of the Russian stake to Hungarian oil and gas company MOL is completed

Global debt surged by $10 trillion in the first half of the year to exceed $365 trillion, with economists warning that major economies including the U.S., Japan, France, and U.K. are trapped in a 'vicious cycle' of large deficits and rising interest costs. The IMF and other international organizations are urging governments to prioritize fiscal consolidation, though political challenges make necessary reforms difficult to implement.

• Advanced economies paid over $3.3 trillion in interest on government bonds last year, exceeding global spending on AI ($2.6 trillion), defense ($3.1 trillion), or clean energy ($2.3 trillion)
• Major developed economies now face challenges typically associated with debt-distressed emerging markets, as yields on medium- and long-term bonds hit decade-high levels
• IMF chief Kristalina Georgieva emphasized the urgent need for politically difficult but necessary steps to bring debt down and achieve fiscal consolidation

China raised retail gasoline and diesel prices on September 24 following gains in global oil prices, but capped the increases at roughly half the scheduled amount to cushion domestic market impact. This marks the fourth time China has limited fuel price increases since the US-Israeli war on Iran began on February 28. After the adjustment, fuel prices remain 24-26% higher than pre-war levels.

• Gasoline prices will rise by 395 yuan per ton and diesel by 385 yuan per ton, about half the scheduled increases of 830 yuan and 800 yuan respectively under China's pricing mechanism
• China previously raised and capped fuel prices on September 11, part of a pattern of price controls implemented four times since the Iran conflict started
• Despite the caps, retail gasoline is now 24% higher and diesel 26% higher compared to prices before the US-Israeli war on Iran began in late February

The Swiss National Bank maintained its key interest rate at 0% despite a global tightening cycle, with inflation at 0.8% remaining within its 0-2% target range. Markets are pricing in roughly even odds of a rate hike by December and over 90% probability of increases beginning by early 2027. Switzerland's strong franc, low inflation expectations, and unique energy mix have helped contain price pressures, though recent franc weakness may accelerate the hiking timeline.

• Switzerland's August inflation of 0.8% contrasts sharply with higher rates in the U.S., U.K., and euro zone, whose central banks have all begun raising rates with 2% inflation targets
• The Swiss franc's safe-haven status and 12% appreciation against the dollar in 2025 (though 4% has been retraced) helps keep import prices low and inflation contained
• Traders expect the SNB's key rate to reach at least 0.75% by September, with UBS warning that recent franc depreciation of over 2% against the euro could prompt earlier-than-expected rate hikes

Treasury yields continued climbing Thursday after the 10-year yield hit a 19-year high of 5.104%, driven by strong U.S. business activity data that increased expectations for additional Federal Reserve rate hikes. The surge follows September PMI data showing services activity at nearly five-year highs, with traders now pricing in a 70% chance of an October rate increase.

• The 10-year Treasury yield reached 5.124% after hitting 5.104% on Wednesday, its highest level since 2004, while the 30-year yield rose to 5.42%
• S&P Global's services PMI jumped to 58.7 in September, the highest in almost five years, while manufacturing PMI reached 56.7, reinforcing expectations of economic resilience
• Market participants now see a 70% probability of another Fed rate hike at the October FOMC meeting, up significantly as strong economic data suggests the Fed can continue tightening to combat inflation

Iran's diplomatic overtures toward de-escalation are reducing geopolitical risk premiums in crude oil markets, while natural gas remains tight due to reduced LNG capacity. Saudi Arabia is compensating for constrained Strait of Hormuz flows through alternative export routes, and higher U.S. crude inventories are adding bearish pressure to oil prices. The outlook is neutral for crude oil but moderately bullish for natural gas.

• Only seven vessels passed through the Strait of Hormuz on Wednesday, well below the recent 10-day average, though Saudi Arabia's East-West pipeline and ship-to-ship transfers are mitigating supply shortages
• Recent attacks on Qatar's LNG facilities reduced the country's LNG capacity by approximately 17%, with repair estimates extending three years, tightening global natural gas markets
• U.S. crude inventories increased by 3.6 million barrels with lower refinery utilization providing bearish counterweight, while natural gas broke above $3.01 resistance with technical targets at $3.10 and $3.16

Chinese AI startup DeepSeek's annualized revenue run rate has reached $1 billion, more than doubling from less than $500 million just a few months ago, according to The Information citing sources with direct knowledge. This rapid revenue growth highlights the company's accelerating market traction in the competitive AI sector.

• Revenue more than doubled in a matter of months, jumping from under $500 million to $1 billion annualized run rate
• The report comes from two sources with direct knowledge of the matter, though Reuters could not independently verify the figures
• The rapid growth demonstrates DeepSeek's strong momentum in China's competitive artificial intelligence market

Chinese EV manufacturers including Geely, BYD, and Li Auto are competing to develop ultra-fast charging technology that can charge vehicles in under 10 minutes, significantly faster than Western rivals like Tesla. The race aims to reduce range anxiety and boost demand in China's slowing EV market, though the technology poses engineering challenges including fire risks, battery degradation, and potential power grid strain.

• Geely's new system can charge from 10% to 70% in 4.5 minutes using 2.25 megawatt output, while BYD and Sunwoda claim 10% to 97% charging in 9 minutes—roughly half the time of Tesla Superchargers (15-25 minutes for 10%-80%)
• Companies are addressing safety risks through advanced liquid cooling systems, shorter battery cell designs, and AI algorithms that can predict temperature rises 30 seconds in advance to prevent overheating and fires
• Infrastructure buildout is becoming the next focus, with BYD planning 90,000 flash-charging stations by 2028 and stations integrating battery storage plus solar power to prevent grid collapse from multi-megawatt charging demands

Oil prices declined Thursday despite rising geopolitical tensions, as data showed Asia is set to import 23.96 million barrels per day in September, the highest volume since February and the start of the US-Iran conflict. Brent crude fell 0.52% to $102.54 per barrel while WTI dropped 0.34% to $91.85 per barrel.

• Asian crude imports increased to 23.96 million bpd in September from 23.38 million bpd in August, marking the highest level since the Iran war began in February
• Iranian President Masoud Pezeshkian blamed the U.S. and Israel for global instability at the UN General Assembly, vowing Iran will 'fight back until our last breath'
• Markets remain sensitive to risks including potential monetary tightening, Middle East escalation, and ongoing U.S.-China discussions on trade and supply chains

Japan's 10-year government bond yield rose to 3.055% on Thursday, its highest level since August 1996, tracking a surge in U.S. Treasury yields that reached a 19-year high. The spike was driven by rising oil prices, stronger-than-expected U.S. PMI data, and weak demand at a Treasury auction, with concerns amplified by a weakening yen.

• The benchmark Japanese 10-year yield climbed 8 basis points to 3.055%, while the 5-year yield rose nearly 7 basis points to 4.134%
• U.S. Treasury yields surged across the curve, with 5-year yields pushing above 5% following a poorly received $70 billion auction
• Earlier this month, U.S. Treasury Secretary Scott Bessent signaled expectations for Tokyo and the Bank of Japan to take action supporting the falling yen, contributing to upward pressure on Japanese borrowing costs

Oil prices declined on Thursday, with Brent crude falling 0.9% to $102.13 and WTI dropping 0.7% to $91.56, after Iran indicated openness to diplomacy to end its war with the United States. The decline followed a 4% rally in the previous session, as markets weighed Iran's review of US peace proposals focused on lifting the naval blockade and reopening the Strait of Hormuz.

• Iran is reviewing US peace proposals that prioritize lifting the naval blockade on Iranian ports and reopening the Strait of Hormuz, though significant disagreements remain between the two countries
• US crude inventories rose by 3 million barrels to 426.4 million barrels last week, contrary to analyst expectations of a 641,000-barrel draw
• Markets also reacted to confusion over potential US diesel export curbs, with Energy Secretary Chris Wright reportedly telling oil industry leaders to prepare for possible restrictions despite earlier denying such plans would work

The U.S. and China have extended their trade truce until January 10, Treasury Secretary Scott Bessent announced as Chinese President Xi Jinping arrived in Washington, D.C. for a state visit through Friday. The extension is shorter than the six months or longer many had expected, with Bessent noting Beijing needs to fulfill more deliverables.

• The trade truce, originally agreed by Xi and Trump in South Korea last October and set to expire in November, will now be extended by two months to January 10
• The extension is significantly shorter than the six-month or longer period many analysts had anticipated ahead of the summit
• Treasury Secretary Bessent met with Chinese Vice Premier He Lifeng in New York prior to Xi's arrival, with the extension announcement coming as Xi landed in Washington for his state visit

Two U.S. senators from Maine asked President Trump to release emergency heating oil from the Northeast Home Heating Oil Reserve as diesel prices have surged to record levels above $6.50 per gallon due to wars in Iran and Ukraine. Maine households are paying about $675 more to fill heating oil tanks compared to last year, creating significant financial strain in the state most reliant on home heating oil.

• Republican Senator Susan Collins and Independent Senator Angus King jointly requested the release, with Collins facing a tight reelection race where energy costs are a 'huge issue'
• The Northeast Home Heating Oil Reserve holds 1 million barrels across four sites (roughly 10 days of supply for the region) and has not been tapped since Hurricane Sandy in 2012
• Diesel prices exceeding $6.50 per gallon have also prompted calls for export bans, though the White House denied reports it is preparing a 90-day diesel export ban

Bitcoin is poised to achieve its first Q3 winning streak (July-September gains) since 2012, when it traded around $10. With July and August closing higher and September currently up 8.8%, Bitcoin needs to close above $78,563 on September 30 to secure the streak. The article examines what happened after the 2012 streak and whether historical patterns can predict current market movements.

• Bitcoin closed July at $62,826 (up 7.4%) and August at $78,563 (up 25%), requiring it to hold above $78,563 by September 30 to complete the winning streak from its current price of $85,488
• After the 2012 winning streak, Bitcoin initially dropped 10% in October but then surged 2,000% to $266 by April 2013, though this occurred in a vastly smaller market worth only $125 million
• Today's market is fundamentally different with Bitcoin ETFs holding 6.3% of all Bitcoin and taking in $999 million on September 21 (their best day in a year), plus 190 companies holding Bitcoin in corporate treasuries as of February 2026

US stocks fell sharply on Wednesday, with the Dow dropping 352 points, as the 10-year Treasury yield surged to 5.1%, its highest level since July 2007. Stronger-than-expected economic data fueled expectations that the Federal Reserve will raise rates again in October, with market odds jumping to above 66%. Rising oil prices from Iran-US tensions added to inflation concerns, pressuring equities further.

• The 10-year Treasury yield hit 5.1%, a 2007 high, while the 2-year yield reached 4.947% after September PMI data showed US business activity at a five-year peak, driving Fed rate hike probability for October from 8.8% a month ago to over 66%.
• Technology stocks led declines with the Nasdaq falling 1.13%; Alphabet dropped 3%, Nvidia fell 1.2%, and Amazon declined 2.2%, though Meta rose 1% on strong AI assistant reception.
• Oil prices surged (Brent up 4.4% to $103.67, WTI up 2.6% to $92.91) amid escalating US-Iran tensions, compounding inflation fears and adding pressure on rate-sensitive sectors like utilities, which fell 1.72%.

Treasury yields surged to multi-year highs on Wednesday, with the 10-year note hitting 5.125% (highest since before the 2008 financial crisis) and the 2-year climbing past 4.9%. The spike, driven by higher inflation data and expectations for another Fed rate hike in October, threatens to raise borrowing costs across the economy for consumers holding nearly $19 trillion in debt.

• Mortgage rates have risen to 7.26%, up a full point over the past year, while credit card rates face upward pressure as the prime rate increases alongside Fed hikes
• Consumers, who drive nearly 70% of economic activity, will face higher borrowing costs that far outweigh modest gains in savings account yields (currently around 0.37%)
• Small and medium enterprises face the greatest credit squeeze, while even bank stocks declined despite typically benefiting from higher rates due to concerns about slowing loan demand

Long-term interest rates have surged globally, with U.S. 30-year Treasury yields exceeding 5.3% and 10-year yields topping 5%, reaching nearly two-decade highs. The increases reflect multiple factors including persistent inflation, AI infrastructure investment demands, and expanding government deficits creating competition for capital. Treasury Secretary Scott Bessent has responded by doubling liquidity buyback operations, signaling policymaker sensitivity to sustained yield increases.

• The U.S. budget deficit is running at approximately 6.4% of GDP, while AI buildout and infrastructure needs are driving unprecedented private-sector capital demand, forcing borrowers including the U.S. Treasury to offer higher yields
• Treasury announced it will at least double long-term liquidity buybacks from $2 billion to $4 billion per operation and may use the $950 billion Treasury General Account to fund purchases, effectively implementing a 'Treasury Twist' strategy
• Higher real yields and term premiums, rather than inflation expectations alone, are driving the nominal yield increases, with similar patterns appearing across Japan, Germany, France, and the United Kingdom

LATAM Airlines Group faces multiple headwinds including currency volatility, elevated fuel costs, and margin pressure, leading analysts to revise earnings estimates downward for 2026 and 2027. The stock trades at a premium valuation compared to the airline industry despite deteriorating fundamentals. Zacks Investment Research has assigned the stock a Rank #4 (Sell), recommending investors avoid the stock at current levels.

• LATAM recorded $33 million in Q2 foreign exchange losses due to currency movements, with exposure across Brazilian real and other Latin American currencies despite hedging 64% of Q3 and 42% of Q4 Brazilian real cash flow mismatches
• Aircraft fuel costs surged 93.1% year-over-year to $1.71 billion in Q2, with average fuel prices rising 81.3% to $194.50 per barrel, causing adjusted operating margin to fall from 12.9% to 5.4%
• The stock trades at a forward P/S ratio of 0.83X versus the industry average of 0.52X, indicating expensive valuation, while consensus earnings estimates for 2026-2027 have been revised downward in the past 60 days