Central Bank Meetings Test Markets as Yields Rise and Earnings Bar Looms

US Treasuries rallied for a second week, pushing 10-year yields to 5% and 30-year to 5.33%, while equities fell as investors worry about earnings and growth amid central bank meetings and a busy Q3 reporting season. Bond investors are concerned about AI spending returns, with 78% of S&P 500 companies beating Q2 EPS estimates, setting a high bar. Markets now punish firms that merely clear expectations, and 36% of S&P 500 companies report this week, including Alphabet, Microsoft, and Amazon. Five major central banks meet this week, including the RBNZ, Fed, and ECB. Australia's September CPI on Wednesday is key, with markets pricing a 60% chance of an RBA hike on November 3. The RBNZ is fully expected to raise rates to 3.0%.