Market Information Wednesday 21 October 2026

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.