EllTec Analysis

EllTec Analysis

Macro dashboard

The macro drivers behind every EllTec analysis in one place: interest rates, the yield curve, inflation, the labour market, the US dollar and oil. Updated automatically several times a day.

Weekly macro commentary · Oct 5, 2026

Rates up, energy up, earnings strong

Global markets enter October 2026 in a clearly tighter monetary environment. Several central banks are raising rates again because energy prices, driven by the conflict in the Middle East, have pushed inflation back above target, while corporate earnings remain unusually strong.

Rates: the tightening cycle is back

The Federal Reserve raised its policy rate by 0.25 percentage points on September 16 to 3.75%–4.00%, its first hike since 2023. The ECB raised rates for the second time this year (deposit rate 2.50%, main refinancing rate 2.65%), and the central banks of Australia (cash rate 4.60%) and South Africa (repo rate 7.25%) also hiked in September. Long-term yields have moved sharply higher: the 10-year US Treasury yield stood at 5.28% on October 2, the highest since 2007 and more than 1.1 percentage points above its level a year ago. The yield curve (10 years minus 2 years) remains positive at +0.47 percentage points.

Inflation: an energy shock, not a broad price spiral

US consumer prices rose 3.4% year over year in August and euro area prices 3.2%. The driver is energy: Brent crude traded near 114 US dollars per barrel at the end of September, about 27% higher than a month earlier and around 65% higher than a year ago. Core inflation tells a calmer story: excluding food and energy, US inflation eased to 2.4% and euro area core inflation also stands at 2.4%. That is why central banks are hiking cautiously rather than aggressively.

Growth and earnings

The US labour market is cooling only slowly (unemployment rate 4.2% in September). Europe grew 0.6% in the second quarter, while China slowed to 4.3% year over year, below its own target, and South Africa's economy shrank slightly. Corporate America remains strong: according to FactSet, S&P 500 companies are expected to report earnings growth of about 29.5% for the third quarter, and because profits are rising faster than prices, the forward P/E has fallen to 19.0, close to its 10-year average.

What this means for the asset classes we cover

  • Equities: strong earnings versus higher discount rates. Long-duration growth stocks and small caps are most sensitive to yields above 5%.
  • Commodities: high oil prices support sugar through Brazil's shift from sugar to ethanol; gold has corrected from its January high but structural central bank demand remains intact.
  • Crypto: tighter liquidity weighs on prices, but US spot Bitcoin ETFs recorded their strongest week of inflows since October 2025 in late September.
  • Emerging and frontier markets: a stronger dollar (broad dollar index +2.4% in a month) and higher US yields are a headwind for capital flows.

What to watch

The third-quarter earnings season in the coming weeks, the next inflation releases (above all whether energy prices start to ease), and whether long-term yields stabilise or continue to climb. A sustained move in the 10-year yield above current levels would be the main risk for equity valuations.

Data: FRED (Federal Reserve Bank of St. Louis), Federal Reserve, ECB, FactSet Earnings Insight, central bank releases. For information only, not investment advice.

Interest rates

Fed funds rate (upper target)

4.00 %

as of Oct 6, 2026 · 1 month: +0.25 pp · 1 year: −0.25 pp

The Federal Reserve's policy rate. Higher rates tighten liquidity, which tends to weigh on growth stocks and crypto.

ECB deposit rate

2.50 %

as of Oct 6, 2026 · 1 month: +0.25 pp · 1 year: +0.5 pp

The rate banks receive for deposits at the ECB, the euro area's effective policy rate.

US 10-year Treasury yield

5.28 %

as of Oct 2, 2026 · 1 month: +0.49 pp · 1 year: +1.18 pp

The global reference for long-term rates and the discount rate for equity valuations.

US 2-year Treasury yield

4.83 %

as of Oct 2, 2026 · 1 month: +0.44 pp · 1 year: +1.28 pp

Closely follows expectations for the Fed's next moves.

Yield curve (10y minus 2y)

+0.47 pp

as of Oct 5, 2026 · 1 month: +0.06 pp · 1 year: −0.08 pp

Below zero (inverted) has historically preceded recessions; a re-steepening often comes as the cycle turns.

Inflation

US inflation (CPI, year over year)

3.40 %

as of August 2026 · 1 month: +0.1 pp · 1 year: +0.5 pp

Consumer price inflation; the Fed targets 2%.

US core inflation (excl. food and energy)

2.40 %

as of August 2026 · 1 month: −0.1 pp · 1 year: −0.7 pp

Strips out volatile food and energy prices and shows the underlying trend.

Euro area inflation (HICP, year over year)

3.20 %

as of August 2026 · 1 month: +0.3 pp · 1 year: +1.2 pp

Harmonised consumer price inflation in the euro area; the ECB targets 2%.

Economy

US unemployment rate

4.20 %

as of September 2026 · 1 month: +0.1 pp · 1 year: −0.2 pp

A rising rate signals a cooling economy and often earlier rate cuts.

Dollar and energy

US dollar index (broad, Fed)

121.4

as of Oct 2, 2026 · 1 month: +2.4 % · 1 year: +0.8 %

A stronger dollar tightens global financial conditions and often weighs on emerging markets and commodities.

Brent crude oil (USD per barrel)

113.96 USD

as of Sep 29, 2026 · 1 month: +27 % · 1 year: +65.2 %

Energy prices feed directly into inflation and into ethanol economics for sugar.

Source: FRED, Federal Reserve Bank of St. Louis (data from the Federal Reserve, U.S. Treasury, BLS, ECB, Eurostat and EIA). Inflation rates are calculated year over year from the price indices. Last refreshed: Oct 6, 2026. For information only, not investment advice.