On Wednesday, the yield on the US 30-year Treasury hit 5.73%, its highest level in 24 years. On Friday, Canada announced the loss of 68,300 jobs, sending the loonie lower within minutes. In between, the Fed confirmed it was not done raising rates. Here is a look back at a week in which bonds set the pace for every market.
In brief
- Rates: on Wednesday, the US 30-year yield hit 5.73%, its highest level in 24 years, before falling back to 5.66%.
- Fed: according to the minutes published on October 7, most officials see another hike by year-end as likely, following September’s move to 3.75–4%.
- Canada: 68,300 jobs were lost in September, against expectations for 6,100 new jobs. USD/CAD rose from around 1.4232 to nearly 1.4293.
Long-term yields set the tone
The week’s standout figure came from the bond market. On Wednesday, the US 30-year yield climbed to 5.73%, its highest level in 24 years, before falling back to 5.66%, reports investingLive. Two developments helped calm the market: a well-absorbed 10-year auction, followed by reports that France was considering issuing more short-term debt.
That French detail matters. When a government shifts toward shorter maturities, it means borrowing over ten or thirty years has become too expensive. The market saw this as a reprieve, not a solution.
On Friday, the US yield curve flattened: short-term yields rose while the 30-year yield edged lower. Translation: the market is betting on a tougher Fed in the coming months, without becoming more alarmed about long-term inflation. The dollar therefore remains supported by the short end of the curve, which tracks expectations for policy rates.
The Fed embraces its hawkish bias
The minutes of the September 15–16 meeting, published on Wednesday, remove any doubt. The quarter-point hike to 3.75–4% was approved unanimously, 12 votes to 0. And most participants judged that another tightening move would probably be appropriate before year-end.
The diagnosis is blunt. Inflation is no longer falling, driven by oil and a surge in AI investment. Fed staff estimated it at 3.8% in August (PCE index), and at 3.4% excluding energy and food. They do not expect a return to 2% before 2029. Unemployment, at 4.1%, is considered close to full employment.
The key point: oil has become a monetary-policy variable. As investingLive’s analysis points out, another supply shock in the Gulf would no longer be ignored: it would strengthen the hawkish camp. The next meeting is scheduled for October 27 and 28. Small consolation for the euro: the ECB is also raising rates, narrowing the gap with Washington.
The loonie dives while the euro remains weighed down
At 2:30 p.m. on Friday, Statistics Canada released a disastrous figure. The country lost 68,300 jobs in September, while the consensus expected 6,100 new jobs. The previous month had already shown a decline. The unemployment rate, in line with expectations, rose from 6.4% to 6.5%. Our guide to the impact of Canadian employment data measures price reactions to each release.
USD/CAD rose from around 1.4232 just before the figure to nearly 1.4293 immediately afterward, according to investingLive’s session report. The loonie then recovered some ground, without truly rebounding. Over the session, the dollar gained around 0.25% against the Canadian dollar and the yen, but fell against the Australian dollar.
On one side, two consecutive months of job losses. On the other, a Fed that still wants to raise rates. The policy gap between Ottawa and Washington is now driving the pair.
The euro, meanwhile, remained on the defensive throughout the week. On Friday, EUR/USD traded near 1.1230, caught between two large option expiries at 1.1200 and 1.1250, according to investingLive. Concerned about French debt, some investors reduced their positions.
Wall Street questions AI, then recovers
On Thursday, tech stocks stumbled as investors grew concerned about artificial-intelligence revenues, with semiconductor stocks taking the first hit. On Friday, buyers returned. All five major US indexes finished higher, led by the Dow Jones. The Nasdaq posted a fourth consecutive weekly gain.
Europe held up less well. Its indexes rose on Friday, but most finished the week in negative territory. Tension around sovereign debt, particularly France’s, is weighing more heavily on this side of the Atlantic.
Thursday’s session is instructive. An intact weekly trend does not prevent a one-day washout. If you trade the Nasdaq intraday with a tight stop, that air pocket is enough to knock you out before the rebound.
Gold, oil and bitcoin: three signals
Gold rose on Friday, as did silver, while the dollar held firm. Seeing gold and the greenback rise together remains unusual: the market is seeking protection rather than betting on growth.
When the dollar and gold rise together, the market is not buying growth. It is buying insurance.
Oil fell on Friday amid uncertainty surrounding Iran. The G7 announced that it would release 100 million barrels from its reserves onto the market. JPMorgan doubts the move’s impact: mostly old barrels in new packaging, according to the bank. For currency traders, the issue goes beyond crude: every surge now brings the Fed closer to another hike.
Bitcoin ended the week higher, alongside equities and precious metals. Sellers had their chance and failed to take it, investingLive summed up.
The week’s figures
| Date | Release | Actual | Forecast | Previous |
|---|---|---|---|---|
| Oct. 8 | Unemployment claims (United States) | 197K | 200K | 197K |
| Oct. 9 | Employment change (Canada) | −68.3K | 6.1K | — |
| Oct. 9 | Unemployment rate (Canada) | 6.5% | 6.5% | 6.4% |
| Oct. 9 | Michigan consumer sentiment (preliminary) | 46.3 | 47.5 | 47.8 |
| Oct. 9 | Michigan inflation expectations (preliminary) | 4.7% | — | 4.6% |
The most troubling signal is hidden in the final line. US households are deeply pessimistic, yet expect more inflation, at 4.7%. That is exactly the combination the Fed fears. Our measurements of the impact of Michigan inflation expectations show how the market processes this figure.
Next week: inflation will decide
The US calendar is packed: the consumer price index, retail sales and the first earnings reports from major banks. On Monday, some North American markets will be closed, so expect reduced liquidity at the start of the week.
Two scenarios are emerging:
- Inflation higher than expected: this would validate the tone of the minutes. Short-term yields and the dollar could benefit, at the expense of gold and tech stocks.
- Inflation in line or lower: the market could reduce the probability of a year-end hike. The dollar would then lose some of its support, and pressure on long-term yields could ease.
In either case, the first minute could resemble Friday’s move in USD/CAD: wider spreads, a spike and a partial retracement. Your usual stop is not designed for that. Adjust position size, not risk.
You can run this same analysis on your own history. Edgyx automatically sorts your trades according to whether they fall within a release window, and its economic calendar displays the measured impact of each figure.
Key takeaways
- The US 30-year yield hit 5.73%, its highest level in 24 years: long-term yields remain the barometer for every market.
- The Fed approved its September hike unanimously, 12 votes to 0, and most officials are considering another increase by year-end. The next meeting is scheduled for October 27 and 28.
- Oil now has a direct impact on US monetary policy.
- Canada lost 68,300 jobs in September: the loonie remains at the mercy of the monetary-policy gap with the United States.
- Next week’s US inflation data will decide between the scenarios. Adjust your position size before the release, not afterward.
