Euro Area ECB Buch Speech

United States 17-Week Bill Auction

Canada 10-Year Bond Auction

United States 20-Year Bond Auction

The yield on the 10-year Swiss government bond was below 0.15%, the lowest since January 2022, as investors continued to assess the outlook for interest rates. SNB Chair Schlegel once again emphasized that inflation is expected to rise modestly in the coming quarters, reducing the likelihood of the SNB moving into negative interest rates. The SNB kept its policy rate at 0.00% at its September meeting, amid weak inflationary pressures. Swiss inflation stood at 0.2% for the third consecutive month in September, slightly undershooting forecasts of 0.3%. SNB policymakers have been reluctant to push rates below 0% to avoid hurting the financial system. Meanwhile, market participants awaited the Swiss National Bank’s September meeting summary, set for release on October 23, for indications on how the bank plans to address the franc’s strength, through cutting rates further into negative territory or market interventions.

Swiss 10-Year Bond Yield at 2022-Lows

Aluminum futures in the UK rose to $2,815 per tonne in October, the highest in three years, on a backdrop of increasingly tight supply. Major consumers remained alert to near-term tightness in physical markets due to China's aluminum output cap of 45 million tons, which is set to be breached this year under current capacity. The move was exacerbated by Beijing cutting its annual output growth target for base metals to an average of 1.5% annually for next year, compared to the 5% target previously, aligned with its anti-involution campaign to slow deflationary pressures. Troubles for key refineries also pressured supply, with one of two potlines in Iceland's Grundartangi smelter being suspended due to electrical equipment failure. Also, Alcoa announced it will shut its Kwinana alumina refinery in Australia due to deteriorating bauxite or grades. Consequently, primary aluminum stocks at the LME this year fell by nearly 25% to 484,000 tonnes.

Aluminum Rises to 3-Year High

The Mexican peso strengthened past 18.40 per US dollar, hovering near over one-year highs as the Mexican currency continues to benefit from carry-trade appeal despite growing evidence of a slowing economy. Mexico’s economic activity index fell 0.9% year-on-year in August, after a 1.1% decline in July but less than market expectations of a 1% drop. However, the lack of surprises in recent data left markets to price a more gradual easing path rather than abrupt shocks to liquidity. Mexico still offers a materially higher real yield than many peers even after recent rate cuts, which keeps the carry trade alive and attracts foreign portfolio flows. At the same time prospects of a US government funding resolution and calmer US China trade rhetoric have eased the risk of a sudden stop in external demand, narrowing the external risk premium.

Mexican Peso Holds Strong

The Ibovespa gained 0.3% to trade above 144,000 on Wednesday with support from heavyweight Vale. The miner climbed over 1% after reporting its highest quarterly iron ore output since 2018, rising 3.4 million tonnes from the previous year to 94.4 million tonnes in Q3 2025. Vale also received support from iron ore futures, that advanced amid optimism over easing US-China trade tensions and potential stimulus from Beijing. Oil prices extended gains for a second day, boosting Petrobras by 0.6% as India reportedly considers cutting Russian oil imports. Banks were also higher, with Banco do Brasil rising 0.2%, and Bradesco 0.4%. Romi surged over 5% after reporting a 15.3% annual increase in quarterly net profit to R$27.4 million. On the downside, WEG fell 0.8% after results missed expectations, while Ambev slipped 0.9% amid weak sales outlook. Fleury sank near 5% after JPMorgan downgraded the stock, following reports that Rede D’Or’s acquisition talks had collapsed.

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