Daily Market Outlook, October 1, 2026

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Missive - Tech Lifts The Tape, Rates Keep The Reins

US equity futures pushed higher on Thursday morning as Micron’s stellar outlook reignited appetite for artificial intelligence, offering a temporary counterweight to multi-decade high Treasury yields and a relentless US Dollar. Nasdaq 100 futures surged 1.0% while S&P 500 contracts added 0.6%, stabilizing risk sentiment following a late-session selloff on Wall Street. The broader setup remains a tug-of-war: visible megacap tech growth is providing an earnings floor, but a restrictive rates environment continues to cap broader market expansion.

Asia-Pacific equity benchmarks rallied sharply on the back of tech leadership. Japan’s Nikkei 225 jumped 2.9% and South Korea’s Kospi gained 1.3%, driven by a sharp squeeze in semiconductor names after Micron’s upbeat revenue guidance. Alphabet also provided impulse following the rollout of its Gemini 4 Argon model. Micron’s report confirms that hardware capex across compute, data centers, and cloud infrastructure remains robust. Yet this very same capital spending boom—and its massive energy and financing demands—is precisely why long-end sovereign yields remain structurally elevated.

Fixed income markets steadied, though benchmark yields remain near multi-decade peaks. The US 10-year yield hovered near 5.28%—after touching levels last seen in 2002—while the 30-year yield consolidated near 5.62%. Sovereign bond pressure remained global: Japan’s 30-year yield climbed 5 bps to 4.20%, accompanied by steepening across Australian and New Zealand curves. Bear-steepening trends reflect a potent mix of sticky inflation risks, heavy Treasury issuance, and mounting fiscal deficit concerns across major developed markets.

Energy markets offered brief respite to inflation breakevens. WTI crude fell 1.4% to $89.20/bbl while Brent slipped below $97/bbl, easing immediate cost pressures for central bankers. Spot Gold edged toward $4,175/oz and Silver gained 1.2% on dip-buying, though precious metals face ongoing headwinds from elevated real yields. In FX, the US Dollar maintained its dominance, supported by relative growth resilience and widening rate differentials.

Macro data presented a nuanced backdrop for the Federal Reserve. The September PCE report delivered encouraging inflation news: benchmark revisions trimmed monthly core PCE across nine of the past eleven months, bringing headline PCE down to 3.42% y/y and core PCE to 3.01% y/y. However, economic activity data printed significantly hotter, with US Q2 GDP upgraded to 2.2% annualized and tracking estimates for Q3 hovering near 4%. While softer historical inflation metrics reduce the urgency for immediate Fed rate hikes, booming demand and tight capacity eliminate the rationale for near-term rate cuts.

Macro to Micro: Markets are operating on two distinct tracks—micro tech earnings momentum versus macro yield drag. While softer historical PCE revisions and lower oil prices give equities room to breathe, 10-year yields anchored near 5.28% leave zero margin for macroeconomic error. All eyes shift to Friday’s Non-Farm Payrolls report: a cooling labor print could validate today's tech-led relief bounce, whereas sticky wage growth risks putting bond vigilantes firmly back in charge.


Overnight Headlines

  • BoJ Debated More Hikes And Scope For Faster Move At Sept Meeting

  • BoJ Tankan Shows Sixth Straight Rise In Manufacturer Sentiment

  • Yen Weakens As BoJ Summary Damps Bets For Back-To-Back Rate Hike

  • Australia’s Trade Balance Shows A Surplus In August

  • RBA Downplays Risks From Bathla Collapse To Financial Stability

  • Fed’s Kashkari Says Inflation Is ‘Still Too High’ Even After Softer PCE Data

  • Iran Says It Received US Response To Latest Proposal

  • Trump Downplays Diesel Export Ban Over Impact On Other Fuels

  • EU Emergency Diesel Stocks Are Mainly In Germany And France

  • UK Government Borrowing Costs Hit New High After Oil Prices Rise

  • AI Debt Surge Raises Risk Of Sharp Market Correction, BoE Warns

  • Micron Forecast Tops Estimates After Demand Outstrips Supply

  • FTC Opens Probe Into AI Giants Including Anthropic And OpenAI

  • South Korea To Build Eight Nuclear Power Plants In US And Invest $120B

  • China’s Tencent Leases 100,000 Chips From Oracle To Accelerate AI Push

  • China Will Find A Way To Manage Crypto, Solana Co.’s CEO Says

  • China Eyes More Targeted Fiscal Support After Growth Slowdown

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

  • EUR/USD: 1.1425 (EU1.95b), 1.1375 (EU1.78b), 1.1400 (EU1.03b) USD/JPY: 158.25 ($1.57b), 154.00 ($1.48b), 161.00 ($1.38b) 

  • USD/BRL: 5.1500 ($579.4m), 5.1000 ($396.1m), 4.9500 ($396m) 

  • AUD/USD: 0.7050 (AUD946.3m), 0.7110 (AUD519.2m), 0.6940 (AUD475.7m) 

  • GBP/USD: 1.3200 (GBP841m), 1.3250 (GBP710.6m), 1.3485 (GBP600m) 

  • USD/CAD: 1.4150 ($624.8m), 1.3765 ($440m), 1.3925 ($421.5m) USD/MXN: 17.90 ($446.1m), 17.30 ($314.5m) 

  • EUR/GBP: 0.8500 (EU400m)

CFTC Positions as of 25/9/26

  • In a recent market update, equity fund speculators have ramped up their S&P 500 CME net short position, adding a hefty 66,665 contracts to reach a total of 355,121. Meanwhile, equity fund managers have also been active, boosting their S&P 500 CME net long position by 35,280 contracts, bringing their total to an impressive 934,913.

  • On the Treasury front, speculators have made some adjustments as well. They've reduced their net short position in CBOT US 5-year Treasury futures by 116,513 contracts, now standing at 880,853. Similarly, they've trimmed their CBOT US 10-year Treasury futures net short position by 9,484 contracts, which now totals 811,752. However, there's been an increase in the CBOT US 2-year Treasury futures net short position, which has risen by 51,712 contracts to reach 907,065.

  • In other adjustments, speculators have cut their CBOT US UltraBond Treasury futures net short position by 8,478 contracts, bringing it down to 336,725. They've also reduced the net short position in CBOT US Treasury bonds futures by 47,352 contracts, now totaling 155,805.

  • Shifting gears to cryptocurrency, the Bitcoin market shows a net long position of 2,756 contracts. Meanwhile, several currencies are experiencing net short positions: the Swiss franc sits at -26,752 contracts, the British pound at -82,568 contracts, and the euro at -52,334 contracts. On a brighter note for the Japanese yen, it boasts a net long position of 71,982 contracts..

Technical & Trade Views