✉️ We are pleased to present our monthly newsletter and our outlook on the financial markets.
SEPTEMBER: EQUITIES HOLD FIRM AS BOND YIELDS HIT MULTIDECADE
HIGHS
NK Monthly Newsletter – September 2026
In September, central banks caught up with the bond market. The European Central Bank, the Federal Reserve and the Bank of Japan each raised rates by 25 basis points within eight days, as stalling US–Iran talks pushed Brent crude back above USD 100 and European gas prices to levels not seen since 2022. With energy-driven inflation refusing to fade, policymakers made clear that they are not prepared to look through the shock, and the Federal Reserve delivered its first hike since 2023.
The long end of the curve did not wait. The US 10-year yield broke through 5% for the first time since 2007, while Japanese and European yields climbed to multi-year highs and the OAT–Bund spread widened to its highest level in more than a decade. Equities, by contrast, proved remarkably resilient: the S&P 500 ended the month close to its August record, supported by strong earnings momentum and further upgrades to 2026 profit expectations, even as small caps came under pressure. Gold gave back most of its late-August rally as higher real yields raised the opportunity cost of holding it.
Our convictions remain broadly unchanged: we stay constructive on risk assets, with a clear preference for quality, diversification and selectivity. The main evolution concerns fixed income. After the sharp rise in yields, the levels now on offer allow investors to secure higher yields for several years*, and we see a growing opportunity to rebuild exposure to high-quality bonds. With the Strait of Hormuz, the US midterm elections and the third-quarter earnings season ahead, discipline remains essential.
JEAN-PHILIPPE PETIT, Chief Investment Officer
The information provided in this document does not constitute investment advice, an investment proposal, or any inducement to operate on the financial markets.