The Switch

September 28, 2026

Elias Haddad

Bonds are increasingly attractive relative to stocks.

Intervention warning lifts JPY.

Fed speakers and ECB Lagarde headline a light calendar.

Check-out our Drivers for the Week Ahead for the upcoming key market shaping themes.

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Midterms and the market: Register Here

Control of Congress is up for grabs, and the outcome will shape rates, equities, and the dollar into year-end. Join BBH’s Elias Haddad and Scott Clemons where they will cover the potential impacts.

Friday, 2 Oct | 30 Minutes, Zoom

07:00 PDT | 10:00 EST | 15:00 GMT | 16:00 CET

The rebound in crude oil prices is pushing global bond yields higher as the path to US-Iran talks remains uncertain. President Donald Trump said on Sunday he expects US negotiators to engage in more talks with Iran this week, but prospects for a breakthrough looks slim.

Meanwhile, the renewed bond market selloff is leaving equity valuations harder to justify. The S&P500 current earnings yield has fallen further below the 10-year Treasury yield, making Treasuries increasingly attractive relative to stocks.

USD is broadly firmer, but intervention risk keeps JPY on the front foot. Japan’s top currency diplomat Atsushi Mimura said markets should heed the “very clear” message Tokyo and Washington sent last week on yen weakness. We expect USD/JPY to hold within a 155.00-160.00 range in the near term.

USD can continue to benefit from widening US-G6 interest rate differentials and rising US longer-term real yields. Still, tightening by other major central banks limits policy divergence with the Fed and suggests DXY could struggle to sustain an overshoot of its June 24 high at 101.80. Even so, US economic growth outperformance and strong foreign appetite for US securities can override that upside USD constraint.

On deck today: Fed Vice Chair for Supervision Michelle Bowman speaks on bank supervision and regulation with a Q&A session. Fed Governor Lisa Cook speaks about AI and emerging tech with no Q&A session. Richmond Fed President Tom Barkin (2027 voter) participates in a fireside chat. ECB President Christine Lagarde discusses the ECB staff September macroeconomic projections.

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