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Bond Market News
Bonds sold off across the world after spiking oil prices
September 11, 2026
Bonds sold off across the world after spiking oil prices fanned inflation concerns with Brent crude climbing above $109/bbl. US Treasury yields rose significantly by 12-15bp across the curve, with the 10Y closing at 4.97% approaching highest levels since 2007. Germany’s 10Y yield rose 6bp to 3.50%, the highest since 2009. Australia’s 3Y yield jumped as much as 20bp to 5.05%, its highest level since 2011. The Houthis advanced towards Red Sea coastal areas gaining ground as fighting with Saudi-backed forces intensified. Saudi Arabia’s oil production slumped to its lowest level since 1990.
On the data front, US Headline PPI YoY for August came in at 5.4% vs. expectations of 5.3% and last month’s print of 4.7%. Core PPI came in at 4.6% in line with estimates of 4.6% but higher than last month’s revised print of 4.3%. Initial Jobless Claims for the prior week came in at 206k vs. expectations of 205k. Separately, Treasury Secretary Scott Bessent downplayed concerns over the smaller-than-expected buyback and rising yields, saying the Treasury market remains in “very good shape.”
Looking at equity markets, the S&P and the Nasdaq closed lower by 0.6% and 0.7% respectively. US IG CDS spreads were 1.3bp wider, while HY CDS spreads widened by 7.9bp. European equity markets ended lower. European IG CDS spreads were 1.4bp wider, and Crossover spreads widened by 7.3bp. Asian equity markets have opened in the red this morning. Asia ex-Japan CDS spreads widened by 0.5bp.
Rating Changes
- U.K.-Based Rolls-Royce Holdings PLC Ratings Raised To ‘A-‘; Outlook Stable
- Fitch Upgrades PERU LNG’s IDRs to ‘B+’; Outlook Stable
- Eurasia Insurance Upgraded To ‘BBB+’; Eurasia Life Upgraded To ‘BBB’; Outlook Stable
- Fitch Revises ASB Bank Limited’s Outlook to Positive, Affirms IDRs at ‘AA-‘
- China Mengniu Outlook Revised To Positive On Improving Business Prospect; ‘BBB+’ Rating Affirmed
Term of the Day: Debt Service Coverage Ratio (DSCR)
Debt Service Coverage Ratio (DSCR) is a credit metric used to understand how easily a company’s operating cashflow or EBITDA can cover its annual interest and principal obligations. The ratio shows how much profit a company makes for every dollar it uses to pay off its debts. The ratio is typically calculated as: (EBITDA)/(Principal+Interest).
Talking Heads
On Too Much AI Borrowing Will End Bull Market in Credit – Viktor Hjort, BNP
“AI is driving credit markets from bond scarcity to bond abundance,… Over the next few quarters, there’s no clear driver of demand that can keep up with the rising supply trend.”
Europe’s Shrinking Bank Liquidity Fuels Hedge Fund Rates Bet – Rohan Khanna, Barclays
“It is the cleanest, easiest, most visible way to position for an eventual liquidity problem,… That is on the screen. You can see it, you can feel it, you can trade it.”
“The key drivers of above-trend inflation are the Iran war, tariffs, and the chip shortage. If the Fed hikes one to two times, that is unlikely to change the backdrop one way or the other,”
Top Gainers and Losers- 11-Sep-26*
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