Portfolio Update – October 2026

General news

• On 01/10/2026, U.S. inflation rose less than expected in August, with the Federal Reserve’s preferred PCE price index increasing 0.3% monthly and 3.4% annually, while core PCE rose 0.2% for the month and 3% year over year. The softer-than-expected data, alongside downward methodological revisions, reduced market expectations for another Fed rate hike in October, with traders shifting expectations toward December. However, inflation remains above the Fed’s 2% target, while energy prices continued to drive upward pressure, with gasoline rising 4.4%. The report also showed personal spending increased 0.9%, while U.S. second-quarter GDP growth was revised sharply higher to a 2.2% annualized rate from 1.5%.
• On 02/10/2026, Treasury yields pulled back Thursday after longer-dated rates reached their highest levels in decades, with the 10-year yield falling 5 basis points to 5.243% after briefly reaching its highest since 2002, while the 30-year yield eased to 5.613% after hitting a 24-year high. Bond yields have also risen across major global markets as persistent inflation, higher interest rates, large fiscal deficits and growing debt-servicing costs weigh on government bonds. Japan’s 10-year yield reached its highest since the mid-1990s, Germany’s topped 3.6% for the first time since 2008, while French, Italian and U.K. yields also climbed sharply, highlighting broader concerns over government borrowing costs and fiscal pressures.
• On 03/10/2026, The U.S. labor market weakened sharply in September, with nonfarm payrolls rising just 29,000 versus expectations for 84,000, while the unemployment rate increased to 4.2%. August job gains were revised down to 133,000, while July was revised to a 10,000-job decline, reducing previously reported employment by a combined 60,000. The weak report pushed Treasury yields lower and boosted expectations that the Federal Reserve will leave rates unchanged at its October meeting, while wage growth also slowed, with average hourly earnings rising just 3% annually. However, the household survey showed stronger conditions, with employment increasing by 406,000 and labor-force participation reaching 61.8%.
• U.S. Treasury yields rose Friday after initially falling in response to a weaker-than-expected September jobs report, with the 10-year yield climbing nearly 5 basis points to 5.281%, while the 2-year and 30-year yields also moved higher. The economy added just 29,000 jobs and unemployment rose to 4.2%, strengthening expectations that the Federal Reserve will hold rates steady at its October meeting, with markets pricing a 77% chance of no change. Despite the softer labor data, investors continued to expect another rate hike later in the year as persistent inflation and higher energy prices keep pressure on the Fed, while European bond yields eased after a sharp selloff earlier in the week.
• On 06/10/2026, China is accelerating the consolidation of smaller and rural banks to strengthen its financial system amid growing economic pressures, with a record 670 lenders closed in 2025, representing about one-quarter of the country’s banks. Fitch Ratings said small rural lenders remain the weakest part of the banking system due to poor asset quality, low capitalization and governance issues, with nonperforming loans reaching 2.8% compared with a 1.5% industry average. Authorities are using mergers and closures to improve oversight, transparency and capitalization, although Fitch said the risks of broader financial contagion remain limited because these banks operate largely in local markets with limited interbank exposure. The restructuring comes as China’s GDP growth slowed to 4.3% in the second quarter, its weakest since 2022, while industrial profit growth also weakened in August.
• On 07/10/2026, Iran has intensified attacks on tankers in and around the Strait of Hormuz, threatening a fragile recovery in Persian Gulf oil exports, with nearly 20 commercial vessels targeted over the past month. Crude shipments averaged about 10.3 million barrels per day in the latest week, roughly 23% below prewar levels, as tankers rely on a U.S.-protected route and costly ship-to-ship transfers in the Gulf of Oman to reduce exposure to attacks. The arrangement has pushed shipping, insurance and security costs sharply higher, with at least nine sailors killed since July and tanker transport to China costing as much as $1 million a day. Analysts warn that while oil flows have improved, Hormuz remains highly insecure, keeping Brent crude near $100 a barrel as the market prices in the high cost and risk of moving supplies.
• On 08/10/2026, U.S. Treasury yields pulled back from multi-decade highs after a strong $39 billion 10-year note auction drew heavy demand from global investors. The 10-year yield had earlier reached 5.35%, its highest since 2002, before settling around 5.286%, while the 30-year yield eased from a 24-year high to 5.666%. Despite the pullback, bonds remain under pressure from rising inflation and energy prices, with the 10-year yield up 60 basis points since July and oil prices up 20%. Meanwhile, Fed minutes indicated that most officials expect another interest-rate hike by year-end, although they provided no guidance on its timing.
• On 10/10/2026, President Donald Trump said Russia will supply more than 4 million tons of diesel to global markets under a deal with Vladimir Putin, as the U.S. temporarily waived sanctions on Russian diesel through April 2027. Ukrainian President Volodymyr Zelenskyy condemned the move, warning that easing sanctions without Russian de-escalation could prolong the war. The agreement comes amid global diesel shortages caused by attacks on refineries in Russia and the Middle East, while Trump faces pressure to reduce fuel prices ahead of the November midterm elections.
• On 12/10/2026, China’s central bank extended its gold-buying streak to 23 consecutive months, adding around 23 tonnes in September, while the country’s gold imports reached a record $158.8 billion in the first eight months of 2026. The purchases reflect Beijing’s efforts to reduce reliance on U.S. dollar assets and growing demand from households seeking safe-haven investments amid a weak property market and declining domestic yields. Despite gold prices falling more than 8% in September from January’s record highs, analysts expect sustained demand to support prices, with one forecast projecting gold at $4,750–$5,500 an ounce by the end of the first quarter of 2027.
• President Donald Trump said the U.S. may join Saudi Arabia in retaliatory action against Iran-backed Houthis after attacks on Riyadh’s main airport reportedly killed 12 people and injured 309. Saudi officials have requested urgent U.S. defense support, while the U.K. is also reviewing assistance but says it will not participate in offensive operations at this stage. The escalation raises the risk of the U.S. becoming more deeply involved in Yemen while already engaged in the Iran conflict, adding pressure to regional security and energy supply routes near the Bab el-Mandeb Strait.
• On 14/10/2026, The IMF raised its 2026 global growth forecast to 3.1% from 3% as AI-driven investment helps offset the economic impact of surging energy costs, while warning that global resilience is weakening. Inflation is expected to reach 4.7% this year and 4.1% in 2027, with oil supply disruptions, mounting public debt and higher borrowing costs adding pressure. Growth is increasingly uneven, with India, Taiwan and the U.S. benefiting from domestic demand and technology investment, while energy-importing economies face greater headwinds. The IMF also cautioned that a sharp reversal in AI investment could trigger a 20% decline in U.S. equities and leave global growth 1.1 percentage points below its baseline forecast by 2028.
• On 15/10/2026, U.S. inflation accelerated in September, with the Consumer Price Index rising 0.6% month over month and 3.7% annually, exceeding economists’ forecasts, while core CPI increased 0.3% monthly and 2.6% year over year. Surging energy costs, driven by the ongoing U.S.–Iran conflict, were the main contributor, with gasoline prices jumping 9.1%, while shelter, used vehicles and apparel also rose. The hotter-than-expected data pushed stock futures lower and Treasury yields higher, while markets increased expectations of further Federal Reserve rate hikes, with the probability of an increase by year-end exceeding 96%. Although officials may look through temporary energy shocks, prolonged conflict, tariffs and AI-related demand could keep broader inflation elevated.
•  On 16/10/2026, AI and semiconductor stocks extended their global sell-off, with 20 of the largest companies in the sector losing more than $1 trillion in market value during the week. Rising U.S. Treasury yields and expectations of further Federal Reserve rate hikes have raised concerns about the cost of financing AI infrastructure, while potential memory-chip oversupply and intensifying competition from China have added pressure. Nvidia, AMD and Intel declined, while Asian chipmakers including SK Hynix and Samsung Electronics suffered sharp losses. Some AI infrastructure stocks rebounded after Nvidia CEO Jensen Huang said CoreWeave’s cost of capital was falling and that Nvidia did not need to provide financial backing. Despite the market turbulence, some analysts view the pullback as a buying opportunity, arguing that underlying demand for AI computing remains strong.
• U.S. producer inflation surged in September, with the Producer Price Index rising 1.3% monthly and 6.3% annually, its largest increases since 2022 and well above economists’ forecasts. Energy costs driven by the ongoing U.S.–Iran conflict were a major contributor, with higher diesel prices also pushing up costs across other goods, while core PPI rose 0.7% monthly and 5% year over year. Combined with hotter-than-expected consumer inflation and stronger retail sales, the data has increased expectations that the Federal Reserve may raise interest rates again, with markets pricing in a greater chance of a hike later this month and most traders expecting at least one increase by year-end.
• Australia’s seasonally adjusted unemployment rate rose to 4.7%, its highest level since the COVID-19 pandemic, as employment fell by 39,300 and the number of unemployed people increased by 8,900. The September-quarter average reached 4.63%, exceeding the Reserve Bank of Australia’s forecast of 4.5% for the December quarter, while the participation rate declined to 66.8%. Economists expect unemployment to rise further as restrictive monetary policy, slower economic growth and lingering energy-price shocks weigh on labour demand, with Oxford Economics Australia forecasting the rate could exceed 4.8% by late 2027.
• On 17/10/2026, Federal Reserve Chair Kevin Warsh declined to signal whether the central bank would raise interest rates again this month, emphasizing a data-dependent approach and rejecting forward guidance ahead of policy meetings. He also highlighted a global shift toward tighter monetary policy as central banks respond to persistent inflation driven by soaring energy costs and the AI investment boom. Markets currently expect the Fed to hold rates steady at its October 27–28 meeting, while most traders anticipate another 25-basis-point hike in December. Warsh remained optimistic that AI could significantly boost long-term productivity and economic growth, but warned that the transition could be turbulent and its near-term impact on employment remains uncertain.
• On 18/10/2026, Oil prices remained near recent highs as markets assessed escalating risks to global supply from Ukrainian drone strikes on Russian oil facilities and attacks on tankers in the Persian Gulf. Brent crude fell $1.04 to $108.82 a barrel, while WTI slipped 26 cents to $101.15. Ukraine resumed attacks on Russian energy infrastructure after Moscow continued strikes despite a proposed truce, while Iran intensified tanker attacks near the Strait of Hormuz in an effort to disrupt regional oil exports, heightening concerns over supply disruptions and energy market volatility.
• On 20/10/2026, South Korean AI services firm Elice Group plunged 30% on its market debut, highlighting growing investor skepticism over AI infrastructure spending as high inflation keeps borrowing costs elevated. The company raised 201.1 billion won ($150 million) through its IPO, with plans to invest most of the proceeds in modular data centers, despite strong institutional demand for the offering. The sell-off has also contributed to delayed listings by several data center companies, including Australia’s Firmus and Blackstone-backed AirTrunk, as investors increasingly question whether AI demand can generate sufficient returns to justify massive infrastructure investments. Despite the weak debut, Elice reported that first-half revenue tripled to 34 billion won and operating profit reached 10 billion won, reversing a loss a year earlier.
• On 23/10/2026, China’s benchmark CSI 300 index entered bear-market territory after falling 20% from its June peak, extending its losing streak to 10 consecutive weeks as investor confidence deteriorates. Persistent challenges, including industrial overcapacity, shrinking corporate margins, a prolonged property downturn and weak consumer demand, have weighed on equities, while geopolitical uncertainty and fears of an AI bubble add further pressure. Heavy participation by retail investors could amplify volatility as households shift toward safer assets such as bank deposits. However, some analysts believe the sell-off is excessive, citing resilient exports, tentative property-market recovery and China’s growing AI capabilities as potential catalysts for a stock-market rebound in 2027.
• On 24/10/2026, Moody’s maintained France’s sovereign credit rating at Aa3 but kept its outlook negative, warning that political fragmentation and social unrest could undermine the government’s ability to control its widening fiscal deficit and rising debt burden. France’s 10-year bond yield recently exceeded 5% for the first time since 2002, while its budget deficit stands at around 5.5% of GDP and public debt is projected to reach 121.7% of GDP in 2027. Moody’s said greater political stability and progress in reducing the deficit could support a return to a stable outlook, as investors remain concerned about higher borrowing costs and the risk of further credit deterioration.
• On 28/10/2026, Anthropic’s anticipated IPO prospectus highlights the significant risks facing the AI industry, with more than 90 pages detailing potential threats to its business, from catastrophic AI-related harm and regulatory disputes to infrastructure constraints. The Claude developer warned that public opposition to data centers, electricity shortages and rising energy costs could hinder its expansion, while potential child-safety concerns may expose it to future legal challenges. Anthropic also faces pressure to maintain its technological lead as competition intensifies, but cautioned that customers could shift to cheaper or open-source models if the performance gains of advanced AI systems fail to justify their higher costs. The disclosure underscores the tension between rapid AI growth, safety responsibilities and the substantial resources required to remain competitive.
• Australia’s inflation accelerated more than expected in September, strengthening market expectations of another Reserve Bank of Australia (RBA) interest rate hike at its November meeting. The Consumer Price Index rose 0.8% for the month, lifting annual inflation to 4.3% from 4% in August, while underlying inflation, measured by the trimmed mean, increased to 3.6%. Housing was the largest contributor to annual inflation, rising 5.2%, adding to concerns that price pressures remain persistent. With the RBA warning that the inflation outlook has deteriorated and markets already pricing in a greater than 60% chance of a rate increase before the latest data, investors are watching the bank’s upcoming decision and revised economic forecasts closely.
•  On 29/10/2026, The U.S. Federal Reserve held interest rates at 3.75%–4% as inflation remained above its 2% target, with two policymakers favoring a 0.25-percentage-point hike. Despite strong consumer spending, low unemployment and AI-driven investment, markets expect another rate increase in December as inflationary pressures persist. Fed Chair Kevin Warsh also announced plans to revise the Fed’s meeting structure from 2027.
•  On 30/10/2027, Alphabet shares plunged 13%, wiping out around $500 billion in market value after disappointing third-quarter results showed negative free cash flow of $9.07 billion and weaker-than-expected search advertising revenue. Despite maintaining its annual capital expenditure forecast of up to $205 billion, investors remain concerned about whether its massive AI investments will deliver sufficient returns. Microsoft shares were relatively stable after reporting lower-than-expected capital spending, although its free cash flow fell 27%. Meanwhile, Google faces growing competition from AI chatbots such as ChatGPT and Claude, putting pressure on its traditional search business as it expands advertising across its AI products.
• U.S. inflation accelerated in September, with headline PCE rising 0.5% monthly and 3.6% annually, remaining well above the Federal Reserve’s 2% target. Meanwhile, third-quarter GDP growth reached 3.4%, exceeding expectations, supported by resilient consumer spending and a 19.4% surge in private investment, particularly AI-related equipment and technology. Despite persistent inflationary pressure, low jobless claims and strong economic activity, the Fed is maintaining rates at 3.75%–4% while assessing incoming data. Rising energy costs remain a key concern, although quarterly inflation eased compared with the previous period.