📰 US September PMI hits over 5-year fastest expansion, 5-year US Treasury yield briefly tops 5% for first time since 2007; Gold and Silver plunge

Key Snapshot

· 📊 US flash September composite PMI sharply beats estimates and hits a five-year high, with input cost inflation near the fastest pace in four years. The 5-year US Treasury yield briefly breaks above 5% for the first time since 2007.

· 📉 Rising risk-free rates weigh on valuations and non-yielding assets. All three major US indices close lower, Nasdaq retreats after two straight record finishes. Gold and silver tumble, Bitcoin drops below $84,000.

I. Market Outlook

Core Events

- Iran states it will not allow "free use" of the strait until sanctions are lifted: Iran says the Strait of Hormuz cannot operate freely before sanctions are removed.

Brent crude rises 3.86% to $103.08/bbl; WTI climbs 1.81% to $92.16/bbl.

- Higher risk-free rates pressure asset valuations: All three US benchmarks finish in red. Nasdaq falls 1.13% after two consecutive record closing highs. Gold loses 1.23%, silver drops 2.4%, Bitcoin slips below $84,000.

Exclusive Insight

US flash September composite PMI hits a five-year high alongside near four-year rapid input cost growth. This combination of robust growth and accelerating inflation is the worst-case scenario for markets. It pushed the 5-year Treasury yield above 5% intraday for the first time since 2007. Systemic upward repricing of risk-free rates is weighing on equities, precious metals and Bitcoin simultaneously, becoming the core macro driver for global asset pricing.

II. Overnight Market Action

— US Equities: Dow Jones -0.68% to 51511.59; S&P 500 -0.75% to 7706.03; Nasdaq -1.13% to 26936.04.

— European Equities: STOXX 600 -0.37% to 640.39. DAX -0.66% to 25410.63; CAC 40 -0.39% to 8123.41; FTSE 100 -0.03% to 10705.26.

— Bonds: 5-year US Treasury yield rises around 17 bps to 4.997%, breaking 5% intraday for the first time since 2007. 10-year yield climbs roughly 15 bps to 5.104%, hitting the highest level since July 2007.

— Commodities: WTI Nov crude +1.81% to $92.16/bbl; Brent +3.86% to $103.08/bbl. COMEX Gold -1.23% to $4322.7/oz; Silver -2.4% to $64.93/oz.

— FX: US Dollar Index +0.51% to 101.05, highest since late July.

— Crypto: Bitcoin pulled back rapidly from January high near $87,000, briefly falling below $84,000, down more than 2% in 24 hours.

III. Macro News

1. 📊 US flash September composite PMI hits five-year high, input cost inflation near four-year peak: New order expansion is the fastest since April 2022, manufacturing hiring at peak since February 2021, and corporate input cost index stands at the highest since October 2022.

Insight: Strong economic growth paired with accelerating inflation represents the Fed’s least preferred scenario. It drove the 5-year Treasury yield above 5% intraday for the first time since 2007. Higher risk-free rates are suppressing valuations across asset classes.

2. 🛢️ Iran: Strait of Hormuz will not be "freely accessible" before sanctions lifted: Iran sets sanctions relief as prerequisite for normal strait navigation, meaning the geopolitical deadlock is unlikely to ease in the near term.

IV. Corporate News

1. 🤖 Anthropic CEO: Firm will slow AI development for safety reasons. Following calls from industry leaders to pause AI advancement, Anthropic’s CEO publicly commits to slower research. AI safety concerns are shifting from academic debate into corporate decisions.

2. 💰 IPO of world’s largest data center project delayed by SoftBank’s SB Energy amid financing hurdles. The $50 billion valuation faces skepticism, and funding conditions for AI infrastructure are tightening.

V. Key Events to Watch

· 📊 US Initial Jobless Claims for week ending Sep 19: Test the resilience of the labour market.

· 📊 US August New Home Sales: Check housing supply and demand under high interest rates.