The bond rout goes global, Tokyo reopens at a thirty-year high, and Australian unemployment rises into a hike that is now 96% priced

Asia — the reopen that set the tone for the whole session

For once the Asian session led rather than followed. Tokyo reopened after three consecutive holidays (21–23 September) into a US front end that had moved 19bp in its absence, and the JGB market did the catching up in a single session: the 10-year jumped to 3.073% from the 2.984–2.99% print of 18 September, its highest since 1996, with the 30-year up roughly 9bp to 4.168%. Three independent outlets called it a thirty-year high and the move was explicitly framed as following the US Treasury selloff rather than as a domestic event. The BoJ's 1.25% policy rate took effect on the day — the highest in 31 years — off an 18 September decision carried 7–2 with no explicit hawkish forward guidance, which is why the yen did not benefit: USD/JPY finished at 157.90, weaker on the session.

Equities took it better than bonds. The Nikkei 225 reopened up roughly 1% and held 65,000 comfortably — the one question posed by three days of closure — though two vendors disagree by about 180 points on where it finished (65,647 on an arithmetic-checked +628pt basis, 65,828.43 on another), so a range is published. SoftBank rose 6.24% on its bond deal and Kioxia 3.76%. Hong Kong fell 0.30% to 24,761, a second consecutive decline, on the Treasury selloff and a firmer dollar; the mainland was worse in its last session before the holiday, with the CSI 300 −1.73% to 4,439.14 and the Shanghai Composite −1.22% to 3,888.37, both arithmetic-checking against verified priors. Taiwan snapped its record run, the TAIEX easing 0.28% to 48,024.60 on NT$736.6bn turnover before its own two-day closure. Korea was shut. India was the region's worst by a distance — Sensex −1.67% and Nifty −1.64%, both tying exactly — as the domestic 10-year rose 6bp to 7.09% in sympathy and Reliance fell to a 17-month low.

Australia — a jobs print that loosened the labour market and tightened the pricing

The ABS reported August employment +39,500 to 14,836,600 against roughly +20k consensus, but the composition undercuts the headline: full-time employment fell 6,300 while part-time rose 45,800, and with participation up 0.2pp to 67.1% the unemployment rate rose to 4.6% from 4.5%, above consensus and a post-pandemic high. Hours worked rose 13.7m to 2,009m. The market took the jobs number rather than the rate: pricing for a 25bp hike to 4.60% on Tuesday moved from roughly 88–90% to 96.5%. Several bank economists now flag a follow-on November move toward 4.85%.

The ASX 200 fell 0.72% to 8,702.00, down 63 points, triple-corroborated. Breadth was poor — 376 advancers against 695 decliners — and the A-VIX rose 6.6% to 11.73 from a very low base. Energy was the lone sector gainer (roughly +1.0%) on crude; Materials fell 1.96% with BHP −1.6% on copper weakness and a fatality-related suspension at Escondida, and financials touched a fresh three-month low. Soul Patts rose 6.6% to a record $48.55 and Premier Investments 8.6% to $12.12; Zip fell 6.0%. The ACGB curve sold across the board, the 10-year up about 15bp to 5.39–5.40% — though that move is contaminated by the global rout and cannot be read as a clean labour-market response.

Europe — three decisions, a German beat, and a coin flip that landed hawkish

Norges Bank hiked 25bp to 4.50% with a Monetary Policy Report, resolving the week's genuinely two-sided decision in favour of the hawks; Governor Bache said the Committee is "prepared to raise the policy rate further if needed" and that it "will likely be necessary to keep the policy rate elevated for a time". The rate path detail could not be retrieved. The SNB held at 0.00% for a fifth consecutive meeting but raised its conditional inflation forecast across the entire horizon — 2026 to 0.7% from 0.6%, 2027 to 0.8% from 0.6%, 2028 to 0.8% from 0.7% — with Schlegel attributing the revision to energy, and reverted to standard FX language ("willing to be active in the foreign exchange market as necessary"), a softening from June's safe-haven-specific wording. The Riksbank held at 1.75% and flagged that growth and inflation had both run above its June forecast, which wires read as raising the odds of a fourth-quarter hike.

German Ifo beat at 89.9 against 89.0 consensus and 88.8 prior, extending Wednesday's PMI surprise and keeping the October ECB question live. ECB speakers leaned the same way: Sleijpen called the economy "considerably more resilient than expected", Schnabel said the energy shock is "much more persistent" than expected, and Radev argued vigilance should outweigh patience; Kocher was the dove, preferring to reach 2% without further hikes. October pricing has repriced materially from the 39% this desk had been carrying — two routes dated 23 September now show 48% and 51.6% for a move — though a third, poorly dated, reference of roughly 29% means the honest statement is a contested range rather than a point.

European equities were mixed and thin. The CAC 40 fell 0.29% to 8,100.10 and the IBEX 0.30% to 19,573.40, both tying exactly to verified priors; the SMI eased 0.11% to 13,905.82, the FTSE MIB roughly −0.7% to ≈51,629, and the DAX fell 0.61% to 25,266.53, the region's worst, held down by the oil price despite the Ifo beat. The FTSE 100 was the exception, up 0.21% to 10,728.00. The Stoxx 600 could not be obtained at all — see §13.

The US session — a bond market at 2007 highs and an equity market that shrugged

This is the divergence of the day. Treasury yields extended Wednesday's break: vendor levels put the 10-year around 5.19%, described as the highest since July 2007 and reported intraday as having "topped 5.15% before retreating", with the 2-year near 4.92% and the 30-year near 5.48%. Treasury's own 24 September row had not posted at filing, so the Thursday curve is a vendor read and its internal inconsistencies are disclosed in §13. Against that, US equities finished flat: the S&P 500 near 7,702.8 (−0.04%) derived from a settled SPY close, the Nasdaq Composite at 26,939.37 (+0.01%) — a genuine settled cash print, the first obtained for this index in three editions — and the Russell 2000 near 2,835.1 (−0.10%) from a settled IWM. The Dow and Nasdaq 100 could only be captured at 15:55 and 15:59 ET, before the bell, and are labelled as unsettled throughout.

Initial jobless claims for the week ended 19 September came in at 197k against roughly 201k expected, with continuing claims at 1.719m and the four-week average 202,250 — a labour market giving the Fed no reason to pause. The single-source status of that figure is flagged. Fed pricing did not move: the rate monitor, stamped "Sep 24, 2026 02:55PM EDT" and therefore a pre-close read rather than the settled state, held the 28 October hike at 71.2%, identical to Wednesday's post-close read, with December's modal outcome two hikes at 54.9%. Polymarket closed most of the gap that was flagged as a risk yesterday, moving from 54% to 68% against the monitor's 71.2% — a roughly three-point spread where there had been seventeen.

Xi Jinping was received at the White House for a state dinner, Trump greeting him personally at Joint Base Andrews. Treasury Secretary Bessent said the trade truce has been extended by two months, moving the expiry from 10 November to roughly 10 January 2027. Rare earths were flagged by the EU as an unresolved concern despite the extension. Full readouts on Taiwan, AI and fentanyl-linked tariffs were behind blocked sources and are not asserted here.

The RBA is the only decision that matters to this book next week, and the interesting question is not Tuesday's number. At 96.5% the hike is done. What is undecided is whether the statement frames 4.60% as the terminal rate or as a waypoint, and the case for the former is stronger than the pricing implies: unemployment at 4.6% is inside the 4.5–5% band Bullock herself named on Monday as "probably enough", fixed mortgage rates have already moved up to 0.48pp without the Bank doing anything, and house prices have fallen five months running. The case for the latter is that full-time employment is the only soft component and the participation rate is doing the work on the unemployment rate — a labour market absorbing more people is not a weak one.

The three European decisions all landed on the hawkish side of expectations and the market barely reacted to any of them, which is itself the observation. A Norges hike that was a genuine coin flip, an SNB that raised its inflation profile across three years, and a Riksbank signalling a Q4 move would, in a calmer month, have been the week's story. They were crowded out by a Japanese bond market repricing thirty years of history in a session.

The August labour force was a beat on the headline and a loosening underneath, and the market traded the headline. Employment rose +39,500 to 14,836,600 against roughly +20k consensus, but the composition was weak: full-time employment fell 6,300 while part-time rose 45,800, so every net job and then some was part-time. With the participation rate up 0.2pp to 67.1%, the unemployment rate rose to 4.6% from 4.5% — above consensus and a post-pandemic high — while underemployment fell to 6.2% and hours worked rose 13.7m to 2,009m. A labour market that is absorbing more participants and still generating jobs is not a weak one; a labour market shedding full-time positions is not a tight one. Both readings are defensible, which is why the composition matters more than the headline for what the RBA says on Tuesday rather than what it does. Pricing for a 25bp hike to 4.60% moved from roughly 88–90% to 96.5%, and several bank economists now carry a follow-on November move toward 4.85%.

The transmission is already ahead of the Bank. Within hours of Bullock's CEDA remarks on Monday — where she said unemployment "between 4.5 and 5" would "probably take enough heat out of the labour market" — CBA raised its two-year fixed rate 0.48pp to 6.82%, with other majors up 0.15–0.30pp; the cheapest fixed rates (~6.49%) now sit above the variable range (5.99–6.25%), which is a lender-side statement about where the cash rate is going. Housing continues to cool: the national home value index was −0.5% on the week and −1.1% on the month, with Sydney −1.2% monthly and −6.1% annually and Melbourne −0.8% and −5.8%; Brisbane is the outlier at −1.3% monthly but +8.5% annually. The most recent auction weekend recomputed from its own city rows to a 54.0% combined clearance — and on this occasion the vendor's headline figure did tie to its rows, which is not always true.

The bond market sold, but not for Australian reasons. The 10-year rose roughly 15bp to 5.39–5.40% and the 2-year about 13bp to 5.08% — a move that landed on the same session as the JGB reopen, the Canadian selloff and a US 10-year at 2007 highs. Attributing it to the labour force print would be wrong; the honest statement is that the global rout is in it and the domestic component cannot be isolated. The 2-year at roughly 5.08% embeds about 73bp over a 4.35% cash rate, which is more than Tuesday alone. The 3-year remains a three-way vendor conflict for a second consecutive edition — 5.09%, 5.04% (dated 23 September) and 5.027% — leaving 3s10s markable only as a range of about 30–36bp against V004's 43bp entry. The view is in the money on every leg and cannot be marked to a point, which is now a standing item rather than a one-off.

Equities took the rates move badly and breadth was worse than the index. The ASX 200 fell 0.72% to 8,702.00, down 63 points, on 376 advancers against 695 decliners — a far weaker internal picture than Wednesday's marginal gain suggested, and the A-VIX rose 6.6% to 11.73 off a very low base. Energy was the only sector to rise (roughly +1.0%) on crude; Materials fell 1.96%, with BHP down 1.6% on copper weakness and a fatality-related suspension at Escondida, and financials marked a fresh three-month low. Soul Patts rose 6.6% to a record $48.55, Premier Investments 8.6% to $12.12 and Tuas 8.1%; Zip fell 6.0% to $2.11. The SPI remains unquotable for a tenth consecutive edition after the December contract roll, and turnover was not obtained. The AUD was the week's worst G10 performer, closing at 0.7014 and down 1.47% on the week against a verified 0.7119 on 18 September.

New Zealand could not be closed. Only an intraday read roughly 0.5% lower at 15:00 was obtainable, with the source stating explicitly that it would change at the 16:45 close — so no NZX 50 level is published, and a gap that was closed for the first time yesterday has reopened. Gentrack, Vista and Briscoe were the named decliners; Hallenstein Glassons and Sanford led gainers. No RBNZ commentary or New Zealand data surfaced. The kiwi fell 0.58% to 0.5689, which on recomputed legs leaves AUD/NZD at roughly 1.2329 — see §08 for the material restatement of that mark.

Yesterday's close is confirmed by the primary, one view is retired on terms named in advance, one mark is materially restated after a data correction, and no view opens. The book goes from seven to six.

No view opened, and the reason is the standing diagnosis rather than a lack of candidates. The obvious one was the global term-premium theme — long Japanese or Australian steepeners against Bunds, which did not sell. It was passed up because the instrument fails the ledger's own test: a cross-market curve trade can be dominated by a policy repricing in either leg, which is precisely the mechanism that killed V003 three weeks after it was opened for the same class of reason. Before opening, the desk now asks whether the instrument can only pay if the named mechanism is what moves it. A JGB steepener cannot clear that bar in a week when the BoJ's own guidance is the swing factor. That is the third time this month a candidate has been named and declined on evidence rather than taken on enthusiasm.

Weekly scorecard — week ending Friday 25 September

Six open, twenty-one closed: 3 right, 12 wrong, 6 scratch — 3 of 15 decided views correct. This week five views closed and none of them was right: V022 (copper, scratch) and V010 (USD/JPY short, wrong) on Monday, V003 (5s30s steepener, wrong) and V027 (Europe versus US, wrong) on Thursday, and V016 (iron ore, scratch) today. Every one of the five closed on language written in a prior edition, which now makes seven consecutive closes fired on pre-committed conditions. That discipline is the only thing in this ledger performing well, and it is worth being precise about why it matters: on Thursday it produced a close on a vendor mark that the primary then confirmed to within two basis points, and today it produced a retirement decision that was flagged before the evidence arrived.

What the week got right. The Brent two-cluster call — publishing the higher cluster on the strength of oil prices quoted incidentally inside European equity wraps in two languages — was confirmed exactly by the dated series, which settles Wednesday at $103.08 inside the range published. The decision to close V003 on a vendor mark rather than wait for the primary was vindicated at 41bp. The refusal to open a Murban view that failed its named corroboration test now looks straightforwardly correct. And the range published for the Nasdaq Composite contained the settled figure.

What the week got wrong, and it is worse than a bad call. This desk published an AUD/USD range on Wednesday that was 65 to 90 pips too high, flagged it as a three-way conflict it could not resolve, and then used that leg to mark a live house view — reporting V023 at +1.05% to +1.67% when the honest figure was roughly zero. The three-way conflict was real, but the tie-breaker was available and was not applied: a dollar index up on a 19bp front-end move is incompatible with a flat Australian dollar, and the desk's own §04 had flagged the DXY anomaly twice without connecting the two. The rule that follows is specific: no FX level enters a house-view mark until it has been reconciled against the dollar's own move that session. That is now a standing convention, and it is the second FX marking convention added in a week, which says something about where this process is weakest.

Portfolio-level read. Six views, no US duration expression, and the two largest remaining positions — V006 and V004 — are both Australian and both resolve on the same event at 14:30 on Tuesday. That is more single-event concentration than this book should carry and it is worth naming rather than discovering. The hike itself is not the risk; the statement is. Elsewhere the structure is sound: a fiscal-consequence trade in Europe with a catalyst roughly a week out (V025), optionality rather than delta in oil (V024), and a credit underweight now held at low conviction into evidence running against it (V017). On hedging, the SKEW reading is a third different number for the same observation date — 146.2 at the 67th percentile of the year now, against 144.8 and 142.2 previously — so protection should be priced rather than assumed, and the equity put/call at 0.47 in the 13th percentile says few people are bothering.