Global daily my word is my bond

Marketing communication 12 October 2026

My Word is My Bond Global Daily

RaboResearch Market comment Global Economics & Markets US and European equity indices were firmly in the black on Friday as the recent run up in bond knowledge.rabobank.com yields took a breather. The S&P500 closed 46 points higher at 7811 with strong gains across the real estate, consumer discretionary, healthcare and financial sectors. US 10-year yields were just Benjamin Picton over 1bp higher on the day, but down by almost 7bps over the course of the week with most of Senior Market Strategist the decline in yields arriving on Thursday.

The yield on French 10-year bonds fell by 4.2bps to close the week slightly lower. That helped to propel the CAC40 to a 0.95% gain on Friday, with Arcelor Mittal, Capgemini, L’Oreal, Hermes, and Renault among the most prolific gainers. Renault shares got a boost from news that the European Union will enact a 350,000 quota against imports of Chinese hybrid and plug-in hybrid vehicles, above which much steeper tariffs will kick in.

For context, Chinese exports of hybrid cars into the European market have risen from approximately 300,000 in 2025 to an estimated 800,000 in 2026 according to the Financial Times. EU Trade Commissioner Maros Sefcovic expects the new safeguard measure to reduce Chinese imports by more than 50%. Importantly, the measures were agreed bilaterally with Beijing (thereby minimising risk of retaliation) and do not require any evidence of market abuse to be enacted.

Politico reported over the weekend that Germany would like Britain to raise tariffs on Chinese electric vehicles in exchange for preferential access to the European market amid a lingering sense on the continent that Britain should not be allowed to cherry-pick the benefits of EU membership. A desire to make Britons feel the consequences of emphasising their own sovereignty above economic access in 2016 is particularly acute in France, where temptations toward nationalistic chest-thumping are perhaps encouraged by centuries of rivalry with Britain and the context of an impending Presidential election where populist candidates are expected to do well.

The German quid-pro-quo for Britain sounds eerily reminiscent of the deal offered to Canada by the United States, whereby a common external tariff vis-à-vis China seems to have been the price of admission for Canada to secure the most favourable terms of access to the US market of any country. There was plenty of nationalistic chest-thumping (or raising of elbows) in that case, too, but the Trump administration saw that arrangement as necessary to prevent China from back- dooring goods into the American market via Canadian ports. In Britain’s case, the move seems to be more about signalling solidarity since the fact that the steering wheel is on the wrong side of the car already acts as a trade barrier of sorts preventing Chinese hybrids from flowing through the UK into Europe in large numbers.

Canada famously spurned the United States’ offer so it could maintain full sovereignty over trade decisions, but this has come at a cost for Canadian exporters who had typically sent approximately two thirds of their products into the US market. Employment figures released by Statistics Canada last week confirmed that the Canadian economy shed 68,300 jobs in September, following on from a 41,700 decline in employment in August. The unemployment rate rose from 6.4% to 6.5% despite a decline in workforce participation. The Canadian economy likely would have been in even worse shape had the wars in the Middle East and Eastern Europe not boosted demand for Canadian potash and energy products.

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While the EU’s new protectionist measures vis-à-vis Chinese hybrid electric vehicles hold sectoral significance, they miss the structural problem of large and growing imbalances driven in large part by Chinese overproduction amid weak domestic demand. Unsurprisingly, captains of European industry from other sectors (notably, chemicals) are already agitating for similarly robust protectionist measures to be enacted against…