Bond yields were nudging higher again in Europe as oil prices moved back above $105 a barrel and as traders waited for what could be a tense meeting between US President Donald Trump and Chinese counterpart Xi Jinping in Washington later

International News via Reuters:

World financial markets remained on edge on Thursday after concerns about the Iran war and inflation pain had triggered the sharpest selloff in US Treasuries and other benchmark government bonds since last year’s Liberation Day turmoil.

Bond yields were nudging higher again in Europe as oil prices moved back above $105 a barrel and as traders waited for what could be a tense meeting between US President Donald Trump and Chinese counterpart Xi Jinping in Washington later.

The 10-year US Treasury yield – the benchmark of the $29-trillion Treasury market that anchors pricing for virtually all financial assets globally – touched a new post-financial-crisis high of 5.145% in early European trading.

The difference between what France and Germany pay to borrow was also at its widest since Mario Draghi’s “Whatever it Takes” speech of 2012, while Japan’s 10-year yield had jumped to a 30-year high overnight in Asia.

Strong PMI data and a weak US government bond sale had compounded Wednesday’s global rout and AXA’s Chief Economist Gilles Moec said all the ingredients were now in place for a rise in long-term interest rates.

“Inflation is high, central bankers are giving hawkish messages, there’s competition from the funding needs of the tech sector and there are no reassuring signs on the US debt trajectory,” Moec said.

“They are all fairly big macro issues and on top of that you have the binary geopolitical issue of what is happening in the Middle East.”

UNDER PRESSURE

The latest rise in oil came as doubts grow again about the chance of a US-Iran deal, despite the talks at the UN this week. Reports have also suggested that Trump is considering a possible export ban on US-produced diesel.

Analysts at Deutsche Bank pointed to Iran foreign ministry comments that it had presented a list of conditions to the US for restarting truce talks, that included the acceptance of a shipping route agreed by Oman and Iran, along with an end to the naval blockade and the release of Iran’s frozen assets.

And Iran’s President Pezeshkian struck a defiant tone, saying that Iran would not allow freedom of navigation through Hormuz while the US blockade and sanctions remained in place.

MSCI’s main world share index, the pan European STOXX 600 and Wall Street futures all moved lower amid the unsettled mood. [.EU]

History offers some guidance on how painful spikes in bond market borrow costs can be for stocks. The MSCI world index halved in value after the last time the 10-year Treasury yield broke 5%, which was just before the global financial crash.

It suffered a similar slump less than a decade earlier too when a near 6.8% spike helped pop the dotcom bubble.

“There is definitely angst in the bond market. There are no two ways about it,” said Pictet Asset Management strategist Arun Sai.

“We are going through a period where the steady state equilibrium has been challenged in a number of ways, and it’s competing narratives, and it’s not yet obvious which of these is right,” he added.

POWER COUPLE

Xi and Trump’s meeting later is part of Xi’s first trip to the US in nearly three years and comes after Trump visited China earlier in the year.

Analysts expected few if any major breakthroughs, but the news on Wednesday was that Washington and Beijing could extend their 11-month trade truce.

Treasury Secretary Scott Bessent said they had reached a deal on an initial 2-month extension as Trump greeted Xi personally at Joint Base Andrews in Maryland.

In the currency market, the dollar was hovering at a two month high against a basket of other top world currencies following the sharp rise in Treasury yields which effectively makes dollar-denominated assets more attractive.

Following Wednesday’s hot PMI data, traders also now see a nearly 70% chance of another increase when the US Federal Reserve next meets in October, according to CME Group’s FedWatch Tool, up from 50% a week ago.

On the economic front, the US Labor Department is expected to report later that initial jobless claims likely rose to 201,000 in the week ended September 19, while continuing claims likely increased 15,000 to 1.745 million in the prior week. New home sales are forecast to edge up to 615,000 units in August from 607,000 units in July.

Speeches are also due from a flock of Fed and ECB officials on Thursday, including New York Fed President John Williams and Cleveland Fed President Beth Hammack and ECB Executive Board members Isabel Schnabel and Philip Lane.

Additional reporting by Naomi Rovnick in London; Editing by Louise Heavens

The outbreak was detected in May and is already the second most lethal on record, behind one in West Africa from 2014 to 2016

International News via Reuters:

The US State Department on Wednesday pledged an additional $267 million toward fighting the Ebola outbreak in central Africa, as health authorities battle to get the deadly virus under control. 

Senior State Department officials announced the funding on the sidelines of the UN General Assembly, where they hoped other countries would pledge new funds toward a target of $2 billion to deal with the disease, mainly in the Democratic Republic of the Congo.

The outbreak was detected in May and is already the second most lethal on record, behind one in West Africa from 2014 to 2016. 

The pledge brings the Trump administration’s commitment to tackling the outbreak to $886 million, including $107 million from the Department of Health and Human Services in addition to State Department funding.

The assistance would help countries contain the outbreak at its source, one of the officials said, such as for building treatment facilities, providing diagnostics and medical countermeasures for health workers in the field.

Reporting by Simon Lewis; Editing by Cynthia Osterman

As part of the Kunming-Montreal Global Biodiversity Framework agreed in late 2022, nearly 200 countries signed on to the “30 by 30” goal and pledged to mobilise at least $200 billion a year to reverse decades of biodiversity loss

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Governments are set to fall well short of meeting a major UN target to protect and conserve biodiversity in at least 30% of the world’s land and seas by 2030, research published on Wednesday showed.

As part of the Kunming-Montreal Global Biodiversity Framework agreed in late 2022, nearly 200 countries signed on to the “30 by 30” goal and pledged to mobilise at least $200 billion a year to reverse decades of biodiversity loss.

But while another 1.3 million sq km of land and 6 million sq km of marine areas have come under formal protection since the agreement went into effect, total coverage is still only 20% and 10% respectively, according to research by several environmental groups led by the US-based Campaign for Nature and Together for the Ocean.

The findings are in line with an official progress report due to be submitted to the UN Convention on Biological Diversity conference in Yerevan, Armenia, next month.

A draft released in July warned that none of the 23 goals in the agreement would be reached by 2030 “unless collective implementation accelerates rapidly”.

“Progress is being made clearly, but it is uneven, and it is clearly also not at the pace and scale required to achieve the Framework’s 23 targets by 2030,” Astrid Schomaker, executive secretary of the UNCBD, said at a briefing this month.

The Wednesday report said around 26% of terrestrial and inland water areas would be protected if all existing government pledges were fulfilled by 2030, but only 12% of marine ecosystems would be covered.

The annual funding shortfall is approximately $75 billion to $150 billion, with spending on marine protection standing at just $1.8 billion, well below the $16 billion required, it said.

Even if the “30×30” targets were achieved, more efforts were needed to ensure that ecosystems were genuinely protected, it said, noting that of the 10% of the ocean currently covered by protection plans, only 3.5% was considered “effectively” protected.

“There’s a significant gap between protection on paper and protection in practice. A line on a map does not mean protection in the water,” said Pauli Merriman, senior director for oceans at WWF International.

Reporting by David Stanway; Editing by Jamie Freed

Brent crude futures rose $1.33, or 1.34%, to $100.58 a barrel by 1303 GMT while West Texas Intermediate futures gained 65 cents, or 0.72%, to $91.17

International News via Reuters:

Oil prices held near their lowest in more than two weeks on Wednesday as improving Gulf crude supplies weighed on the market, though diesel refining margins hit a record high on potential restrictions to US diesel exports.

Brent crude futures rose $1.33, or 1.34%, to $100.58 a barrel by 1303 GMT while West Texas Intermediate futures gained 65 cents, or 0.72%, to $91.17.  

The Brent benchmark hit its lowest since September 8 in the previous session at $97.36. WTI touched its lowest since September 1 earlier on Wednesday.

Meanwhile, European low-sulphur gasoil’s premium to Brent crude futures hit a record of about $95 a barrel after U.S. President Donald Trump said he backed the idea of a diesel export ban to lower prices that have hit record highs owing to a global supply shortage.

Europe has been highly dependent on diesel and jet fuel imports from the United States since the US-Israeli war on Iran has disrupted Middle East supplies. 

“Brent is being underpinned by surging gasoil prices amid renewed worries the US may introduce a diesel export ban,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Analysts and market watchers, however, have warned that such a measure would do little to ease high energy prices and could worsen supply and economic disruptions around the globe.

Oil prices have come under pressure this week on rising Gulf supplies and hopes for diplomatic talks to halt hostilities in the Middle East.  

Trump warned on Tuesday that he could “annihilate” Iran, but he also said his envoys had held productive talks with mediators of Iran to end the war.

“The only news that is worth focusing on from a lower price point is the reopening of the East-West Saudi pipeline,” Hansen added. 

Saudi Arabia resumed operations on its East-West Pipeline to the Red Sea on Tuesday, said three sources briefed on the matter.

Drone attacks, which Saudi Arabia has blamed on Iraqi militia, forced the kingdom to shut the pipeline on September 11, halting crude loadings at Yanbu port.

Saudi Arabia on Tuesday offered more barrels to Asian refiners for lifting from locations outside of the Strait of Hormuz.

Iraq, too, is increasing oil exports, its oil minister said on Tuesday. The country is exporting more than 3 million bpd, he said, and expects to boost exports via Turkey to more than 600,000 barrels per day.

Meanwhile, further supporting the improved supply outlook, a senior Iranian official told Reuters that the Strait of Hormuz could reopen within seven days if the United States eases military pressure and lifts its blockade on Iranian ports.

Adding to downward pressure on oil prices, industry data showed that US crude inventories rose by 1.8 million barrels in the week to September 18. Analysts polled by Reuters had expected a decline. [API/S]

Official weekly inventory figures from the US Energy Information Administration are due at 10:30 a.m. ET (1430 GMT).

Reporting by Anushree Mukherjee and Enes Tunagur in London, Helen Clark in Perth and Siyi Liu in SingaporeEditing by David Goodman

Global airlines have struggled with the spiralling cost of jet fuel, with airBaltic the latest to announce it was entering Chapter 11 bankruptcy proceedings

International News via Reuters:

Ryanair group CEO Michael O’Leary said on Wednesday the airline “will not levy a fuel surcharge” despite higher jet fuel prices, but predicted rivals will do so next summer and forecast more European consolidation as a result of the elevated costs.

Global airlines have struggled with the spiralling cost of jet fuel, with airBaltic the latest to announce it was entering Chapter 11 bankruptcy proceedings.

Meanwhile, Ryanair cut its forecast for passengers flown from 216 million to 214 million for fiscal 2027 as a result of planned limits to capacity in an effort to lessen the impact of its small percentage of unhedged jet fuel. 

O’Leary said Ryanair was in a strong position to weather further challenges associated with high jet fuel prices.

“Most of the airlines were well hedged into the summer of 2026, and therefore we absorb the kind of shock of the much higher oil prices this summer,” he told reporters.

“None of us will be able to absorb those much higher oil prices next year … and it will get passed on in the form of fuel surcharges on higher airfares.

“Ryanair will not levy a fuel surcharge, but the legacy guys certainly will next summer.”

O’Leary said he expected more carriers to fail, adding that Ryanair was already in talks with airports concerned that capacity will be cut by further airline bankruptcies. 

“I very much hope that jet (fuel) prices will rise faster into next year because that will accelerate the extent to which other airlines will fail,” he said, adding that he expected airfares at other carriers to rise by 10% to 20% next summer. 

“Airlines who are currently loss-making will fail. It will accelerate the consolidation of Europe into four large airlines: BA (British Airways), Lufthansa, Air France and Ryanair,” he said.

Reporting by Joanna Plucinska; writing by Sam Tobin; editing by Sarah Young and Alexander Smith

Andrea Moretti, a 22-year-old technician, died after falling several metres while installing a new lighting system inside the ancient Roman arena

International News via Reuters:

Italy’s Culture Minister Alessandro Giuli ordered the one-day closure of the Colosseum on Wednesday as a mark of respect after a worker was killed overnight in an accident.

Andrea Moretti, a 22-year-old technician, died after falling several metres while installing a new lighting system inside the ancient Roman arena.

Built 2,000 years ago, the Colosseum was the biggest amphitheatre in the Roman Empire, used to host gladiator fights, executions and animal hunts. It is Italy’s most visited tourist attraction.

“The news of the tragic death of Andrea Moretti, a skilled worker who died overnight … has deeply shocked and saddened us,” Prime Minister Giorgia Meloni said.

Culture Minister Giuli also ordered the suspension of all construction and maintenance work at the Colosseum until further notice.

Initially, only a partial closure of the monument was announced, but this drew protests from Italy’s biggest union, the CGIL.

“Humanity comes before tourists,” said Natale di Cola, the CGIL’s Rome chief, adding that the union was calling on Giuli to explain all the circumstances surrounding Moretti’s accident.

The incident comes less than a year after the death of a Romanian worker who was trapped for hours under the rubble of a partially collapsed medieval tower near the Colosseum last November.

Reporting by Anna Uras, editing by Gavin Jones