Market Insights September 14, 2026

Energy: a highly fragile equilibrium

The situation in the Middle East remains without a clear resolution. Over the weekend, Gulf countries failed to reach an agreement on transit conditions through the Strait of Hormuz. This lack of progress contrasts with a growing shared interest in restoring some degree of fluidity to energy trade flows. In addition, the Bab al-Mandeb Strait has come under Houthi control, adding further uncertainty to Saudi crude oil exports.

Against this backdrop, energy prices continue to move higher. Oil is approaching the levels observed in the spring, while natural gas outside the United States, along with several refined petroleum products, has already surpassed those highs. Energy market  fundamentals remain tight: inventories continue to decline, and refining capacity is struggling to keep pace with still-robust demand.

Despite these supportive pricing factors, market participants remain relatively cautious. Markets are well aware that negotiations between Washington and Tehran could shift rapidly at any moment. A credible agreement or meaningful diplomatic breakthrough could therefore trigger a swift easing in oil prices.

US 10-Year yields at 5%: end of the move or more to come?

The past week was once again particularly challenging for fixed-income investors. The rise in long-term yields accelerated further and is now affecting all developed markets. Even Switzerland, which had long been spared from this contagion, is beginning to experience upward pressure on 
long-term rates.

This tension is primarily being driven by the latest increase in energy prices, which has revived concerns about a resurgence in inflation. The central bank calendar is further adding to market anxiety: most major monetary institutions meet in September and must now demonstrate that their commitment to combating inflation remains unwavering. The European Central Bank led the way last week by raising its policy rate by 25 basis points and signalling that additional hikes may follow.

The US Federal Reserve will in turn be the focal point this week. In an environment characterized by rising energy prices, an additional policy tightening now appears highly likely. The bond market must therefore contend with the risk of a more restrictive monetary backdrop, even as long-term yields have already risen significantly. It is worth emphasizing, however, that this pressure remains concentrated within sovereign bond markets. Corporate bonds are showing greater resilience, supported by strong balance sheets and sustained investor demand. Credit spreads for high-quality issuers are even at multi-year lows, although this limits the scope for further spread compression.

In the United States, the yield on the 10-year Treasury note is now approaching the 5% threshold. We view this level as a major technical and psychological support point. At these yield levels, the market is likely already pricing in a significant portion of the risk associated with further monetary tightening and more persistent inflation.

Accordingly, we maintain a constructive medium-term outlook. While volatility is likely to remain elevated in the short term, we believe that higher yields are gradually creating more attractive entry points. We particularly favour high-quality bonds with maturities ranging from seven to ten years, which should be among the first beneficiaries of a stabilization and subsequent decline in long-term interest rates once inflationary pressures begin to ease.

This week's figure: -3% 

Since the recent highs reached in August, the S&P 500 Index has declined by only 3%. This pullback remains modest given the uncertainties surrounding the bond market and the geopolitical environment. The resilience of US equities continues to encourage caution in the short term.