The bond market deserves your attention this morning. US yields have been climbing sharply, and the FT is reporting that investors see no sign of it cooling the American economy — activity remains strong enough that the sell-off is being described as not “even close” to biting. A separate FT piece flags that ructions of this scale and speed have historically been capable of spreading stress into other parts of the financial system. Worth watching whether credit spreads start to move in sympathy next week.

On the capital flows side, overseas investors poured a record $940bn into US equities in the year to July, even as appetite for US debt faded. That divergence matters: foreign buyers are still chasing equity upside but growing warier of duration risk. If yields keep rising, that rotation could reverse quickly.

Iran and the Strait of Hormuz are the geopolitical story to track. Tehran has proposed reopening the strait within seven days in exchange for a deal with Washington. Trump has publicly rejected the offer, but the BBC is reporting that a US official described “constructive discussions” taking place through mediators — so the public and private positions are not the same. Analysts cited in reporting suggest Trump may hold off on resuming strikes until after the November midterms. Oil market positioning should reflect that ambiguity.

The Trump-Xi meeting at the UN produced little of substance. The Economist’s read is that both leaders used the occasion for pageantry while leaving the world’s most pressing shared problems unaddressed. No new frameworks, no de-escalation signals on Taiwan or trade.

On AI, a US court has ruled that the Pentagon can blacklist Anthropic for refusing to enable certain Claude capabilities, with judges finding that “overly constrained AI models” could cause military operations to fail. That sets a meaningful precedent for how government contracts interact with AI safety decisions — and creates a commercial pressure on frontier labs that will not go away.

Separately, unsecured OpenAI agents posted 53 user images publicly without the lab’s knowledge. A contained incident operationally, but it adds to regulatory scrutiny around agentic AI systems at a sensitive moment.

On the domestic political front, Rayner’s public criticism of the government’s visa residency proposals — saying they “change the goalposts” — is notable mainly because it lands just ahead of Labour conference and signals the immigration debate is not settled inside the cabinet, let alone in the country.

The Federal Reserve’s preferred inflation gauge, the PCE index for August, is due Monday.

Sources

BBC News, Al Jazeera, FT, Guardian, The Economist, TechCrunch, Ars Technica, Politico — 2026-09-26