Market Watch
Astero Falcon DIFC Limited October 2026
Macroeconomics: Elevated Inflation and a Slowing Labour Market
01
Equities: An “Unnoticed” Correction
02
Bonds: Yields Continue to Rise
04
Currencies: The Dollar at a Key Resistance Level
06
Alternative Investments: The Start of a Bull Cycle in Cryptocurrencies?
08
Direct Investments: Market Dynamics Differ Across Funding Stages
09
September: A Correction in Risk Assets Amid Rising Yields
11
For Professional Clients Only – Not for Retail Distribution.
Macroeconomics: Elevated Inflation and a Slowing Labour Market
01
The CPI report published on September 11
Retail sales and food services rose by 1.2% month-
showed consumer prices rising by 0.4% month-on-
on-month and 6.0% year-on-year in August,
month and 3.4% year-on-year in August. The rise
reaching $773.9 billion. This contrasts with the
in gasoline was particularly marked, at +3.9% over
more cautious consumer-sentiment indicators:
the month, and accounted for more than one third
consumer confidence fell to 89.4 in August, and
of the monthly increase in headline CPI. This
the expectations index was particularly weak at
matters
Reserve:
68.2. The US economy is still showing that
inflation remains materially above the 2% target.
consumers can keep spending despite high
especially
for
the
Federal
The labour market has begun to show signs of cooling. The Bureau of Labor Statistics report of 4 September showed that the US economy created 162,000 jobs in August, while unemployment remained at 4.1%. This is a notable combination:
inflation and high borrowing rates, and for the equity market this is a supportive factor. If consumer sentiment continues to deteriorate, however, today’s strong spending may prove unsustainable.
the labour market does not yet look as though it
US investors’ attention is currently focused on the
has
divergence
collapsed,
but
it
is
no
longer
as
between
resilient
growth
and
unambiguously strong as in previous years. In
persistent inflation. If inflation declines, room
theory, a weaker labour market can reduce
opens for a softer Federal Reserve policy, and that
inflation and give the Federal Reserve room to cut
is a potentially favourable environment for bonds
rates, but at the same time it raises the risk of an
and rate-sensitive equities. If inflation remains
economic
employment
high and the Fed continues to raise rates, pressure
reports are therefore particularly important for
will fall above all on long-dated bonds and on
equities and bonds: investors will watch closely for
equities with high multiples. In September, the
the balance between inflationary pressure from
second of these views prevailed, and the bond
commodities and deflationary pressure from the
market came under heavy pressure. The PCE
labour market.
release on September 30 and the employment
slowdown.
The
next
There are still few signs of a sharp cooling in the economy. Retail sales rose by 1.2% month-onmonth in August, and the retail control group by 1.4%.
The
composite
PMI
rose
to
58.4
in
September. The Atlanta Fed’s GDPNow estimates real US GDP growth in the third quarter at approximately 5.0% on an annualised basis. This reflects strong quarterly momentum, whereas the Federal Reserve’s longer-term growth estimate remains around 2%.
Source: Bloomberg, Astero Falcon analytics.
report on October 2 will be particularly important: they will show whether the September picture is confirmed, or whether a different one is gradually taking shape.
Equities: An “Unnoticed” Correction At the end of September, only 26% of the stocks in the S&P 500 were trading above their 50-day moving average (50MA). That is roughly 133 of the 503 companies in the index. Over the month, the reading fell from 53% to 26%, almost by half.
The S&P 500 is a capitalisation-weighted index. A handful of the largest companies can therefore rise so strongly that the index as a whole looks healthy even while most constituents are falling, and that is exactly what is happening now. At the end of September, the S&P 500 itself stood only 1% below its record close in August, yet within the index there were 26 new 52-week lows and only 5 new price highs. At the same time, the equal-weighted S&P 500 had already fallen 6% from its peak, a tangible reading for an ordinary market correction.
02
Although the S&P 500 is only 1% below its all-time price high, the median stock in the index is trading 16% below its 52-week highs. According to Goldman Sachs, this measure of market breadth has fallen to its lowest level since the dot-com bubble. The share of stocks trading below their 200-week moving average fell to 41%. In the past, technical weakness of this kind was seen near post-correction lows and served as a contrarian signal to buy.
Forty-eight per cent of professional portfolio managers expect the equity market to decline over the next six months. As with the share of stocks trading above their 50-day moving average, scepticism among the majority of investors often acts as a contrarian indicator.
S&P 500 index and percentage of stocks above 200 day MA
The share of S&P 500 stocks trading above their 200-day moving average fell to 45%. In the past, episodes of such widespread equity “weakness” were favourable moments for long-term purchases of equities.
Source: Bloomberg, Astero Falcon analytics.
Equities: An “Unnoticed” Correction
03
S&P 500 Index vs S&P 500 equal-weighted index
Since the beginning of September, the equal-weighted S&P 500 has fallen by 6%, while the standard version, in which larger companies carry a higher weight, remains close to its historical highs. We consider that the market has already been through an unnoticed correction, and that a recovery is now more likely than a further, deeper correction.
Source: Bloomberg, Astero Falcon analytics.
Bonds: Yields Continue to Rise September sharply changed the picture in the rates market. On September 16, the US Federal Reserve raised its policy rate by 25 basis points for the first time since 2023, to 3.75–4.00%. The decision was unanimous. The September projections put the median rate at 4.1% at the end of both 2026 and 2027, 3.9% at the end of 2028 and 3.6% at the end of 2029.
After the meeting, the sell-off in Treasuries continued. By the end of September, the 10-year yield had risen above 5.3% and the 30-year yield to 5.6%. Only a month earlier, a weak labour market had supported a scenario in which the Federal Reserve paused. The latest data have changed that premise: economic activity remains high, and inflation has accelerated again.
Towards the end of September, the selloff accelerated sharply. The MOVE Treasury volatility index rose above 100, from levels of around 75–80 earlier in the month. Weakness at individual auctions added to the sell-off. The speed of the move already resembles a capitulation, although that in itself does not mean a peak in yields has formed.
Long-dated bond yields in every G7 country are closing September above the crisis levels of 2007. The market is repricing, in real time, the premium required to hold long-term sovereign debt. What is notable is that conditions are more stable outside the G7: the yield on Chinese 10-year bonds, for example, is at a historical low of 1.6%.
Another factor behind higher yields, above all in the United States, remains strong demand for capital. The private sector is financing a new investment cycle, and the government a sizeable budget deficit. Stronger potential and nominal growth improves the tax base and the debt-to-GDP ratio over time, but at this stage the government and private borrowers are competing for the same pool of capital. As a result, the equilibrium real rate may stay above the levels seen in the 2010s even after the current Federal Reserve cycle ends.
Source: Bloomberg, Astero Falcon analytics.
04 A substantial part of the rise in nominal yields is coming through the real rate, rather than through a sharp deterioration in long-term inflation expectations. The market is demanding greater compensation for the cost of capital, for maturity and for uncertainty, without pricing in a loss of control over inflation.
September’s Treasury auctions showed a clear difference between segments of the curve. The 10year and 30-year auctions were well received, with a high share of indirect bidders. The middle of the curve looked weaker: at the five-year auction, the bid-to-cover ratio fell to 2.21 and the share of indirect bidders to 54.3%; at the seven-year auction, the indirect share was 57.2%.
For now, this looks more like caution in the part of the curve most sensitive to the Federal Reserve’s near-term path than like a general rejection of US government debt. October’s auctions will show whether the new yield levels can bring back sustained investor demand.
The Treasury buyback program is becoming an independent factor. Its expansion followed the sharp rise in long-term yields and strengthened the expectation that, should liquidity deteriorate again, the Treasury will be prepared to act more forcefully. For the investor, this reduces the risk of an uncontrolled rise in long-term yields. Inflation and heavy supply can still push rates higher, but if liquidity worsens the market will look for larger buybacks or a change in the maturity structure of issuance.
Overall, we consider that long-dated bonds are gradually becoming attractive as an investment.
Bonds: Yields Continue to Rise
05
ICE BofA MOVE Index
The MOVE index, which measures the volatility of US Treasury bonds, has risen above 100 and points to serious stress in the government bond market. If the index continues to rise, we consider verbal and financial intervention by the leading central banks to be highly probable. G7 10-year government bond yields
Through September, sovereign bond yields in the G7 countries continued to rise sharply. With the nominal stock of public debt still growing, investors are questioning whether the fiscal path of the leading Western economies is sustainable, and they are demanding a premium to hold those bonds. By the end of September, bond yields in most Western economies had returned to the levels recorded on the eve of the 2007 financial crisis.
Source: Bloomberg, Astero Falcon analytics.
Currencies: The Dollar at a Key Resistance Level In September, for the first time since 2023, the US Federal Reserve raised its dollar policy rate by 25 basis points, to 3.75–4%. Following the decision, US Treasury yields rose and the US dollar strengthened through the second half of September.
The European Central Bank also tightened policy by 25 basis points, raising rates against a backdrop of persistent inflation and higher inflation risks arising from the conflict in the Middle East. The euro drew some local support from the tighter policy, but weakened again towards the end of the month: EUR/USD fell to 1.13, on a strong dollar and on energy risks for Europe.
The market consensus prices in a further four rate increases in the United States over the next 12 months, and the same number from the ECB. The central banks are therefore moving in step, and the interest-rate differential is not the decisive factor at present. The main reason for the euro’s weakness is the eurozone’s energy vulnerability amid the fuel crisis.
06
The yen remained under pressure despite a rate increase by the Bank of Japan. On September 18, the Bank of Japan raised its policy rate to 1.25%, but two Policy Board members dissented, which reinforced doubts about the pace of further tightening. After the decision, USD/JPY rose to around 158. At the same time, Tokyo and Washington again confirmed that they stand ready to resist excessive yen weakness.
From a technical perspective, the US dollar index (DXY) has risen to a resistance line at 102. If the dollar can break through that level, there is scope for a further 3–4% appreciation. This resistance has, however, held on several occasions in the past, so a break has not yet been confirmed. Until there is a convincing break of 102, we are inclined to the view that the dollar will remain in its current range and that the euro will start to strengthen again. In EUR/USD, 1.14 is acting as support and is still in place, and we consider an upward turn in the euro from the current level to be the more likely outcome.
US Dollar Index
The dollar index has risen to 102, which is still acting as resistance. Further dollar strength can be argued only after a break of this level.
Source: Bloomberg, Astero Falcon analytics.
Currencies: The Dollar at a Key Resistance Level
07
EUR ratio USD
Although EUR/USD is closing the month slightly above 1.13, this may prove to be a false break. For now, we are not convinced that the euro will weaken further, and we consider a return to the 1.14–1.18 range likely.
BTC price and 200-week moving average
Bitcoin has held above its 200-week moving average for the first time since the end of 2025. We consider this a strong signal that cryptocurrencies are moving into a bull market.
Source: Bloomberg, Astero Falcon analytics.
Alternative Investments: The Start of a Bull Cycle in Cryptocurrencies? In September, the US Senate was unable to advance the Clarity Act. A procedural vote ended 50–49, short of the 60 votes required to move the bill forward.
The cryptocurrency market did not, however, react to this negative outcome. A few days after the news that the Clarity Act had been postponed, cryptocurrencies posted a strong impulsive move and broke upwards out of a local consolidation. Even before the vote failed, the US Securities and Exchange Commission (SEC) had begun, on its own initiative, to shape a new regulatory architecture. This in effect creates an official channel for companies, lawyers, exchanges, investors and other participants who want to propose specific changes to the regulator.
The CLARITY Act remains potentially important, because only legislation can create a genuinely durable division of authority between the SEC and the CFTC. Firms in the industry can now also influence the specific SEC and CFTC rules, which may take effect sooner than the statute. The final shape of the regulatory model has not yet been settled.
08
From a technical standpoint, in the second half of September Bitcoin and Ether (ETH) rose above their 200-week moving average for the first time since the start of 2026. The “relative strength” of cryptocurrencies in September stands out: despite higher yields, a stronger dollar and no news on the Clarity Act, the total capitalisation of crypto assets has risen by more than 30% since August. We consider that the long-term low in the crypto market has already been established, and that the market is now showing the first green shoots of a bull market. We plan to use local pullbacks in price to build a long-term position.
Precious-metal prices remained under pressure throughout the month, above all because of a strong dollar and rising yields. On the record of the previous 25 years, September is the second-worst month of the year for precious metals, with an average result of -1.3% (only June is weaker, at -2.2%). From October, however, the strongest sixmonth period for investment in metals traditionally begins, and we consider that this seasonal pattern will hold this year as well.
Silver seasonality, average return by month
On the record of the previous 25 years, September was the second-worst month for silver. The period from October to March, by contrast, was the best for investment in silver.
Source: Bloomberg, Astero Falcon analytics.
Direct Investments: Market Dynamics Differ Across Funding Stages
09
According to a BCG report of September 21, the volume of mergers and acquisitions involving financial sponsors, for example private equity funds, rose by 11% from January to August, while the M&A market as a whole grew by 15%. In the broader M&A market, activity in smaller transactions remains below long-term averages. BCG notes that the readiness of assets for sale, and the valuation gap between buyers and sellers, are becoming increasingly significant constraints.
Entry valuations in venture investments differ by stage. A report by the law firm Wilson Sonsini, published on September 3, notes that the median pre-money valuation of seed-stage start-ups fell from $35 million in the first quarter of 2026 to $23 million in the second. Valuations in Series A rounds rose from $50 million to $80 million, Series B from $140 million to $290.5 million, and Series C and later rounds from $1.275 billion to $2.575 billion.
Citing PitchBook, BCG reports that at the end of June private equity portfolios held more than 33,500 unrealised companies, compared with around 32,500 at the end of 2025. Private-company valuations are recovering through stronger financial results, that is earnings, rather than through higher valuation multiples.
In strategic transactions linked to artificial intelligence (AI), the acquisition of new capabilities and the expansion of product lines predominate. According to a BCG study, these two motives accounted for 95% of strategic acquisitions from 2020 through August 2026.
Lincoln’s September report notes that the European Private Market Index rose by 0.9% in the second quarter and by 2.7% over the last twelve months. In the same quarter, the value of companies in the FTSE 250 and the STOXX 600 rose by 4.3% and 7.5% respectively. Lincoln attributes the rise in privatecompany values to operating performance offsetting a continued decline in multiples, whereas the rise in public markets was driven largely by multiple expansion. The sample covers more than 450 private companies, with median EBITDA of around €37 million. The figures therefore describe the change in the value of the companies themselves, not the net return of private equity funds.
Source: Bloomberg, Astero Falcon analytics.
Direct Investments: Market Dynamics Differ Across Funding Stages
10
Pre-money median valuations
In the second quarter of 2026, valuations of start-ups raising venture capital diverged by funding stage. The median seed-stage valuation fell to $23.0 million, while the median Series A valuation rose to $80.0 million. Artificial intelligence remains the key driver of higher valuations in large transactions at every stage.
Source: Bloomberg, Astero Falcon analytics.
September: A Correction in Risk Assets Amid Rising 11 Yields Fixed Income
September 2026
2026
Swiss Bond Index (SBI) AAA-BBB
-0,75%
-0,97%
Bloomberg Barclays Euro Aggregate Corporate TR
-1,54%
-1,42%
Bloomberg Barclays Pan-European High Yield TR
-1,84%
0,27%
Bloomberg Barclays US Corporate High Yield TR
-2,43%
0,20%
Bloomberg Barclays Sterling Corporate TR
-1,17%
-1,10%
Bloomberg Barclays China Aggregate TR
-2,90%
-0,08%
Bloomberg Barclays Asia USD High Yield TR
-1,30%
3,67%
Bloomberg Barclays Global High Yield TR
-1,84%
0,27%
JPM EMBI Global Total Return Index
-3,13%
-1,02%
Bloomberg Barclays Global-Aggregate TR
-2,90%
-0,08%
September 2026
2026
NASDAQ - 100 Index
3,83%
21,59%
S&P 500 INDEX
0,46%
13,66%
Dow Jones Industrial Average
-3,20%
8,19%
MSCI World Index
-1,03%
12,25%
MSCI Europe Index
-1,85%
10,87%
MSCI Emerging Markets Index
-0,84%
23,20%
SPI
-2,38%
7,85%
SMIM
-0,70%
5,92%
DAX
-3,97%
2,96%
FTSE 100 Index
-1,87%
9,56%
Hang Seng Index
-3,28%
-1,39%
Shanghai Shenzhen CSI 300 Index
-5,59%
-4,07%
Nikkei 225
1,22%
34,54%
Equities
Commodities
September 2026
2026
Gold
-6,24%
-3,68%
Silver
-9,23%
-15,67%
Copper
0,15%
16,22%
WTI
4,22%
55,66%
BRENT
13,37%
68,59%
Bloomberg Commodity Index
1,32%
33,81%
Currencies
September 2026
2026
EURCHF
0,93%
1,84%
CHFUSD
-3,14%
-5,03%
CHFGBP
-1,16%
-3,62%
EURUSD
-2,24%
-3,30%
EURGBP
-0,23%
-1,87%
GBPUSD
-2,01%
-1,47%
Source: Bloomberg, Astero Falcon analytics.
Disclaimer
12
This document has been prepared and issued by Astero Falcon (DIFC) Limited (“Astero Falcon”), a company incorporated in the Dubai International Financial Centre (“DIFC”). Astero Falcon is regulated by the Dubai Financial Services Authority (“DFSA”) under Firm Reference Number F010362.
This document is intended solely for Professional Clients and Market Counterparties, as defined in the DFSA Conduct of Business (“COB”) Module. It is not intended for Retail Clients and must not be distributed to, relied upon by, or acted upon by any Retail Client or any other Person who does not meet the applicable DFSA client-classification requirements.
The information contained in this document is provided for informational, analytical and general market-commentary purposes. The document may contain investment research, market analysis, opinions, estimates and forward-looking views prepared by Astero Falcon.
Nothing contained in this document constitutes:
• personalised investment advice or a personal recommendation to any recipient;
• an offer, solicitation or invitation to acquire, dispose of, subscribe for or otherwise transact in any Investment, Financial Product or Crypto Token;
• an offer to provide any Financial Service;
• legal, tax, accounting or other professional advice; or
• a representation that any particular investment strategy, transaction or financial product is appropriate or suitable for any particular recipient.
Any views, opinions, estimates, forecasts, projections, market expectations or other forward-looking statements contained in this document represent the judgment of Astero Falcon as at the date of publication, unless otherwise stated. They are based on information, assumptions and market conditions available at that time and may change without notice. Actual market developments or investment outcomes may differ materially from those expressed or implied.
Statements of fact are based on sources identified in the document or sources which Astero Falcon considers reliable. Statements concerning future market behaviour, valuation, expected performance or other prospective matters constitute opinions or estimates rather than statements of fact.
No representation or assurance is given that any forecast, estimate, projection, market view or expected outcome will be achieved.
References to historical prices, market performance, indices, statistical relationships or past trends are provided for information and illustration only. Past performance is not a reliable indicator of future performance. The value of investments and any income derived from them may rise or fall and investors may lose some or all of the capital invested.
This document has been prepared without regard to the individual investment objectives, financial circumstances, knowledge and experience, risk tolerance or particular requirements of any recipient. Recipients should make their own independent assessment of the information and, where appropriate, obtain independent financial, legal, tax and accounting advice before making an investment decision.
Investments and financial markets involve risks which may include:
• market risk;
• liquidity risk;
• credit and counterparty risk;
• currency and foreign-exchange risk;
• interest-rate risk;
• valuation risk;
• operational and technology risk;
• geopolitical, legal and regulatory risk; and
• the risk of partial or total loss of capital.
Digital Assets / Crypto Tokens
Any reference to Bitcoin, Ether, cryptocurrencies, digital assets, Crypto Tokens or blockchain-related assets is provided solely for market-analysis and research purposes.
Nothing in this document constitutes an offer, solicitation, personal recommendation or the provision by Astero Falcon of a Financial Service in relation to a Crypto Token. Nothing in this publication should be interpreted as a representation that Astero Falcon is authorised to provide Financial Services involving any particular Crypto Token.
Crypto Tokens and other digital assets may be highly speculative and may involve substantial risks, including extreme price volatility, liquidity risk, custody and cyber risk, technology and protocol risk, valuation uncertainty, market-abuse risk, legal and regulatory uncertainty and the risk of substantial or total loss.
Astero Falcon obtains information and market data from sources that it considers reliable, including third-party data providers and internal analysis. While reasonable care is taken in preparing this document, Astero Falcon does not guarantee the accuracy, completeness or timeliness of such information.
To the maximum extent permitted by applicable law and regulation, Astero Falcon accepts no responsibility for losses arising solely from reliance upon this document. Nothing in this document excludes, restricts or limits any duty or liability which Astero Falcon may have under applicable DIFC law or legislation administered by the DFSA and which may not lawfully be excluded, restricted or limited.
Astero Falcon, its Associates, employees, clients or portfolios managed or advised by Astero Falcon may from time to time have positions or other interests in Investments or markets referred to in this publication. Astero Falcon maintains policies and procedures designed to identify and manage actual and potential conflicts of interest. Any interest or conflict required to be disclosed under applicable DFSA requirements must be disclosed in or in connection with the relevant Investment Research.
This document may not be redistributed to any Retail Client. Any reproduction, redistribution or other use of this publication must comply with applicable law and regulation and, where required, is subject to the prior written consent of Astero Falcon.
© 2026 Astero Falcon (DIFC) Limited. All rights reserved.
Astero Falcon (DIFC) Limited Office 33, Level 7, Gate Village 10 Dubai International Financial Centre Dubai, United Arab Emirates
Regulated by the Dubai Financial Services Authority DFSA Firm Reference Number: F010362
Email: info@asterofalcon.com Website: www.asterofalcon.com
Chief Investment Officer: Elena Nefedova