Treasury yields ended the week almost exactly where Thursday’s rally left them. The 5 year yield was unchanged at 4.90 percent, the 10 year rose 0.9 basis points to 5.10 percent and the 30 year rose 0.7 basis points to 5.44 percent, small upticks that barely dented weekly falls of 12.2, 14.6 and 16.4 basis points respectively.
The shape of the week is the story. The long end led the rally, unwinding part of the steepening that followed September’s inflation surprise, as buyers treated yields above 5.4 percent on the 30 year as value. Friday’s steadiness, rather than a give back, says that bid was not purely technical, even with Brent crude up 3.72 percent on the day to 109.86 dollars a barrel and the energy shock that drove the inflation print still intensifying.
The dollar softened again, the dollar index down 0.16 percent to 101.84, while equities split: European indices rose, the STOXX 600 up 0.72 percent, against a 1.09 percent fall in the S and P 500 and a 2.5 percent fall in the Nasdaq 100. Rates, for once this week, were the calmest part of the cross asset picture.
The backdrop has not changed. The Treasury published the final fiscal 2026 deficit on Friday at 1.992 trillion dollars, up 12.2 percent on the year, a figure covered in full on this site on October 16, and foreign investors bought a net 300.7 billion dollars of long term US securities in August, also published Friday. Supply is heavy and demand, for now, is meeting it at these yields.