Weekend global briefing: Sunday 18 October
Weekend edition · what's new since Saturday, plus the week ahead · Data cutoff 18 Oct, 07:30 AEDT/AEST
If you read nothing else
- Over the week the ASX 200 rose 1.0% while the S&P 500 fell 1.9% and the Nasdaq 4.5%, as investors sold AI stocks and bought bonds; the US 10-year yield fell 15 bp.
- New on Saturday: Iran’s Revolutionary Guards said a supertanker hit a mine in the Strait of Hormuz; the US said the mines are cleared and ships are being hit by Iranian projectiles.
- Next: China’s September-quarter GDP on Monday, BHP’s quarterly update on Tuesday, and speeches by the RBA’s Kent and Hauser before the November decision.
Markets at a glance
Each figure shows its own session. Changes are versus the prior session, and the week. Yields in basis points.
S&P/ASX 200
8,806.7
+1.0% +1.0% wk
Fri 16 Oct close · Yahoo Finance
delayed, unofficial
S&P 500
7,659.4
−1.1% −1.9% wk
Fri 16 Oct close · Yahoo Finance
delayed, unofficial
AUD/USD
0.6947
−0.12% −0.5% wk
Fri 16 Oct spot · RBA F11.1
Australia 10Y
5.31%
+3 bp −9 bp wk
Wed 14 Oct close · RBA F2 capital market yields
lagged source
Brent (spot)
US$126.55
+0.6% +0.4% wk
Wed 14 Oct spot · FRED DCOILBRENTEU
lagged source
VIX
19.99
+3.53 pts +5.15 pts wk
Fri 16 Oct close · Yahoo Finance
delayed, unofficial
All 16 metrics
What Moved & Why
Investors weighed an AI-stock sell-off against rising oil Money moved from debt-funded AI stocks into bonds while oil climbed towards US$110. Week: S&P 500 −1.9% · Nasdaq −4.5% · US 10Y −15 bp
What happened
Over the week, investors sold debt-funded AI stocks and bought bonds, while oil climbed back towards US$110 as attacks in the Gulf spread (AMP).
Why it matters
The balance between growth worries and inflation worries drives bond yields, which affect equity valuations and the RBA outlook.
Competing views
- My Bui, AMP: The bond rally shows investors now fear an AI bust more than inflation. AMP
- Chris Watling, Longview Economics: Expects a "big, chunky sell-off" of 10–20% in US shares as tighter liquidity hits credit; a mid-cycle correction, not a recession. CNBC
- AMP: Flags CoreWeave's bonds at distressed levels and contagion risk through credit, but still favours shares over 12 months: the AI spending boom can run two to three more years and investment-grade credit is calm. AMP
Sources
Australia & ASX
No new verified items in this edition.
Rates & Expectations
Fed: what markets price
Market pricing unavailable
US and Australian yields fell over the week US 10-year yields fell despite hot inflation; Australian yields fell after the September jobs data. US 10Y 5.09%, −15 bp wk · AU 10Y 5.31%, −9 bp wk to 14 Oct
What happened
US 10-year yields fell despite hot inflation, as investors moved out of AI stocks and Fed officials signalled no rush to act (WSJ). Australian yields fell further after September’s unexpected fall in employment (Westpac).
Why it matters
Lower yields reduce borrowing costs and tend to support rate-sensitive stocks.
Market reaction
Dashboard: US 10Y −15 bp over the week to 16 Oct (US Treasury); AU 10Y −9 bp over the week to 14 Oct (RBA, published with a lag).
Sources
Global Macro & Risk
Iran and the US gave different accounts of a tanker fire Iran's Revolutionary Guards said a supertanker hit a mine; the US said the mines are cleared.
New since last issue: The tanker incident happened on Saturday 17 October, after the previous edition.
What happened
Iran’s Revolutionary Guards said a supertanker carrying more than 2 million barrels hit a mine and caught fire on Saturday. The US said the mines have been cleared and that ships are being hit by Iranian projectiles (Euronews, Al Jazeera).
Why it matters
Either account points to continued risk to tankers in the strait. That supports ASX energy stocks but keeps inflation and airfares high.
Competing views
- Iran's Revolutionary Guards (official claim): The supertanker struck a mine. Euronews
- US government (official claim): Mines in the strait have been cleared; ships are being hit by Iranian projectiles. Al Jazeera
Sources
- Euronews reporting
- Al Jazeera reporting
Estimates of oil flows through Hormuz differ Kpler estimates about two-thirds of pre-war flows; US Central Command cites 100 million barrels last week.
What happened
Kpler estimates flows at about two-thirds of pre-war levels. US Central Command said 100 million barrels passed last week. The UK maritime monitor said most attacked ships no longer report, so the true count is likely higher (Al Jazeera, CBS).
Why it matters
Flow volumes determine how much Gulf oil reaches the market, which matters for Brent and inflation.
Source: Kpler via Al Jazeera; BBC Verify
Different figures: Oil flows through the Strait of Hormuz
| Source | Figure | What it measures | When | Method | Status |
|---|---|---|---|---|---|
| Kpler (via Al Jazeera) | ~2/3 of pre-war (~11m b/d) | Daily oil flows vs the pre-war 17m b/d | Reported 17 Oct | Vessel tracking estimate | estimate |
| US Central Command (via Al Jazeera) | 100m barrels | Oil passed through the strait last week | Week to ~17 Oct | Official statement | official claim |
| UK maritime monitor (via CBS) | Undercount likely | Coverage of tracking data | Reported 17 Oct | Statement on reporting gaps | official claim |
Unresolved: The figures measure different things: Kpler's is a share of pre-war daily flows from vessel tracking; CENTCOM's is a weekly total stated by a party to the conflict; UKMTO notes that ships which stop transmitting are missed by tracking. 100 million barrels in 7 days would average about 14m b/d (our arithmetic), above Kpler's estimate. The gap is not resolved.
Sources
- Al Jazeera reporting
- CBS reporting
Iran said it sent the US a seven-day plan to reopen Hormuz The plan was passed via Qatar; no breakthrough is expected soon.
What happened
Iran said it sent Washington, via Qatar, a seven-day plan to reopen the strait if its conditions are met: “The choice is now America’s” (Iran International). US media reported that Trump has told the military to be ready for larger strikes after the 3 November midterms (Al Jazeera).
Why it matters
A reopening would ease oil supply; larger strikes would raise supply risk.
Sources
- Iran International official statement
- Al Jazeera reporting
Houthis struck Aramco's Dhahran headquarters The Bab el-Mandeb, the main bypass route for Gulf oil, is reported to be under Houthi control; Aramco's shipping kept running.
What happened
The Houthis struck Aramco’s Dhahran headquarters and now hold the Bab el-Mandeb, the main bypass for Gulf oil (CBC/Reuters). Aramco’s shipping kept running (TradeWinds).
Why it matters
Disruption to the bypass route would add to supply risk from Hormuz.
Sources
- CBC/Reuters reporting
- TradeWinds reporting
Trump suspended sanctions and tariffs on buyers of Russian energy The Graham Act measures were suspended days before they were due to start.
What happened
Trump suspended the Graham Act sanctions and tariffs on buyers of Russian energy days before they were due to start; Investing.com linked the move to his diesel deal with Putin (Investing.com). Members of both parties in Congress criticised the decision (AP via PBS). AMP notes the diesel covers only about a day of world demand.
Why it matters
The suspension removes the threat of large US tariffs on China and India. China is Australia’s biggest customer.
Sources
- Investing.com reporting
- AP via PBS reporting
- AMP forecast
Russia launched one of its largest attacks on Ukraine's grid Putin said a "security zone" inside Ukraine is not negotiable.
What happened
Russia carried out one of its biggest attacks yet on Ukraine’s power grid. Putin said a “security zone” inside Ukraine is not negotiable (Kyiv Independent, The Independent).
Why it matters
A longer conflict keeps diesel markets tight.
Sources
- Kyiv Independent reporting
- The Independent reporting
Your watchlist
-
ZIP Zip Co A$2.170 +2.4% +0.5% wk
Fri 16 Oct close · Yahoo Finance (ZIP.AX) · delayed, unofficial
No new verified news this weekend.
Next: Quarterly update due Friday.
-
CSL CSL A$192.20 +2.8% +4.5% wk
Fri 16 Oct close · Yahoo Finance (CSL.AX) · delayed, unofficial
No new verified news this weekend.
-
FLT Flight Centre A$10.46 +2.1% +1.9% wk
Fri 16 Oct close · Yahoo Finance (FLT.AX) · delayed, unofficial
No new verified news this weekend.
-
IEL IDP Education A$2.25 +1.4% +2.3% wk
Fri 16 Oct close · Yahoo Finance (IEL.AX) · delayed, unofficial
No new verified news this weekend.
What comes next
- Sun 18 Oct RBA Assistant Governor Kent speaks AU Westpac Weekly
- Mon 19 Oct RBA's Kent speaks again AU Westpac Weekly
- Mon 19 Oct ▲ High China September-quarter GDP CN Westpac Weekly
- Tue 20 Oct BHP quarterly update; Woodside, Fortescue and Santos follow AU CommSec
- Tue (US time) Meta and Tesla results US AMP
- Wed 21 Oct RBA Deputy Governor Hauser speaks AU Westpac Weekly
- Wed 28 Oct ▲ High Fed policy decision US FXStreet