Market Update 09/2026 | The Oil Shock Is Over as Rate-Hike Fears Fade
The Oil Shock Is Over as Rate-Hike Fears Fade; Earnings Broaden and Bonds Stay Attractive
In September 2026, T&T International positions for a cyclical broadening, maintaining an Attractive stance on equities across the US, Europe, Asia ex-Japan, Japan, Singapore, Malaysia, Taiwan, Australia, Emerging Markets, China, India and Germany. Global equities extended their gains over the past month, supported by a robust earnings season, rising AI adoption and reduced concerns of a sustained Fed hiking cycle. With supportive fiscal policies, recovering manufacturing and healthy access to capital, we lift our EPS growth targets for the MSCI AC World Index to 26% for this year and 14% for next — and expect performance to broaden well beyond technology.
We maintain an Attractive view on bonds overall, with corresponding Attractive views on high grade, investment grade, emerging market and high yield. The primary rationale is the persistent cheapness in rates, which we expect to drive total returns and provide a valuable buffer against spread and rate volatility. Broad commodities, copper, structured investment strategies in gold and active commodity strategies remain Attractive. In FX, the GBP and NOK head our list alongside the NZD and CNY, while we are Neutral on the EUR and USD; we expect EUR/USD to move gradually toward 1.20 as markets continue to scale back Fed rate-hike expectations.
The Topic of the Month — Economy and Interest Rates — argues the oil price shock is over and the inflationary pressure it triggered will prove less severe than feared. In Europe, the rise in inflation has been driven purely by energy, with services yet to follow, so a wage-price spiral is not on the cards: the ECB is unlikely to hike a second time and the SNB should hold as well — excluding oil and oil products, Swiss inflation stands at just 0.1%. The US is a different picture, where robust domestic demand, particularly investment in data centres, keeps the risk of more restrictive policy alive. Either way, the rate cuts expected at the start of the year are off the table.
