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Bond Market News
France 10Y Yield Touches 2008 Levels, Check Global Bond Yields
September 21, 2026
US Treasury yields rose by 6-8bp across the curve. French 10Y bond yields climbed 12bp to 4.56%, the highest level since 2008, amid rising concerns over fiscal expansion. The chart below highlights 2Y and 10Y bond yields across major global economies:
Meanwhile, US and Chinese officials met in New York yesterday, agreeing to establish an AI dialogue aimed at developing a common understanding of the technology’s goals and threats. Separately, the US warned that fighting between Saudi Arabia and Iran-backed Houthis could “escalate rapidly” after a missile attack targeted Riyadh for the first time since the Yemen conflict resumed.
Kansas City Fed President Jeff Schmid backed last week’s FOMC rate hike as necessary to contain elevated inflation. He noted that price pressures remain broad-based across goods and services. Minneapolis Fed President Neel Kashkari also said inflation remains too high. He added that pressures have broadened beyond the oil-price shock from the Iran war, particularly in services. Both officials said the US economy remains resilient, with solid growth and a balanced labour market.
Looking at equity markets, the S&P and the Nasdaq closed higher by 0.2% and 0.4% respectively. US IG CDS spreads were 0.3bp wider, while HY CDS spreads widened by 2.1bp. 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 higher this morning. Asia ex-Japan CDS spreads tightened by 0.3bp.
Rating Changes
- Moody’s Rating upgrades Shin Kong Life’s IFSR to Baa1; outlook stable
- Moody’s Ratings upgrades Belize’s ratings to B3 from Caa1, maintains stable outlook
- McGraw-Hill Education Inc. Upgraded To ‘BB-‘ From ‘B+’ On Revenue Growth; Outlook Stable
- PM General Purchaser LLC Downgraded To ‘CCC’ From ‘B-‘ On Weaker Vehicle Deliveries; Outlook Negative
- Moody’s Ratings downgrades Poland’s ratings to A3, changes outlook to stable
- Moody’s Ratings changes Greece’s outlook to positive from stable, affirms Baa3 ratings
- Moody’s Ratings affirms Petroperu’s Caa1 ratings; positive outlook
- Fitch Revises Thailand’s Outlook to Stable; Affirms at ‘BBB+’
- Fitch Affirms QatarEnergy at ‘AA’; Outlook Negative
- Moody’s Ratings affirms HSBC Holdings plc’s A3 senior unsecured debt ratings and changes the outlook to positive from stable
Term of the Day: AT1 Bonds
Additional Tier 1 (AT1) bonds are hybrid securities issued by financial institutions to meet their regulatory capital requirements. AT1s typically carry a provision wherein the instruments can be fully or partially written-down or converted to equity if the issuing bank’s capital ratio falls below a certain threshold. The key characteristics of AT1 bonds are:
- They have a perpetual maturity with a call option
- They are subordinated in nature, and the first line of debt to incur losses
- They can be written-down or converted into equity on the occurrence of a “trigger event”
- Coupons are usually higher as compared to other debt by the issuer, to compensate investors for the higher risk AT1s carry. However, coupons can be discretionary in nature.
Talking Heads
Record Global Debt Requires Urgent Fiscal Action – Kristalina Georgieva, IMF
“We have been warning that fiscal consolidation must take place, and we are seeing a lot of understanding, but not enough action”
On Wanting a Less Activist Central Bank – Howard Marks, Oaktree Capital
“My personal preference is for a less activist central bank that normally lets the economy do its thing, unless it’s in danger of going off the rails, too hot or too cold”
“I prefer EM local currency bonds to EM dollar debt over the next few months, but would take a selective approach rather than seek broad index exposure,… I favor Latin America, particularly Brazilian local currency bonds, with a focus on the front end of the curve (supported by attractive carry and real yields)”
Top Gainers and Losers- 21-Sep-26*
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