Global Fixed Income Report - September 11, 2026
Executive Summary
An oil shock repriced the Federal Reserve this week, and everything else followed. Brent rose 7.9% to $104.61 after touching $107.63 on Thursday, its first close above $100 since May. The Treasury curve sold off hard at the front: the 2-year added 24 basis points to 4.63% and the 3-year 25 to 4.69%, while the 30-year managed only 10 to 5.35%. 2s10s flattened from 41 basis points to 33. By Friday's close the market put a 71.3% probability on a hike at the 16 September FOMC, against roughly 56% at the end of August.
The detail that matters is what gold did. It fell 1.4% to $4,408.90 while oil rose almost 8%. In August the two moved together and we read that as investors buying protection against a policy framework they did not trust. This week they separated, and the separation is the signal: this is a real-rate move, not a monetary-disorder move. A Fed expected to tighten raises the opportunity cost of holding a metal that pays nothing, whatever is happening to the oil price. Silver fell 3.0% and copper 2.7%, which says the same thing from the industrial side.
The two inflation prints framed the problem precisely. Wednesday's PPI rose 0.4% on the month and 5.4% on the year, with more than three-quarters of the increase coming from energy and diesel alone up 24.1%. Thursday's CPI was 0.4% on the month and 3.4% on the year, but core slowed to 2.4%, the lowest since 2021. So the Fed is being pushed toward tightening by an energy shock at the exact moment its preferred measure of underlying inflation is at a five-year low. That is the least comfortable position a central bank can be in, and it is why we hold no view on the curve into Wednesday.
African credit had a better week than the headline yields suggest, and the distinction is where the money is. Every performing sovereign we cover saw yields rise: Egypt 21.0 basis points, Ghana 20.0, South Africa 16.4, Nigeria 11.2 and Angola 8.2. Measured against matched Treasuries, though, four of the six tightened. Angola gained 9.6 basis points of spread, Nigeria 7.1 and Ghana 0.5; only Egypt gave ground, at 4.2 wider. Nothing deteriorated in credit terms. The book absorbed a 24 basis point rates shock and came out slightly ahead on spread.
Senegal went the other way and went a long way. Its average yield fell 31.5 basis points and its spread tightened 49, the only credit in the coverage to rally. The 7.75% 2031 led at 53 basis points tighter. The cause was specific: Dakar began transferring funds on 3 September for the 6.75% 2048 coupon due on the 13th, and the market read a government that pays while it negotiates. That is the trigger we published last month.
We are adding to Senegal, but less than the price action invites, and we want to be plain about why. S&P cut the foreign-currency rating to CC on 4 September and the bonds rallied anyway, which tells you the market is trading payment behaviour rather than ratings. Set against that, the restructuring perimeter excludes CFA-denominated domestic debt, and S&P's local-currency rating sits three notches above its foreign- currency rating. Losses are being pointed at external bondholders deliberately. A paid coupon is evidence about liquidity and willingness. It is not evidence about how much principal survives.
