# Briefing — week to Friday, 23 October 2026 *Growth is steady and price pressure soft, a benign regime likely to persist. This week credit spreads widened while long Treasury yields fell, a defensive rotation. Stay long duration, trim high yield and emerging market credit risk.* ## What changed The credit leg has changed. Investment grade spreads widened 4bp1, high yield 9bp2 and emerging market corporates 12bp3. Trim both; hold duration, where the ten-year fell 13bp4. ## Regime The regime model still reads Goldilocks and puts a high probability on that state persisting. Equity weakness and the quadrant disagreement narrow the benign call rather than overturn it, and I would hold duration while trimming credit risk. ## Monetary policy Nothing from the Federal Reserve this week bears on the rate path. Bowman set out lessons from the Silicon Valley Bank failure, arguing that "long-standing uncertainty about decisionmaking authority and the lack of clear accountability impeded timely decisionmaking"5. This is a supervisory agenda and should not be read as a signal about the policy rate. ## Rates and curve Stay long duration: the rally came through real yields. The ten-year fell 13bp4 to 4.96%6 and the ten-year real yield fell 10bp7 to 2.64%8, with the two-to-ten spread narrowing 4bp9 to 0.31%10. The flattening argues for owning duration. ## Credit Trim high yield here. High yield spreads widened 9bp2 to 3.40%11, near the fifty-two week high of 3.46%12; investment grade widened only 4bp1 to 0.89%13. The corporate total return index gained 0.6%14. ## Equities Keep the defensive tilt. The S&P rose 1.3%15 to 7,757.1716, while the Nasdaq fell 0.7%17. The split narrows the benign reading rather than breaking it. ## FX and commodities Currency and energy do not argue for a change in positioning. Brent fell 4.1118 dollars per barrel to 115.2219. Crude at these levels is a live upside risk to headline inflation. ## Macro data Growth and the labour market support staying long duration. The Atlanta Fed nowcast stands at 3.50%20 and unemployment was 4.20%21. Core PCE rose 3.0%22 on the year. Inflation is the weaker leg. ## United Kingdom The call travels to gilts: the twenty-year rose just 1bp23, with Bank Rate held at 3.75%24. We hold UK long duration alongside Treasuries. ## Euro area Trim euro credit risk too. Euro high yield spreads widened 23bp25 to 3.54%26, while the ten-year yield fell 6bp27. The policy rate will stay on hold. ## Japan Japanese duration backs the stance: the ten-year fell 4bp28 to 2.91%29. The Nikkei lost 4.0%30. That is a repricing of equity risk premia, not of growth. ## Canada Canada supports duration as well. The ten-year fell 6bp31 to 3.78%32, with the policy rate unchanged at 2.25%33. ## Emerging markets Cut emerging market credit risk further. Sovereign spreads widened 12bp3 and high yield corporates 20bp34 to 3.6535%. The spread move is the better signal here. ## Fiscal and trade policy Trade policy still adds to goods costs. The President modified the scope of products of Canada subject to the duties, effective "on or after 12:01 a.m. eastern time on October 30, 2026"36. That favours duration over credit risk. ## Citations 1. BAMLC0A0CM.chg_1w = BAMLC0A0CM[2026-10-22] - BAMLC0A0CM[2026-10-16] — https://fred.stlouisfed.org/series/BAMLC0A0CM (2026-10-22) 2. BAMLH0A0HYM2.chg_1w = BAMLH0A0HYM2[2026-10-22] - BAMLH0A0HYM2[2026-10-16] — https://fred.stlouisfed.org/series/BAMLH0A0HYM2 (2026-10-22) 3. BAMLEMCBPIOAS.chg_1w = BAMLEMCBPIOAS[2026-10-22] - BAMLEMCBPIOAS[2026-10-16] — https://fred.stlouisfed.org/series/BAMLEMCBPIOAS (2026-10-22) 4. DGS10.chg_1w = DGS10[2026-10-22] - DGS10[2026-10-16] — https://fred.stlouisfed.org/series/DGS10 (2026-10-23) 5. Bowman, Supervisory Modernization After Silicon Valley Bank ¶6 — https://www.federalreserve.gov/newsevents/speech/bowman20261014a.htm (2026-10-15) 6. DGS10.latest = DGS10[2026-10-22] — https://fred.stlouisfed.org/series/DGS10 (2026-10-23) 7. DFII10.chg_1w = DFII10[2026-10-22] - DFII10[2026-10-16] — https://fred.stlouisfed.org/series/DFII10 (2026-10-23) 8. DFII10.latest = DFII10[2026-10-22] — https://fred.stlouisfed.org/series/DFII10 (2026-10-23) 9. T10Y2Y.chg_1w = T10Y2Y[2026-10-23] - T10Y2Y[2026-10-16] — https://fred.stlouisfed.org/series/T10Y2Y (2026-10-23) 10. T10Y2Y.latest = T10Y2Y[2026-10-23] — https://fred.stlouisfed.org/series/T10Y2Y (2026-10-23) 11. BAMLH0A0HYM2.latest = BAMLH0A0HYM2[2026-10-22] — https://fred.stlouisfed.org/series/BAMLH0A0HYM2 (2026-10-22) 12. BAMLH0A0HYM2.hi_52w = max(BAMLH0A0HYM2[2025-10-27..2026-10-22]) — https://fred.stlouisfed.org/series/BAMLH0A0HYM2 (2026-10-22) 13. BAMLC0A0CM.latest = BAMLC0A0CM[2026-10-22] — https://fred.stlouisfed.org/series/BAMLC0A0CM (2026-10-22) 14. BAMLCC0A0CMTRIV.pct_1w = (BAMLCC0A0CMTRIV[2026-10-22] - BAMLCC0A0CMTRIV[2026-10-16]) / BAMLCC0A0CMTRIV[2026-10-16] * 100 — https://fred.stlouisfed.org/series/BAMLCC0A0CMTRIV (2026-10-22) 15. SP500.pct_1w = (SP500[2026-10-21] - SP500[2026-10-16]) / SP500[2026-10-16] * 100 — https://fred.stlouisfed.org/series/SP500 (2026-10-24) 16. SP500.latest = SP500[2026-10-21] — https://fred.stlouisfed.org/series/SP500 (2026-10-24) 17. NASDAQCOM.pct_1w = (NASDAQCOM[2026-10-23] - NASDAQCOM[2026-10-16]) / NASDAQCOM[2026-10-16] * 100 — https://fred.stlouisfed.org/series/NASDAQCOM (2026-10-23) 18. DCOILBRENTEU.chg_1w = DCOILBRENTEU[2026-10-20] - DCOILBRENTEU[2026-10-16] — https://fred.stlouisfed.org/series/DCOILBRENTEU (2026-10-21) 19. DCOILBRENTEU.latest = DCOILBRENTEU[2026-10-20] — https://fred.stlouisfed.org/series/DCOILBRENTEU (2026-10-21) 20. GDPNOW.latest = GDPNOW[2026-07-01] — https://fred.stlouisfed.org/series/GDPNOW (2026-10-20) 21. UNRATE.latest = UNRATE[2026-09-01] — https://fred.stlouisfed.org/series/UNRATE (2026-10-02) 22. PCEPILFE.pct_yoy = (PCEPILFE[2026-08-01] - PCEPILFE[2025-08-01]) / PCEPILFE[2025-08-01] * 100 — https://fred.stlouisfed.org/series/PCEPILFE (2026-09-30) 23. GB20Y.chg_1w = GB20Y[2026-10-21] - GB20Y[2026-10-16] — https://www.bankofengland.co.uk/boeapps/database/ (2026-10-23) 24. GBPOL.latest = GBPOL[2026-10-22] — https://www.bankofengland.co.uk/boeapps/database/ (2026-10-23) 25. BAMLHE00EHYIOAS.chg_1w = BAMLHE00EHYIOAS[2026-10-22] - BAMLHE00EHYIOAS[2026-10-16] — https://fred.stlouisfed.org/series/BAMLHE00EHYIOAS (2026-10-22) 26. BAMLHE00EHYIOAS.latest = BAMLHE00EHYIOAS[2026-10-22] — https://fred.stlouisfed.org/series/BAMLHE00EHYIOAS (2026-10-22) 27. EA10Y.chg_1w = EA10Y[2026-10-22] - EA10Y[2026-10-16] — https://data.ecb.europa.eu/ (2026-10-24) 28. JP10Y.chg_1w = JP10Y[2026-10-22] - JP10Y[2026-10-16] — https://www.mof.go.jp/english/policy/jgbs/reference/interest_rate/ (2026-10-24) 29. JP10Y.latest = JP10Y[2026-10-22] — https://www.mof.go.jp/english/policy/jgbs/reference/interest_rate/ (2026-10-24) 30. NIKKEI225.pct_1w = (NIKKEI225[2026-10-23] - NIKKEI225[2026-10-16]) / NIKKEI225[2026-10-16] * 100 — https://fred.stlouisfed.org/series/NIKKEI225 (2026-10-23) 31. CA10Y.chg_1w = CA10Y[2026-10-22] - CA10Y[2026-10-16] — https://www.bankofcanada.ca/valet/ (2026-10-24) 32. CA10Y.latest = CA10Y[2026-10-22] — https://www.bankofcanada.ca/valet/ (2026-10-24) 33. CAPOL.latest = CAPOL[2026-10-22] — https://www.bankofcanada.ca/valet/ (2026-10-24) 34. BAMLEMHBHYCRPIOAS.chg_1w = BAMLEMHBHYCRPIOAS[2026-10-22] - BAMLEMHBHYCRPIOAS[2026-10-16] — https://fred.stlouisfed.org/series/BAMLEMHBHYCRPIOAS (2026-10-22) 35. BAMLEMHBHYCRPIOAS.latest = BAMLEMHBHYCRPIOAS[2026-10-22] — https://fred.stlouisfed.org/series/BAMLEMHBHYCRPIOAS (2026-10-22) 36. FURTHER MODIFYING THE SCOPE OF PRODUCTS OF CANADA SUBJECT TO THE ADDITIONAL DUTIES IMPOSED TO OFFSET CANADIAN DISCRIMINATION AGAINST THE COMMERCE OF THE UNITED STATES WITH RESPECT TO MOTOR VEHICLES ¶13 — https://www.whitehouse.gov/presidential-actions/2026/10/further-modifying-the-scope-of-products-of-canada-subject-to-the-additional-duties-imposed-to-offset-canadian-discrimination-against-the-commerce-of-the-united-states-with-respect-to-motor-vehicles/ (2026-10-23)