Investors see 10-year Treasury yield peaking at 5.7%

Investors expect the 10-year US Treasury yield to peak at an average 5.7% over the coming year, according to Deutsche Bank’s Q3 2026 Global Markets Survey. Inflation concerns topped respondents’ explanations for the recent bond sell-off, even though their longer-term inflation forecasts barely moved.

The report, authored by Jim Reid, Head of Deutsche Bank Research Institute, and Camilla Siazon, Associate, Macro and Thematic at Deutsche Bank, draws on 460 responses gathered worldwide between 28 September and 1 October. It also found that 47% would choose US equities if they could hold only one asset for the next decade.

Asked to rank the forces behind rising Treasury yields, 30% placed inflation first. Fiscal fears led for 26%, while 20% chose stronger-than-expected US growth. A more hawkish Federal Reserve ranked first for 9%, followed by US government policy uncertainty at 6%.

Those answers contrasted with respondents’ inflation projections. Expected US inflation over the next five years averaged 2.9%, only marginally above the 2.8% recorded in June. The euro-area forecast remained unchanged at 2.4%.

Respondents nevertheless expected further pressure on Treasuries. Their average forecast for the peak ten-year yield over the next 12 months was 5.70%, compared with a recent intraday high of 5.22%. Some 44% put the peak from 5.4% to below 5.6%, while 21% expected 6% or more. Another 16% chose the range from 6.0% to below 6.2%.

Views on the US debt burden also favoured outcomes that avoid an abrupt fiscal reckoning. Some 40% ranked “muddling through indefinitely” as the most likely response, while 23% chose inflation and 20% stronger economic growth. Only 4% placed fiscal consolidation first, with default or restructuring lower still. Indeed, 84% placed default or restructuring last.

The average probability assigned to a US recession within 12 months was 24.7%, little changed from 24.5% in June and well below 42.7% in March 2025. Most estimates sat between 10% and 30%.

Brent crude was expected to end 2026 at an average $95.90 a barrel, with 68% forecasting a price below $100. Meanwhile, 82% put the chance of a US-Iran ceasefire or peace agreement before the 3 November midterm elections at 50% or less.

AI adoption continued to climb. Some 39% said they had used AI extensively for work during the previous three months, up from 18% in December 2025, while the proportion reporting no workplace use fell from 14% to 2%.

Expectations for employment became less negative. The share anticipating net job displacement during the next five years fell from 67% in March to 52%, although 55% still expected AI to displace more jobs than it creates beyond that period. Some 69% forecast at least a noticeable productivity effect within five years, rising to 90% over five to ten years.

Valuation concerns remained concentrated in technology and digital assets. US technology equities received a bubble-risk score of 7.1 out of ten, the Magnificent Seven scored 6.9 and Bitcoin rose from 5.7 in June to 6.4.

Even so, US equities dominated the ten-year asset choice. Non-US developed-market equities ranked a distant second at 12%, followed by emerging-market equities at 10%, gold at 9% and real estate at 8%. US Treasuries attracted 4%, while cash and Bitcoin each received 2%.

 

Ant and HSBC extend tokenised treasury into Middle East

Ant International and HSBC have completed real-time tokenised deposit pilots linking the United Arab Emirates with Asian markets, extending the payment company’s treasury infrastructure into the Middle East.

The companies tested two payment routes, the first of which involved real-time, dirham-denominated transfers within the UAE. The second covered cross-border US dollar payments initiated in the UAE and sent to international markets, including Hong Kong and Singapore.

Ant initiated the transactions through WhaleRTP, its blockchain-based treasury management platform, while HSBC executed them in real time through its Tokenised Deposit Service. The two companies designed the transaction workflow together. Ant is HSBC’s first Middle Eastern client to use the service.

The pilots address a practical constraint for international treasury teams: banking hours do not always overlap with the point at which cash needs to move. Tokenised deposits can give companies access to bank money around the clock, allowing them to transfer liquidity across entities and markets without waiting for the next conventional processing window.

Ant has used blockchain and tokenised deposits for treasury management since 2019 across financial centres including Hong Kong, Singapore, Europe and the US. More than 20 banks now support WhaleRTP, which handles real-time transfers in over 17 currencies. These include the US dollar, Hong Kong dollar and UAE dirham.

The Middle Eastern expansion is intended to support Ant’s regional operations and its Alipay+, Antom and WorldFirst businesses. It also broadens the geographic reach of a treasury model designed to move funds between operating markets as liquidity requirements change.

HSBC’s Tokenised Deposit Service is live in six markets: Hong Kong, Singapore, Luxembourg, the UK, the US and the UAE. It supports seven currencies, comprising the offshore renminbi, Hong Kong dollar, Singapore dollar, euro, sterling, US dollar and UAE dirham.

The service provides 24-hour access to liquidity across HSBC’s network while retaining the bank’s existing account infrastructure and controls. Ant can continue using its own treasury platform while transactions run through HSBC’s infrastructure and oversight. The completed transactions remain pilots, but they demonstrate how domestic and cross-border tokenised deposit payments could operate through the same treasury platform.

Kelvin Li, general manager of Platform Tech and senior vice-president at Ant International, said: “This marks an important milestone in our journey towards achieving real-time treasury management across the globe. With the support of regional bank partners such as HSBC, we aim to establish a global treasury hub in the Middle East in the near future to better support our global operations. We look forward to contributing to the development of the region's rapidly growing digital finance ecosystem.”

 

Global factory buying accelerates as supply pressures return

Global manufacturers increased their purchasing of raw materials and components in September as demand strengthened, although renewed shortages and higher transport costs added pressure heading into the fourth quarter.

Purchasing growth reached a four-month high and moved close to its 2026 peak, according to the GEP Global Supply Chain Volatility Index. The monthly index draws on responses from 27,000 businesses and tracks demand, shortages, transport costs, inventories and backlogs.

Buying accelerated across North America, Asia and Europe, led by the US, Germany, Taiwan and South Korea. GEP said the improvement pointed towards firmer fourth-quarter manufacturing output.

The stronger demand was accompanied by the first increase in material shortages since May. Oil and oil-based products accounted for much of the deterioration in availability as the energy crisis intensified. Global transportation costs also rose on average for the first time since April after oil prices climbed during September.

John Piatek, vice-president at GEP Consulting, said: “Manufacturers are buying more because demand is strengthening, but they’re doing so at a time when shortages and transportation costs are starting to rise again. For companies, that means the priority shifts from simply protecting inventory to securing supply and controlling costs. If demand continues to build through the fourth quarter, businesses that wait will face tighter availability and higher input costs.”

Asia recorded the highest regional index reading, rising from 1.24 in August to a three-month high of 1.49. Stronger purchasing by Asian factories coincided with tighter supply conditions.

North America increased from 0.87 to 1.13, its highest reading since June, as activity strengthened in US manufacturing.

Europe’s index moved in the opposite direction, falling from 1.27 to 0.66, its lowest level of disruption since March. The decline came despite stronger purchasing across the continent, including accelerated buying by German manufacturers. The broader index also captures shortages, inventory behaviour, transport and capacity pressures.

The UK reading dropped from 1.10 to 0.59 as manufacturers reduced the pace at which they were accumulating stocks. Reports of companies adding safety buffers also declined globally for a third successive month after peaking in June. The use of excess inventory buffers nevertheless remained historically high as procurement managers guarded against inflation and potential shortages.

Labour constraints provided some relief. Fewer businesses reported that staff shortages were causing order backlogs to rise, indicating greater workforce capacity across global supply chains.

Higher purchasing volumes and renewed scarcity could increase manufacturers’ near-term supplier outflows and raise the cash absorbed by inventory. More expensive oil and transport may add to those requirements even where disruption remains contained, leaving procurement and finance functions to balance stronger demand against the cost of securing supply.

 

UK investors pull £858m from equities as yields rise

UK investors withdrew a net £858m from equity funds in September as higher bond yields and continued uncertainty pushed more money towards fixed income and cash. The latest Calastone Fund Flow Index recorded equity outflows for the 15th month in the past 16. Withdrawals have reached £5.45bn since the beginning of 2026.

UK-focused funds remained at the centre of the selling, losing £708m during September. The category has now suffered outflows in 63 of the past 65 months, shedding a cumulative £47.7bn over that period.

Selling also spread across international strategies. North American equity funds lost £124m, their largest monthly outflow since November 2025, while investors withdrew £371m from Asian funds in their second-worst month on record. European, Japanese, Chinese and sector-focused equity funds all experienced net selling.

Global and emerging-market funds were the only exceptions among the reported equity categories. Global strategies attracted £410m, while emerging-market funds received £133m.

Edward Glyn, head of global markets at Calastone, said investors were becoming “very picky” as high equity valuations, rising bond yields and concerns about geopolitics and inflation changed their willingness to accept risk. He linked the emerging-market inflows to demand for exposure to economies and valuations that differ from the heavily owned US market.

Bond funds gained a net £655m during September, raising their inflows for the first nine months of the year to £3.53bn. High-yield funds accounted for £421m of the monthly total and remained the most popular fixed-income category over the past two years.

Over that period, investors added £3.17bn to high-yield funds, 46% of total bond inflows. Sovereign bond funds attracted £116m despite turbulence in government debt markets.

Glyn said rising energy prices, inflation concerns, strained government finances and competition from corporate borrowers had contributed to September’s bond-market upheaval. “The resulting higher yields mean losses for existing bondholders, but they also increase the income available to investors buying at today’s prices, making bonds more attractive to new money,” he said.

Money market funds attracted another £417m, their largest monthly inflow since November. Their appeal rested on the returns available from cash without investors assuming equity risk or exposure to changes in longer-term bond prices.

“Investors still want returns, but they are demanding more compensation for taking risk,” Glyn said. He also suggested that speculation about higher taxes in this month’s Budget may have encouraged some investors to realise equity gains before any policy changes.

 

Wero targets wider merchant acceptance through nexo standards

The European Payments Initiative has joined nexo standards as it prepares to extend Wero into physical stores across European markets during 2027. The membership is intended to help payment providers and acceptance technologies support Wero through common technical specifications, reducing the need to accommodate separate national systems and payment environments.

nexo standards develops open specifications and messaging protocols that allow payment acceptance systems to communicate through a shared framework based on ISO 20022. EPI will use its membership to follow the development of these standards for account-to-account payments and assess their use in Wero’s acceptance model.

Wero currently has 60 million users and is being developed as a pan-European alternative for consumer and merchant payments. Extending it into physical stores requires connections with the terminals, software and payment providers used by merchants across European markets.

Common specifications could simplify those connections and reduce the technical work needed to offer Wero alongside existing card and account-to-account options.

Martina Weimert, chief executive of EPI, said: “Europe’s payment ambitions need to translate into practical choices for consumers and businesses. For Wero, that means building a European solution that merchants can accept across different markets and payment environments and offered by all banks across the continent. Open standards and interoperability help create those conditions. Our membership with nexo standards reflects this approach and our ambition to bring greater European payment choice to everyday commerce.”

EPI demonstrated one potential route to acceptance at NRF Europe in Paris during September. The demonstration showed a Wero payment initiated by scanning a QR code on a terminal operating within a nexo-based acceptance environment.

That QR-based capability provides an early example of how Wero could work with existing merchant infrastructure. EPI plans to develop further use cases before beginning the payment method’s in-store rollout across markets in 2027.

Near-field communication integration is also planned over the longer term, which would allow Wero payments to be initiated through the tap-based process already familiar to consumers and merchants. The immediate work will focus on making account-to-account payments function consistently across the different technologies involved in European payment acceptance.

 

Swift names 15-member board for payments and technology strategy

Swift has appointed a 15-member Supervisory Board under a revised governance structure intended to oversee the cooperative’s management and its strategy for cross-border payments, tokenised assets and emerging technology.

Graeme Munro, managing director for Commercial & Investment Bank at J.P. Morgan, will chair the board. Its composition combines four independent directors with representatives from ten shareholder institutions operating across banking, payments, transaction services and securities.

The independent directors are Dilip Asbe, Burkhard Balz, Inge Boets and Rima Qureshi. The shareholder-affiliated members comprise Ahmed Abdelaal of Mashreq Bank, Arthur Ambrose of Citi, Francisco Aristeguieta of Scotiabank, Patrick Colle of BNP Paribas Securities Services and Manish Kohli of HSBC.

They are joined by Laura Mather of Société Générale, Mark Monaco of Bank of America, Noritoshi Murakami of MUFG Bank, Michael Spiegel of Standard Chartered Bank and Yu Sun of Bank of China (Hong Kong).

Together, the bank-affiliated directors represent institutions headquartered across Europe, North America, the Middle East and Asia. Four further seats are held by directors without a shareholder affiliation.

The board’s remit includes oversight of Swift’s blockchain-based ledger, which is being developed to support the exchange and interoperability of tokenised assets and round-the-clock movement of funds. It will also help determine which further use cases should be added as digital forms of value develop.

Other priorities include accelerating transaction services as cross-border payment times fall, along with preparing Swift’s infrastructure for developments in post-quantum technology and frontier artificial intelligence. Operational resilience, cybersecurity and the ability to process transactions securely at scale will remain part of the board’s oversight.

The Supervisory Board forms the upper tier of Swift’s new governance model. A Management Board chaired by chief executive Javier Pérez-Tasso will run the company, while a separate 25-member Swift Council will represent shareholders and users by providing customer and market input into strategy.

Swift said the structure follows governance principles used by systemically important financial infrastructures. The cooperative connects more than 12,500 users across over 200 markets, making decisions on interoperability, security and new payment infrastructure relevant across a broad section of the global financial system.

 

FIS launches agentic AI suite for cash forecasting and risk

FIS has launched an agentic AI suite that combines corporate finance data with external information to forecast cash flows and identify credit or liquidity risks. The Agentic Insights Suite is intended for finance, treasury and credit teams whose information is held across separate systems. It collects and reconciles data before analysing accounts, producing forecasts and recommending which risks should receive attention first.

The software acts as an analytical layer across receivables and treasury processes. Its initial release centres on a cash-flow forecasting module designed to project liquidity over configurable horizons.

The module uses machine learning and simulations to produce several possible cash outcomes. Finance teams can model how delayed customer receipts or faster-than-expected outflows would affect cash positions.

The system can draw internal information from enterprise resource planning, treasury and customer relationship management platforms. External inputs can include credit bureau information and public data.

FIS says the software cleans and connects these sources to create a consistent dataset for cash forecasting, credit analysis and account scoring. This is intended to reduce the manual reconciliation required when finance functions hold conflicting information about the same customer, payment or cash position.

Accounts can be scored in real time, with the system ranking potential risks and recommending subsequent actions. Users can question the data through a natural-language interface, while analysis and standardised reports are presented through Microsoft Power BI dashboards.

The suite will also connect with FIS’s existing receivables products, GETPAID and BillerIQ, and its Integrity and Quantum treasury platforms. Linking receivables and treasury data is intended to show how changes in customer payments could affect liquidity and days sales outstanding.

FIS says future releases will add payment anomaly detection and dispute forecasting, extending the suite into the identification of unusual transactions and potential receivables disputes.

 

Standard Chartered adds RLUSD custody as collateral plans advance

Standard Chartered has begun offering institutional custody for Ripple’s RLUSD stablecoin while developing a separate arrangement that could allow clients to use the asset as collateral on LMAX Group’s trading infrastructure. The custody service covers RLUSD issued on the XRP Ledger and is available to eligible clients through Standard Chartered’s Dubai International Financial Centre branch. The branch is regulated by the Dubai Financial Services Authority.

The bank’s custody role forms part of a wider collaboration with Ripple and LMAX intended to connect regulated asset safekeeping with institutional trading and collateral management. Under the proposed model, RLUSD could become eligible collateral for agreed LMAX products and services.

Clients would keep the underlying stablecoins in custody at Standard Chartered while their value was mirrored to LMAX. This would allow the collateral to support trading activity without requiring the RLUSD itself to be transferred to the venue.

The structure is intended to reduce the operational risks created when digital assets move between custodians and trading platforms. It could also help institutions manage counterparty exposure and use their holdings across trading activities without changing where those assets are safeguarded.

Waqar Chaudry, global head of digital assets within Standard Chartered’s securities and transaction services business, said institutional clients wanted to enter digital asset markets “without compromising on how their assets are safeguarded or how risk is managed”.

RLUSD is issued on the XRP Ledger, a public blockchain built to support financial transactions and settlement. Ripple, Standard Chartered and LMAX are coordinating the operating framework through which custody information and collateral values would be used across their respective systems.

The custody service is already available, but the collateral integration has not yet gone live. Its introduction remains dependent on final documentation, successful testing, applicable laws and regulations, internal approvals and readiness in each jurisdiction.

 

SAP embeds payments and AI agents into cloud ERP

SAP is entering the payments market with an embedded service for Cloud ERP while rolling out AI assistants that can carry out finance tasks within existing workflows. SAP Pay, powered by SAP-owned Tereina, will initiate and reconcile payments inside the ERP workflow when invoices become due. The design is intended to reduce payment file movement and reliance on external processing.

The company also announced the customer rollout of Joule Work, a natural-language interface through which employees can use SAP applications and selected third-party data. It is already used by 110,000 SAP employees, with the company reporting productivity gains of 20% across finance, human resources and procurement. A limited number of customers are testing it in their own environments.

Joule Assistants extend that interface into operational tasks. They can perform work within business processes using existing data, user permissions and audit trails, while customers determine how much autonomy each assistant receives.

Finance applications include automating parts of revenue recognition, corporate disclosures and trade compliance. SAP said early deployments of its International Trade Assistant had cut the work involved in trade classification by as much as 50%.

An Accounts Receivable Assistant can rank collection activity according to customer risk and business context, recommend the next action and help finance teams concentrate on higher-priority debts. Billing tools are also intended to flag potential errors before invoices reach customers.

The underlying Business AI Platform supports the development and governance of AI across SAP and third-party environments. Its Knowledge Graph maps more than seven million data fields, while Joule Studio allows companies to build or modify agents using a choice of over 70 AI models.

Governance tools include a central inventory of enterprise agents within SAP LeanIX, established user authorisations and auditable activity. SAP said its governance architecture has received ISO/IEC 42001 certification.