Global Monthly Fixed Income Report - September 2026
Executive Summary
September was the month the bond market stopped arguing about the Federal Reserve and started arguing about supply. The Fed raised rates on the 16th, its first hike since 2023, taking the target range to 3.75% to 4.00%. That was the smaller half of the story. Across the month the 3-year and 5-year both rose 60 basis points to 5.00% and 5.09%, the 10-year 54 to 5.29%, and the 30-year 39 to 5.64%, a level it last saw in 2002. Nothing in the coverage escaped it.
The month had two distinct halves and reading them separately matters more than reading the net. Through 18 September the front end did the work: the 2-year rose 42 basis points while the 30-year moved 9. That was a policy repricing and it was orderly. From the 18th the pattern inverted. The 2-year added 12 more basis points and the 30-year added 30, touching 5.612% intraday on the 29th. The second half was not about the Fed at all.
What drove it was term premium, which reached a ten-year high during the month. The evidence is in what did not happen. Gold fell 6.6% to $4,186.70 and silver 9.6% to $60.566, closing the month at its low. A bond market losing faith in a central bank's inflation resolve bids gold; it does not sell it to a monthly low. Then on 30 September core PCE printed softer than expected and long yields rose anyway. An inflation story would have rallied on that number. What is repricing is the compensation investors demand for lending long, against deficits, an energy shock and a corporate issuance calendar funding the artificial intelligence capital cycle.
We closed our 20 to 30-year Treasury overweight on 25 September, acting on an exit condition we had published a fortnight earlier. The timing was adequate rather than good. We held the position through 39 basis points of the move and exited 15 basis points before the month's high. Over the month our duration positioning cost us; the discipline of writing the exit condition down in advance is what stopped it costing more.
In African credit, the headline yield numbers overstate the damage because the risk-free curve moved 54 to 60 basis points underneath them. Egypt widened 96.2 basis points in yield and 48.3 against matched Treasuries, which is a genuine underperformance and the worst in the coverage. Everything else held up better than it looks. Nigeria widened 54.6 in yield but only 2.3 on spread, Angola 53.2 and 0.8. Those two credits absorbed a 60 basis point move in Treasuries without losing ground, which is the most encouraging thing in this report.
Senegal is the month's genuine surprise and it is the reason we have given it a dedicated section. It tightened 42.2 basis points against Treasuries, the only credit in the coverage to gain spread. More striking is the price: the three bonds finished the month at 51.57, 51.31 and 51.06 cents against 51.82, 51.27 and 50.31 at the start. A paid coupon, a two-notch downgrade to CC, and tabled restructuring terms proposing a 50% to 60% loss moved the price by essentially nothing, having swung between 48.62 and 52.95 along the way. The market has settled on a recovery estimate and has stopped trading the news.
