Report published September 24, 2026
No End in Sight as Fixed Income Selling Continues: MUFG Global Markets Daily
MUFG · September 24, 2026
A broad fixed income sell-off led by higher US yields is underpinning the US dollar and pushing the French OAT/Bund spread to multi-year highs of 110 bps. With bond losses mounting and volatility historically low, FX markets face growing risks of a carry trade unwind.
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Key Takeaways
- 1.Surging US Treasury yields across the curve and hawkish Federal Reserve expectations continue to propel the US dollar higher as global fixed income faces forced selling.
- 2.Worsening bond sentiment and potential fast-money duration losses raise the risk of a sharp carry trade unwind, which would hit EM high-yielders and favor the JPY and CHF.
- 3.The France-Germany 10-year spread (OAT/Bund) widened to 110 bps—the highest since 2012—fueling downside risks for EUR/USD toward the 1.10–1.12 zone if 1.1340 support breaks.
Table of Contents
- USD: Higher US yields across the curve helps the dollar
- EUR: OAT/Bund spread blowout adds to negative EUR momentum
- KEY RELEASES AND EVENTS
Report data
LOW VOL & STRONG CARRY PERFORMANCE MUST BE UNDER THREAT
| Metric | Estimate | Context |
|---|---|---|
| US 2-Year Treasury Yield Increase | 60 bps | Month-to-date rise in the US 2-year yield. |
| Brent Crude Oil Price Change | 6% | Rise from previous day lows. |
| US 5-Year UST Auction Yield | 5.033% | USD 70bn auction yield, highest level since June 2006. |
| US 5-Year UST Bid-to-Cover Ratio | 2.21 ratio | Auction bid-to-cover ratio, below 6-month average of 2.33. |
| Global Composite PMI | 58.4 index | Increased to highest level since July 2021. |
Reports in this series
FX Daily Snapshot is shown in chronological order through this edition, published on September 24, 2026.
Part of the FX Daily Snapshot series — view all 77 editions
Looking for the latest edition? FX Daily Snapshot (Oct 9, 2026)
- Sep 18FX Daily Snapshot
- Sep 21FX Daily Snapshot
- Sep 22FX Daily Snapshot
- Sep 23FX Daily Snapshot
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