[MARKET ANALYSIS] USTs and Gilts soar as energy prices fall, with strength also facilitated by trade optimism

Newsquawk Staff · 21 Sept 2026, 09:40 UTC

USTs (+8 ticks) are stronger this morning, benefiting from 1) falling energy prices and 2) markets awaiting the US-China meeting at the White House on Thursday. On the first point, supply disruptions remain, and Trump recently said he is thinking of “blowing up” all of Iran. It seems as if markets are shifting their attention to the UNGA this week, with Trump reportedly set to meet Gulf leaders and then President Xi. There may be growing hopes that a framework agreement/deal can be ironed out; recent reports have noted that Pakistan’s Interior Minister has travelled to Iran.
On the trade front, mood music between the US and China is constructive; Trump has suggested he has a good relationship with Xi, whilst Treasury Sec. Bessent mentioned that recent talks have been constructive. Heading into the meeting, it was reported that China had upped its US soy cargoes, whilst China’s rare earth shipments to the US have dropped.
Yields are lower across the curve, with very slight underperformance at the belly. The US 10-year (4.96%) has now slipped below the key 5.00% mark, given the aforementioned energy dynamics. A constructive UNGA mood and/or geopolitical progress could help the 10-year continue to slip to near-term lows, with 4.92% a likely area of support (low from 18 Sep).
Gilts (+72 ticks) outperform vs peers, and currently hold towards the upper end of an 85.28 to 85.76 range. UK-specific news flow has been focused on pre-budget speculation around housing and CGT, but with action in UK paper today ultimately driven by energy dynamics. On trade relations, UK PM Burnham is set to meet US President Trump this week. Reports suggest that the talks between the pair will focus on the Middle East, energy costs and the ongoing Russia-Ukraine conflict.
For Bund, OAT and BTP analysis, please see the Market Analysis piece at 10:08 BST.

What our morning note said

EU Market Open, 21 Sept, 05:40 UTC · what it led with

US President Trump reportedly said on Sunday that he is thinking of "blowing up" all of Iran as he left the Camp David retreat a day early to return to the White House.
APAC stocks were ultimately mixed, but with cautious gains; European equity futures indicate a positive cash market open.

Read the whole note Free to read.

Newsquawk Daily

Get the next one free, by email.

What moved overnight, where stocks, bonds, currencies and oil stand, and what’s due today. Written by our analysts.

Both market-open notes, EU and US, every weekday. No account needed. Unsubscribe any time.

If you trade

This headline was on the Newsquawk live feed at 09:20 UTC.

Use the Platform opens our news terminal in your browser, with the live headline feed. It’s news, not a broker.

Use the Platform

Free. No signup, no card.

Case studies

Headlines that moved markets

FX headlines from our feed, and what the market did next.

Iranian President Pezeshkian says the Supreme Leader has granted the government some authority on dialogue, ISNA reports.
EUR/USD+0.1%
ECB policymakers see a December rate hike followed by a pause; New ECB staff estimates show the rise in bond yields cutting growth by a cumulative 100bps and inflation by 90bps in 2027-28 vs the September baseline, according to reports, citing sources.
EUR/USD−0.1%
ECB President Lagarde (Q&A) says policymakers believe they are in a good position to wait for incoming information. The situation they are in could have warranted a hike.
EUR/USD+0.1%

See all 221

More on this story

Make Newsquawk a preferred source on GoogleSelect this to see Newsquawk more often in Top Stories when you search Google.

More on this story

Related headlines