Top Overnight News

The 10-year Treasury yield rose to 5.33%, the highest since 2002, as global bonds grappled with stubborn inflation and warnings that rates may stay “higher for longer.” Brent climbed back above $100. UK long-term yields hit 6% for the first time in almost three decades. BBG

Washington is winning the War of Hormuz as Middle East oil exports approach pre-war levels, although the Pentagon is expending a lot of resources to guarantee supply and the global shortage of refined energy products is worsening. WaPo

The Trump administration has told Germany and France to draw down emergency diesel inventories to help to ease global fuel prices or face a potential US diesel export ban, said three people close to the discussions. The warning marks an escalation of pressure on Europe as US President Donald Trump considers a potential diesel export ban to bring down US fuel prices ahead of November's midterm elections. RTRS

Chinese fuel exporters have canceled some oil-product cargoes slated for export in October, prioritizing domestic supply during an extended period of upheaval in global energy markets. Shipments including gasoline and diesel have been affected, with the prompt spread for these fuels in Asia stretching higher as traders learned the news, indicating a tighter market. BBG

Factory activity across Europe and Asia expanded last month as demand, partly boosted by the global AI spending boom, remained ‌strong even as the energy price shock from the Iran war kept inflation elevated, surveys showed on Thursday. RTRS

Japan is aiming to speed up data center development with a $140bn investment scheme leveraging its powerful gas trading company in a bid to become the world’s largest AI infrastructure hub outside the US and China. FT

Minneapolis Federal Reserve President Neel Kashkari said price pressures remain elevated after the latest batch of inflation data released Wednesday. Kashkari’s comments come after the Fed’s preferred inflation measure, the personal consumption expenditures price index, rose by 3.4% over the past 12 months in August. Despite revisions to PCE lowering the year-over-year trend, economists project the central bank will largely stay committed to achieving price stability on a timely basis. WSJ

Powell will probably wind up staying at the Fed until Jan 2028. Politico

Tencent has signed its largest overseas lease deal with US cloud provider Oracle as the Chinese tech giant strives to catch up in an escalating AI race. The leading social media and gaming group in China this year agreed to a five-year lease across multiple Oracle data centers in south-east Asia, according to two people with knowledge of the matter. FT

US Senators Hawley (R) and Murphy (D) are planning to introduce AI liability legislation as a bipartisan effort to regulate AI: Axios

BofA (w/e 26th Sept) Total Card Spending +5.6% Y/Y (prev. +6.9%); notes that after a brief reversal last week, lower-income spending growth again outpaced higher income