Global Weekly Fixed Income Report - September 18, 2026
Executive Summary
The Federal Reserve raised rates for the first time since July 2023, and the Treasury curve did exactly what we positioned for. The Committee voted 12 to 0 on Wednesday to take the target range to 3.75% to 4.00%. The 3-year rose 14 basis points to 4.83% and the 2-year 13 to 4.76%, while the 20-year finished unchanged at 5.38% and the 30-year fell a basis point to 5.34%. 2s10s flattened from 33 basis points to 25 and 2s30s from 72 to 58. We published an exit trigger last week: the long end moving in step with the front end. It moved the other way.
The long end held because the underlying inflation data gives the Fed room. Core CPI printed 2.4% on 11 September, the lowest since March 2021, while headline stayed at 3.4% with gasoline up 27.4% over twelve months. A central bank tightening against an energy shock while its preferred core measure sits at a five-year low is buying insurance, not fighting a wage spiral, and the thirty-year price says the market read it that way. The Committee's own long-run median is 3.2%.
The oil market inflated and deflated a war premium inside four sessions. A merchant vessel was struck in the Strait of Hormuz on Sunday and Saudi Arabia shut the East-West pipeline after drone attacks, taking Brent to $108.75 by Tuesday's close. Washington then said the pipeline would restart within days, Riyadh offered more crude through the strait, and Brent closed the week at $103.87, down 0.7%. Anyone who bought the spike on Tuesday paid for the diplomacy on Friday.
African credit came through the rate move well. Every performing sovereign except Egypt rose in yield, but the Treasury curve rose faster in the sectors that matter, so 40 of the 65 bonds we cover tightened against matched Treasuries. Ghana gained 5.7 basis points of spread, Nigeria 3.2 with all fifteen of its bonds tighter, and Egypt 3.8 once its two sub-six-month bonds are stripped out. South Africa lost 1.8 and Angola 6.3.
Angola was the week's casualty and the reason is the barrel. It is the purest oil exposure in the coverage, and seven of its eight bonds widened as Brent gave back the Monday and Tuesday spike. Our published trigger for cutting Angola is Brent below $80. Brent is at $103.87, so we are not cutting, and we would rather hold a bad week than trade against a rule we set in calmer conditions.
Senegal rallied again and the hierarchy repeated. The 7.75% 2031 tightened 25.5 basis points of spread to 25.41%, the 6.25% 2033 tightened 19.2 to 19.13% and the 6.75% 2048 tightened 7.6 to 13.64%. The shortest bond led for the second week running, which is what happens when a market prices willingness to pay rather than capacity to repay. We still cannot confirm that bondholders received the 13 September coupon, only that Dakar said it would pay and that the price action is consistent with payment. The second half of our intended addition stays on the shelf until someone can show us settlement.
