To The Moon

This week, the dominant cross-asset pricing driver shifted from geopolitical risk premia to a U.S. rates shock. As Middle East supply disruption risks eased at the margin, crude oil retreated sharply from its mid-month high. Meanwhile, the 10-year U.S. Treasury yield jumped 30 basis points to 5.26%, its highest level since June 2007. Oil’s decline did little to ease pressure on long-end yields, suggesting that the latest rate surge was driven mainly by a widening term premium and mounting Treasury supply pressure. With elevated rates and tighter liquidity expectations weighing on markets, equities, industrial metals, and precious metals all came under broad pressure.

$黃金主連 2612(GCmain)$ $微黃金2612(MGC2612)$ $1盎司黃金2612(1OZ2612)$ $白銀主連 2612(SImain)$ $微白銀主連 2612(SILmain)$ $100盎司白銀主連 2612(SICmain)$ $WTI原油主連 2610(CLmain)$ $微型WTI原油主連 2610(MCLmain)$ $布油現金主連 2612(BZmain)$ $小原油主連 2610(QMmain)$ $COMEX銅主連 2612(HGmain)$ $鋁主連 2611(ALImain)$

As of the U.S. market close on October 6, 2026 (ET), key assets performed as follows this week:

Figure 1. Bar Chart of Asset Returns

In an environment of constantly shifting macro expectations, price action alone is no longer sufficient to identify the dominant cross-asset theme. Inventory changes provide a clearer read on physical supply and demand, while fund flows better reveal allocation preferences. We therefore assess the latest developments in U.S. equities, Treasuries, crude oil, copper, aluminum, gold, and silver through the dual lenses of inventories and flows.

Equity and Bond Outflows Accelerate as the 10-Year Yield Jump Drives Bear Steepening

Founded in 1940, the Investment Company Institute (ICI) is one of the leading associations representing the U.S. fund industry. Its coverage encompasses approximately 98% of assets held by U.S. funds registered under the Investment Company Act of 1940, and its flow data are widely regarded as an authoritative gauge of subscriptions and redemptions across U.S. mutual funds. The ICI also publishes long-running statistics on assets and flows for regulated funds in the United States and globally. Its consistent methodology and broad coverage make its data a standard reference for brokerages, research institutions, and financial media.

In the week ended September 30, U.S. equity mutual funds recorded net outflows of $37.13 billion—roughly 2.7 times the previous week’s figure—marking a fifth consecutive week of net redemptions. Domestic and international equity funds saw outflows of $31.56 billion and $5.57 billion, respectively. Net outflows from bond mutual funds also widened to $17.05 billion from $4.15 billion, including $10.38 billion from taxable bond funds and $6.67 billion from municipal bond funds. Heavy simultaneous redemptions from equity and bond funds point to a marked deterioration in risk appetite, with investors shifting more capital into money market funds and other cash-like instruments.

When ETFs are included, the outflow pressure eases substantially. Equity ETFs attracted $32.48 billion, offsetting approximately 87% of equity mutual fund redemptions, although equity products still recorded a net outflow on a combined basis. Bond ETFs took in $20.51 billion, more than offsetting mutual fund outflows and lifting aggregate bond-product flows to a net inflow of $3.46 billion. This suggests that investors have not exited fixed income wholesale, but are instead rotating from mutual funds into lower-cost, more liquid ETFs.

Meanwhile, the 10-year U.S. Treasury yield rose rapidly from 4.96% on September 22 to approximately 5.29% by September 30. The 10Y–3M spread widened from 80 basis points to as much as 109 basis points, marking a bear steepening of the curve. The sharp rise in long-end yields weighed on the valuation of outstanding bonds, dovetailing with both the acceleration in bond mutual fund redemptions and the migration into ETFs.

$標普500ETF(SPY)$ $標普500(.SPX)$ $SP500指數主連 2606(ESmain)$ $微型SP500指數主連 2606(MESmain)$ $微型SP500指數2606(MES2606)$ $道瓊斯指數主連 2606(YMmain)$ $微型道瓊斯指數主連 2606(MYMmain)$ $道瓊斯(.DJI)$ $道瓊斯ETF(DIA)$ $納斯達克100指數(NDX)$ $NQ100指數主連 2606(NQmain)$ $納斯達克(.IXIC)$ $納指100ETF(QQQ)$ $微型NQ100指數主連 2606(MNQmain)$ $微型10年美債收益率主連 2605(10Ymain)$ $10年美債主連 2606(ZNmain)$

Figure 2. U.S. Fund Net Flows—Equity and Bond Funds (Source: ICI)

As of October 6 (ET), the 10-year and 3-month U.S. Treasury yields stood at 5.27% and 4.21%, respectively, putting the term spread at 106 basis points—5 basis points wider than on September 29. The yield curve continued to steepen, although at a notably slower pace than in the previous week. The 10-year yield briefly touched 5.31%, its highest level since June 2007, while the 30-year yield rose to 5.64%, widening the 10s30s spread to 37 basis points. This indicates that upward pressure on yields became increasingly pronounced further out the curve.

This week’s curve move was characterized by cooling front-end rate expectations and persistently elevated long-end yields. The 3-month/1-month Treasury bill spread narrowed from 21 basis points to 15 basis points, suggesting that expectations for further policy-rate increases had eased. Meanwhile, oil prices fell markedly from their mid-September high, yet long-end yields did not follow them lower. The latest rise in long-term rates is therefore difficult to attribute entirely to inflation expectations and more likely reflects a higher term premium and mounting Treasury supply pressure.

Viewed alongside fund-flow data, the rapid rise in long-end yields since mid-September has weighed on the valuation of outstanding bonds and may have intensified redemptions from bond mutual funds and the rotation into ETFs. The upward momentum in long-end rates has recently begun to ease. If yields stabilize further, redemption pressure on bond funds could moderate at the margin.

$標普500ETF(SPY)$ $標普500(.SPX)$ $納斯達克(.IXIC)$ $納指100ETF(QQQ)$ $納指三倍做多ETF(TQQQ)$

Figure 3. US 10 Year and 3 Month Treasury Yields (Source: US Treasury)

Key Asset Inventory Update

1. Crude Oil: Inventory Builds Continue at a Slower Pace as the Cushing Deficit Narrows and Market Tightness Eases Further

EIA data show that US commercial crude inventories excluding the SPR rose to 427.3 million barrels in the week ended September 25, 2026. Inventories increased by 920,000 barrels from the previous week and stood 1.8% above their five year average. Cushing inventories rose by 550,000 barrels to 24.3 million barrels but remained 5.6% below their five year average. Both recorded a second consecutive weekly build, although the increases were much smaller than in the previous week. This suggests that inventory distortions caused by the temporary decline in exports are fading. The data remain insufficient to confirm a sustained surplus.

Growth in Cushing inventories from a year earlier accelerated from 0.04% to 3.55%, while growth from two years earlier slowed from 4.03% to 2.68%. This indicates that inventories are moving back toward their two year norm and structural tightness has eased significantly. Commercial crude inventories were 2.59% above last year and 2.49% above the level two years ago. Both gaps narrowed slightly from the previous week, pointing to weaker inventory growth.

Cushing accounted for about 60% of this week’s increase in commercial inventories, down from roughly 77% in the previous week. This indicates that inventory growth at the delivery hub is losing momentum. Overall, the inventory build has yet to reverse, although the pace has slowed markedly. As the Cushing deficit continues to narrow, the structural tightness that previously supported front month premiums is fading further.

$WTI原油主連 2610(CLmain)$ $小原油主連 2610(QMmain)$ $美國原油ETF(USO)$$WTI原油主連 2607(CLmain)$ $小原油主連 2607(QMmain)$ $微型WTI原油主連 2607(MCLmain)$

Figure 4. US Commercial Crude Oil Inventories (Five Year Range)

Figure 5. Cushing Crude Oil Inventories (Five Year Range)

2.Copper: COMEX Inventories Reach Another Record as Total Stocks Across the Three Exchanges Continue to Fall, Widening Regional Divergence

As of September 29, 2026, COMEX copper inventories rose to 774,200 short tons, or about 702,400 tonnes. This represented a weekly increase of 5,603 short tons, or roughly 5,083 tonnes, and marked another record for the sample period. Inventories have risen 23.4% since mid May. The average daily increase accelerated to about 800 short tons over the latest week from 72 short tons in the previous week. This may reflect the continued arrival of cargoes previously delayed in transit.

In contrast, LME copper inventories fell 2.54% from their September 16 peak to 249,400 tonnes. SHFE inventories dropped 70.9% from their mid August peak to 7,100 tonnes, including a 36.3% decline in the latest week. The pace of destocking was therefore much faster at SHFE than at LME. Meanwhile, the COMEX increase offset only 71.5% of the combined decline at LME and SHFE. Total visible inventories across the three exchanges still fell by about 2,029 tonnes to 958,800 tonnes.

Overall, the regional divergence between COMEX inventory builds and LME and SHFE drawdowns continues. COMEX now accounts for 73.3% of total inventories across the three exchanges. Although its latest build offset most of the decline elsewhere, aggregate inventories remain on a gradual downward trend. A synchronized and substantial drawdown across major global exchanges has yet to emerge.

$COMEX銅主連 2612(HGmain)$ $微型銅主連 2612(MHGmain)$ $迷你銅主連 2612(QCmain)$

Figure 6. COMEX Copper Inventories (Short Tons; Source: Wind)

Figure 7. Shanghai Copper Inventories (Tonnes; Source: Wind)

Figure 8. LME Copper Inventories (Tonnes; Source: Wind)

3. Aluminum: LME Inventories Hover Near Five Year Lows as SHFE Destocking Accelerates; London Still Dominates Visible Stocks

As of September 29, LME aluminum inventories stood at 241,400 tonnes. They remained unchanged for six consecutive trading sessions, fell by only 750 tonnes from the previous week and were 33.5% below their yearly peak in early May. The longer term destocking trend remains intact, although movements in registered warrants have slowed markedly. This suggests that inventories have stabilized at low levels after a sustained decline. It does not indicate that physical storage has reached its minimum operating level.

LME inventories were 52.8% below the same period in 2025 and lower than every reading recorded in 2024 and 2025. They ranked around the 0.5th percentile since September 2021, continuing to provide structural support for nearby spreads in London. Meanwhile, SHFE aluminum inventories fell 31.3% over the week to 2,944 tonnes, indicating faster destocking. COMEX inventories stood at only 1,679 tonnes and had little impact on total visible stocks.

Combined aluminum inventories across the three exchanges totaled about 246,000 tonnes, with LME accounting for 98.1%. The current low inventory pricing thesis is therefore driven mainly by LME stocks. SHFE and COMEX inventories remain too small to materially change the broader supply and demand outlook.

$ALUMINUM FUTURES - main 2612(ALImain)$

Figure 9. COMEX Aluminum Inventories (Metric Tons; Source: Wind)

Figure 10. Shanghai Aluminum Inventories (Tonnes; Source: Wind)

Figure 11. LME Aluminum Inventories (Tonnes; Source: Wind)

4. Precious Metals: Gold and Silver Inventories Fall Sharply from Yearly Peaks as Noncommercial Longs Decline for a Sixth Week; Silver Positioning Has Cooled Further

As of September 29, 2026, COMEX gold and silver inventories stood at 23.4 million and 336 million ounces, respectively. They were 35.7% and 25.3% below their yearly peaks and 41.5% and 36.6% lower than a year earlier. Meanwhile, CFTC noncommercial long positions declined for a sixth consecutive week. Gold and silver longs fell by a cumulative 9.9% and 11.6% over the six weeks, indicating a continued decline in speculative buying appetite. Gold positioning remains neutral to low by historical standards, while silver has fallen to an extremely low percentile within the sample. This points to a much deeper unwind in silver positioning.

$黃金主連 2612(GCmain)$ $微黃金2612(MGC2612)$ $1盎司黄金主连 2612(1OZmain)$ $白銀主連 2612(SImain)$ $白銀主連 2612(SImain)$ $100盎司白银主连 2612(SICmain)$

Figure 12. COMEX Gold Inventories (Troy Ounces)

Figure 13. COMEX Silver Inventories (Troy Ounces)

Noncommercial long positions in gold fell to 249,700 contracts, down 27,400 from their late August peak. However, they remained 24.4% above their yearly low and ranked around the 36.6th percentile since September 2021. The latest reduction appears to reflect profit taking after the previous rally and a normalization of positioning, with little evidence of panic selling.

Figure 14. COMEX Gold Noncommercial Long and Short Positions (Contracts)

Noncommercial long positions in silver fell to 33,500 contracts, down 11.6% over six weeks and 52.2% from a year earlier. They ranked around the 4.5th percentile within the sample and stood only 7.6% above their yearly low. Compared with gold, crowding among silver longs has declined significantly, indicating a more advanced positioning adjustment. The scope for further reductions appears relatively limited. However, a break below historical positioning lows could still amplify short term price volatility.

Figure 15. COMEX Silver Noncommercial Long and Short Positions (Contracts)

Follow the Money, Take Stock of Inventories

Overall, inventory trends continued to diverge across regions and commodities this week. US commercial crude inventories were 1.8% above their five year average, while the Cushing inventory deficit was largely eliminated. Combined copper inventories across the three major exchanges retreated from their peak, but COMEX increased its share to 73.3%, widening the regional imbalance. LME aluminum inventories remained flat at low levels, while SHFE destocking accelerated. Low inventory support therefore remained concentrated in London. COMEX gold and silver inventories declined sharply, although long positions fell faster, weakening the marginal price support from inventories. Equity mutual funds recorded net outflows for a fifth consecutive week. Bond mutual funds also posted outflows, but bond products returned to net inflows after including ETFs. This indicates a shift from mutual funds to lower cost ETFs, with little evidence of a broad exit from the bond market. The 10 year US Treasury yield rose 30 basis points to 5.26%, its highest level since June 2007, becoming the main headwind for major asset classes. WTI crude, silver and aluminum recorded the largest declines, while equities proved relatively resilient.

Looking ahead, Treasury supply and the term premium will continue to drive long term yields. If yields remain elevated, redemption pressure on bond funds may persist. Oil’s geopolitical premium continues to unwind, although low inventories and a tight supply and demand balance should limit the downside. Copper faces risks from elevated COMEX inventories returning to global markets and triggering price repricing. Aluminum’s low inventory support remains confined to London and is insufficient to support a global shortage trade. Long positioning in precious metals has cooled significantly. Silver has limited room for further reductions, but weak industrial demand and thinner liquidity could keep its short term volatility above that of gold.

What will next week bring? We will see.