6 min read What moved last week
Stocks ended the week higher even as bonds sold off. The S&P 500 closed Friday at 7,743.41, with AI and chip names leading. The 10-year Treasury yield touched 5.225%, its highest since 2007, after strong PMI data, a weak five-year auction and Fed officials signalling another hike. The Fed already lifted rates to 3.75%-4.00% on September 16.
On the hourly chart, the S&P 500 broke out of the descending channel we tracked for two weeks and retested it from above near 7,700. If the retest holds, the next reference is the all-time high at 7,816.70, less than 1% away. A return below 7,700 would invalidate the breakout and open the path toward 7,450-7,550.
US 10-year yield at a 19-year high
The 10-year yield peaked at 5.228%, a level last seen in 2007, on the eve of the global financial crisis. It is the benchmark for mortgages, corporate credit and equity valuations. A sustained break above 5.228% would tighten financial conditions further without any action from the Fed.
The yield broke out of a falling wedge on September 23 and left an imbalance between 4.975% and 5.10%. A pullback toward 5.089% and 5.041% would read as a healthy correction and ease pressure on risk assets. A push through 5.228% would signal the repricing is not finished, with higher risk-free returns competing directly with equities.
Oil gives back its war premium
WTI settled at $92.41 on Friday after the US and Iran resumed direct talks, their first since June, on a phased deal to reopen the Strait of Hormuz. Brent held above $104 on Houthi attacks on Saudi infrastructure.
WTI crude reached the 88.72 support we flagged a week earlier, bounced into 95.46-96.78 and turned lower. Price trades near 92.45, and the structure stays bearish below the 98.26 break of structure and the gap above it. A 4-hour close below 88.72 would remove the last support visible since early September.
RBA cash rate and CPI (Tuesday and Wednesday)
The RBA decides on Tuesday at 04:30 GMT. Most economists expect a 25 bp hike from 4.35% to 4.60%, the highest since 2011, after the July trimmed mean held at 3.6%, above the 2-3% target. August CPI follows Wednesday at 01:30 GMT. With a hike largely priced, a hold would be the bigger surprise for the Australian dollar.
AUD/USD fell from above 0.7230 to 0.7004 despite the hawkish repricing, a sign that dollar strength dominates. The drop left an imbalance between 0.7045 and 0.7100, and a retest is the logical next step. If lower timeframes turn down from there, continuation opens the path toward 0.7000 and 0.6984.
US final GDP and PCE (Wednesday)
Wednesday at 12:30 GMT brings the third estimate of Q2 GDP, previously 1.5% annualized, together with August PCE. July core PCE ran at 3.3% year over year. PCE is the market-moving number: Warsh called inflation “too high” in September, and a hot print would harden the case for another hike.
Gold is completing a head and shoulders top, with the right shoulder at 4,510.90 and price at 4,284 just above the 4,223-4,240 neckline zone. A move below 4,240 would confirm the breakdown and open the path toward 4,200 and then 4,100. A recovery above 4,442.94 would weaken the pattern.
Swiss CPI (Thursday)
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Swiss CPI is due Thursday at 06:30 GMT. August rose 0.4% on the month and 0.8% on the year, the fastest annual pace since August 2024, driven by petrol and a weaker franc. Consensus for September is 0.0% m/m. The SNB held at 0% on September 24, so the print matters more for the franc than for policy.
USD/CHF broke its one-year high at 0.82156, retested it and pushed to 0.8300. A 4-hour close above 0.8300 would confirm the next leg higher. Failure there leaves room for a pullback toward 0.82632 and another retest of 0.82156.
US nonfarm payrolls (Friday)
September payrolls land Friday at 12:30 GMT. August added 162,000 jobs with unemployment at 4.1%. Consensus sits around 90,000-100,000. A strong print on top of hot PCE would strengthen hike expectations and push yields back toward their highs; a miss would ease that pressure.
EUR/USD trades at 1.1390 after breaking below its rising channel in mid-September. Supports sit at 1.13532 and the six-month low at 1.13251, and a renewed climb in yields raises the odds of a break. Resistance stands at 1.14342 and 1.14542.
Bottom line
The week turns on how far yields can rise before risk assets react. The S&P 500 sits within 1% of its record while the 10-year holds near a 19-year high. A pullback in yields toward 5.04-5.09% would support the equity breakout and give gold and EUR/USD room to stabilize. A break above 5.228% would pressure all three and extend the dollar’s run.
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