Global Fixed Income Report - October 9, 2026

Executive Summary

The test we set two weeks ago was run this week, and the long end passed it. On Thursday the Treasury sold $22bn of 30-year bonds and indirect bidders, which include central banks, took more than 72% against a ten-auction average of 68%. Yields fell on the day. Across the week the 10-year eased 4 basis points to 5.24% and the 30-year 3 to 5.60%, after both had printed fresh 24-year highs earlier in the week.

We wrote on 30 September that the refunding mattered more for this book than any macro release, because it would show whether the long end could absorb a normal calendar without cheapening further. It could. That is the first genuine evidence since 24 September that term premium is finding a level rather than simply widening, and we are treating it as evidence rather than as a turn.

African credit rallied across the board and every one of the six tightened against matched Treasuries. Ghana led at 30.2 basis points tighter, then Senegal at 21.1, Egypt at 19.5, South Africa at 8.6, Nigeria at 4.6 and Angola at 2.0. The ranking is almost the exact reverse of September's, and that is the most useful thing in it: this was a beta rally, not a re-rating. The credits that were sold hardest last month bounced hardest, and nothing in any of their fundamentals changed in five sessions.

That pattern cost us. Our two overweights, Angola and Nigeria, were the two worst performers of the week at 2.0 and 4.6 basis points tighter. Low-beta positions underperform rallies, which is what they are for, but it is worth stating plainly rather than presenting a week of relative underperformance as prudence.

Senegal tightened 24.7 basis points in yield after its first creditor call on 6 October, held alongside the IMF. Dakar told creditors it is targeting an agreement in principle with both official lenders and bondholders by December. That is the first dated milestone this credit has had, and it replaces an IMF board process with no scheduled date as the thing the position turns on.

One item of self-criticism. Our published condition for rebuilding Egypt was the 5 to 8- year sector clearing 8.75%. On 2 October the 7.61-year traded at 8.786%, through the trigger. No report fell in that window and we did not act. Egypt then rallied 21.9 basis points. The rule was right, the execution was not, and we are not chasing the level now that it has gone.