Australia’s central bank raised its benchmark cash rate by 25 basis points to 4.85% on Tuesday, the highest level since November 2008. It was the fifth increase this year, decided by six votes to three. Inflation rose to 4.3% in September, up from 4% in August. The central bank now expects inflation to stay elevated through much of 2027 and return to its 2% to 3% target range only in late 2027, three quarters later than previously forecast.
South Korean President Lee Jae Myung unveiled the country’s largest ever budget on Monday, with total spending for 2027 rising 12.8% to 820.9 trillion won. It includes 21.3 trillion won for semiconductors, physical artificial intelligence (AI) and AI data centers, nearly double the 2026 level, and 4.7 trillion won for a sovereign AI model. Defense spending rises 8.2% to 73.3 trillion won. Exports reached a record $115.3 billion in October, up 93.7% from a year earlier.
Oil prices fell on Monday by the most in months after the United States and Iran signalled openness to negotiations aimed at ending the conflict that has disrupted Middle East energy supply for months. West Texas Intermediate futures dropped almost 7% to about $97 per barrel, while Brent fell 6.5% to $106. European gas futures declined more than 9%, the largest drop since July. Heating oil and gasoline contracts also fell.
The 6M Euribor increased with 2 basis points to 2.99% compared to previous business day. The 10Y Swap decreased with 4 basis points to 3.40% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
US equities face renewed volatility after the S&P 500 suffered its biggest drop since June and the Nasdaq 100 recorded its worst month since 2025. Technology shares led the sell off amid concerns over AI spending, while the VIX reached its highest intraday level since April. Investors are now focused on upcoming earnings and US midterm elections.
Dutch tax policy remains uncertain as the government struggles to secure parliamentary support ahead of a mid-November deadline for 2027 rates. Reform of the wealth tax could cost €18bn through 2040, with financing still unresolved. Delaying the new system beyond 2028 could allow the wealth tax reform and broader tax package to be separated.
A record $6.3bn crypto theft has shaken digital asset markets, highlighting renewed security and liquidity risks across the sector. Around 90% of the stolen assets have already been replaced, funded through reserves, insurance funds and corporate resources. Withdrawals have resumed while the remaining assets are being replenished.
The 6M Euribor increased with 1 basis point to 2.97% compared to previous business day. The 10Y Swap decreased with 2 basis points to 3.44% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The Federal Reserve kept its policy rate unchanged at 3.75% to 4.00%, despite two policymakers supporting an immediate increase. Persistent inflation and resilient economic activity kept the outlook restrictive, with markets pricing an approximately 80% probability of a December rate hike and expecting further tightening in 2027. The decision pushed the 10-year Treasury yield to around 5.02%, maintaining pressure on borrowing costs and financial markets.
The European Central Bank kept its deposit rate unchanged at 2.5%, balancing persistent inflationary pressures against weaker economic growth. Eurozone inflation reached 3.8%, its highest level since September 2023, while rising sovereign borrowing costs have added pressure across European markets. Investors currently assign a roughly 67% probability to another ECB rate increase in December.
US technology stocks came under sharp pressure as investors questioned whether rapidly increasing AI investment can generate sufficient returns, contributing to a 1.5% decline in the Nasdaq. Alphabet lost around $500 billion in market value in a single session after quarterly AI-related capital expenditure exceeded $50 billion and free cash flow turned negative. The sell-off reflects increasing investor scrutiny of the balance between AI-driven growth, rising financing requirements and cash generation.
The 6M Euribor decreased with 3 basis points to 2.96% compared to previous business day. The 10Y Swap decreased with 1 basis point to 3.46% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The UK government introduced support to cushion households from higher energy costs, including a £100 payment for around 20 million households and an extended fuel-duty freeze. Taxes on banks, gambling, savings and landlords will help fund the measures. Growth is projected at 1.2% in 2026 but only 1.0% in 2027. Fiscal headroom fell to £15 billion, while the government aims to eliminate the current budget deficit within three years.
Global central banks face difficult policy decisions as inflationary pressures from the Middle East conflict combine with rising sovereign borrowing costs. The Federal Reserve has kept rates unchanged, markets assign a 78% probability to at least a 25-basis-point increase in December. Canada raised rates with 25 basis points, while New Zealand unexpectedly maintained its policy rate at 2.75%.
The US goods trade deficit widened unexpectedly by 2.1% to $134.9 billion in September, exceeding economists’ $130.2 billion forecast. Imports increased by $8.1 billion to $344.1 billion, while exports rose by $5.3 billion to $209.2 billion. Trade has not contributed to gross domestic product growth for three consecutive quarters. Economists expect third-quarter growth of 3.2% annualised, supported primarily by artificial intelligence investment and consumer spending.
The 6M Euribor increased with 1 basis point to 2.99% compared to previous business day. The 10Y Swap increased with 1 basis point to 3.47% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Trump reiterated that the Iran war will end “whenever I want it to,” insisting on a guarantee that Tehran will never develop a nuclear weapon as a condition for any deal, while US Central Command estimates the conflict has now cost 47 billion dollars, up around 3 billion from previous figures. The war is costing American families an average of 2,000 dollars each, according to Moody’s Analytics, split between higher energy costs, interest rate pressures and increased military spending. The economic toll is weighing on Trump’s approval rating, which stands at 32% ahead of the 3 November midterm elections, with reports emerging that US and Israeli militaries have drawn up plans for intensified strikes on Iran after the vote.
The dollar’s safe-haven status is being tested as record foreign inflows into US equities and hyperscaler bonds have transformed the currency into an increasingly risk-sensitive asset tied to the AI trade. When AI valuations came under pressure last week, haven flows favoured the yen and Swiss franc over the dollar, with analysts at Nomura warning that if the AI trade unwinds “it’s not as clear the dollar benefits in the same way it would have done in the past.” A sustained reversal could hit the dollar on three fronts simultaneously: weaker growth forcing Fed rate cuts and fading institutional demand for US corporate bonds and equities.
Rising sovereign yields and surging bond issuance by US hyperscalers are pushing up European corporate borrowing costs, with investment-grade yields climbing 30 basis points to 4.4% since September and high-yield costs rising 90 basis points to 7%, according to Goldman Sachs. Around half of Stoxx 600 debt could be affected relatively quickly, as one quarter matures within two years and a further quarter carries floating rates, with interest expense already having risen from 1.25% to 1.85% of sales since 2022, cutting earnings by more than 5%. Goldman does not foresee a systemic credit event but warns that companies with weak cash generation and near-term refinancing needs face growing pressure, as European earnings growth is expected to slow to below 10% next year from around 20% in 2026.
The 6M Euribor decreased with 3 basis points to 2.98% compared to previous business day. The 10Y Swap is unchanged at 3.46% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Chinese industrial profits rose 14.4% in September from a year earlier, up from 4.2% in August and the fastest pace in three months. Higher oil prices and rising costs of artificial intelligence (AI) hardware lifted factory-gate prices by 5%, the fastest since 2022. Gains remain concentrated in a few sectors, as energy and AI boost electronics and mining, while weak domestic demand weighs on other industries. Chinese stocks have lost $2.4 trillion since their May peak.
Japanese Finance Minister Satsuki Katayama said the government stands ready to take decisive action in the currency market if needed, as the yen remains persistently weak. The yen fell to 157.73 against the dollar on Tuesday, slipping from last week’s one-month high. The Bank of Japan is expected to hold rates steady on Friday while signalling further hikes to prevent inflation overshooting its 2% target. Japan and the US carried out a rare joint yen-buying intervention on 31 July.
Citigroup and BCA Research downgraded Brazilian assets after Lula da Silva’s election victory, citing reduced prospects for fiscal discipline and structural reforms. Brazilian markets plunged on Monday, with the Brazilian real falling more than 11% against the US dollar and the Bovespa index dropping 13.9%, its biggest one-day decline since March 2020. Citi closed its overweight equities call and long real position, while BCA cut Brazilian equities, local-currency bonds and sovereign credit to underweight.
The 6M Euribor decreased with 1 basis point to 3.01% compared to previous business day. The 10Y Swap is unchanged at 3.46% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
French government bonds came under renewed pressure as the 10-year yield climbed above 5% and the spread over German Bunds widened to 178 basis points, its highest level since the 2011 eurozone debt crisis. Concerns over France’s public finances and political uncertainty are increasingly affecting wider European debt markets, while investors now price in almost three ECB rate hikes by late 2027.
US technology stocks fell sharply as investors questioned the sustainability and financing requirements of the AI investment boom, with the Nasdaq dropping 2.6% and recording its largest daily decline since June. The broader S&P 500 fell 1.2%, while elevated oil prices and resilient labour market data reinforced expectations of another Federal Reserve rate increase before year-end.
The British pound strengthened as higher-than-expected inflation reinforced expectations of further monetary tightening, with markets pricing in at least three 25-basis-point Bank of England rate hikes by April. Sterling rose to around $1.34 and outperformed most European currencies as investors shifted capital away from eurozone assets amid growing fiscal concerns, particularly in France.
The 6M Euribor increased with 1 basis point to 3.03% compared to previous business day. The 10Y Swap decreased with 6 basis points to 3.47% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Euro-area government bond yields increased as French borrowing costs reached their highest level since 2002. France’s 10-year yield touched 5%, having risen more than 20 basis points during the week, while its spread over German Bunds reached around 150 basis points. French fiscal and political concerns drove much of the pressure, while Italian bonds performed comparatively better. German 10-year yields rose to 3.428%, with higher oil prices adding pressure across European fixed-income markets.
Sterling strengthened against both the euro and dollar after September inflation reached 3.5%, strengthening expectations of a Bank of England rate increase in November. Markets were nearly fully pricing a 25-basis-point hike, with four increases expected by mid-2027. The pound reached its strongest level against the euro in 17 months, while investors also focused on the upcoming UK budget and whether fiscal plans would maintain credibility amid higher borrowing and energy costs.
Japan’s economy is approaching a transition from import-cost-driven price increases towards wage-driven inflation. The government plans temporary consumption-tax relief on food and household payments to cushion higher living costs, while arguing its fiscal measures can expand supply capacity without accelerating inflation. The Bank of Japan raised its policy rate to 1.25% in September as energy costs, strong global demand and a weak yen increased underlying inflation risks.
The 6M Euribor increased with 3 basis points to 3.02% compared to previous business day. The 10Y Swap increased with 2 basis points to 3.53% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The Federal Reserve faces a difficult balancing act as the AI boom drives inflation while remaining largely immune to higher interest rates, leaving smaller businesses, consumers and credit-dependent sectors to bear the brunt of any further tightening. Fed Chair Warsh acknowledged AI investment as a price “shock” at the IMF meeting in Thailand, while policymakers debate how to cool inflation without significantly damaging the labour market, where unemployment has stayed in a narrow 4.0% to 4.3% range for over two years. The Fed meets on 27 to 28 October and is expected to hold rates at 3.75% to 4.00%, though further hikes remain on the table with AI firms set to invest roughly 1 trillion dollars next year, equivalent to around 3% of GDP.
Australian data centre operator NextDC saw its shares plunge nearly 40% after slashing its fiscal 2027 revenue guidance from up to 640 million Australian dollars to a maximum of 500 million, following power supply delays at its Melbourne facility caused by community opposition to infrastructure upgrades. Electricity distributor Jemena suspended work on the site citing safety concerns and lack of local council consent, with resumption not expected before February 2027. Citi warned the earnings impact could extend beyond 2027, as the case underscores the growing risk that community resistance poses to data centre operators worldwide.
Japan’s exports grew 16.7% year on year in September, sharply missing the 20.1% expected by analysts and marking a second consecutive month of slowing growth after a near four-year high in July. Semiconductor exports remained a bright spot, surging 49.4%, while shipments to the US climbed 22.9% though exports to China, Japan’s largest trading partner, rose a more modest 8.6%. Imports of petroleum jumped 51.1% in value, with US crude shipments surging nearly 820% as Middle East supply disruptions from the Iran war continue to redirect trade flows.
The 6M Euribor increased with 2 basis points to 2.99% compared to previous business day. The 10Y Swap decreased with 5 basis points to 3.51% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
India’s Finance Minister Nirmala Sitharaman said the high liquidity of India’s equity market has made it easier for foreign portfolio investors to exit, though economic fundamentals remain sound. Benchmark indexes have fallen nearly 12% since January, and foreign investors have sold over $33 billion of Indian equities this year. Sitharaman flagged capital flowing toward artificial intelligence and the United States as a concern. India’s weight in the MSCI Asia Pacific ex-Japan index has dropped from 19% to 10%.
China’s economy grew faster than expected in the third quarter, with gross domestic product 4.5% higher than a year earlier, up from 4.3% in the second quarter. Growth over the first nine months reached 4.6%, bringing the government’s 4.5% to 5% target back within reach. Exports, boosted by global demand for chips and artificial intelligence data centre equipment, drove growth. Domestic demand remains weak: retail sales rose only 1.1% and property investment fell 20.6%.
Japan will invest up to $21 billion in two GlobalFoundries chip factories in New York state under its $550 billion investment pledge to the United States, agreed in return for lower tariffs. The American president selects the projects. Experts say the investment will do little to revive Japan’s chip industry or strengthen supply chain resilience. Financing relies on bank loans, while Japan has the highest debt to gross domestic product ratio in the developed world.
The 6M Euribor increased with 2 basis points to 2.97% compared to previous business day. The 10Y Swap increased with 2 basis points to 3.56% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
