观点

The policy rate was unchanged at 2.25% as universally expected

According to Eurostat's Flash estimate, the Euro area annual headline inflation averaged 3.26% in August (higher than our estimation of 3.20%), up from 2.94% in July.

We expect market pricing for Fed rate hikes to recede as confidence in continued disinflation increases

While the focus is now on the upcoming jobs report and then CPI release, the bar for the data to move the needle has been raised.

In more practical terms, he stated that “we must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed… otherwise, we have work to do.”

The stage looks increasingly set for another rate hike at next week's ECB meeting.

Franklin Templeton Fixed Income CIO Sonal Desai believes that he may be the most hawkish chair since Paul Volcker. Warsh stressed that the Fed can and will bring inflation back to 2%

If the Fed is serious about bringing inflation back to target, it will need to nudge the policy rate up.

Capurso said the risks were tilted towards a fourth increase being needed.

We still believe the doves prevail in September (aided by data), but it’s a very close call!

A positive employment surprise in the US could cement a September hike.

it is hard to see that the ECB would be willing to risk a recession to tackle what is still a textbook supply-side shock.

Elsewhere, ECB's Dolenc also reinforced expectations for a September hike as "we see that the inflation situation doesn't resolve itself."

Hike odds have risen, but not odds-on; Short duration nation.

Likely slower economic growth trends and disinflation in the US in the second half should support a gradual shift toward lower policy rates in 2027.

High and persistent inflation means the RBNZ is now on a tightening path, with another 25bp hike expected this week.

In contrast, BOE's Bailey suggested "we can watch this situation for the moment" due to subdued second-round effects and a softening labour market.

The ECB can legitimately hike rates in September, particularly against a backdrop of rising natural gas prices. But anything more than that, as my colleague Carsten wrote this week, would take it into restrictive territory without a compelling reason for doing so.

The jobs report is the big event of the week and will be a key determinant of whether the Fed hikes rates on 16 September.

The broad takeaway is that with the kind of growth we’re seeing in the interest sensitive sectors, the last thing that the Bank of Canada would wish to do would be to throw kerosene onto the economy by cutting rates

In Wednesday’s meeting, we expect the BoC to acknowledge both this strength and forward-looking risks-a balance that should leave interest rates unchanged.

but further escalation in tariffs is a real threat that could prompt a delay of BoC rate hikes we had expected in 2027, or worst, push the central bank to cut rates.

If that changes, the RBA may still need to hike rates again.

We expect Kazakhstan to cut its base rate by a cautious 25bp to 16.50% on Friday 4 September, provided August CPI, due on 31 August, falls into single digits from 10.2% YoY in July.

Warsh’s less-guided approach to monetary policy has increased policy uncertainty.

Cleveland Fed President Beth Hammack expressed similar concerns and reiterated her ongoing willingness to hike rates to bring price pressures back under control.

We continue to expect the Bank of Canada to keep interest rates unchanged through the remainder of 2026.

And here in Britain, I don’t think it’s going to be long before we’re talking about the first rate cut.

including solid 3.3% (annualized) GDP growth in Q2 and on-target core inflation prints since April.

If we are right, and growth continues to slow, then there is the prospect of 1-2 rate cuts in mid-2027.

We think the Fed appears comfortable keeping rates modestly restrictive while monitoring whether inflation is broadening and becoming embedded in expectations.

But uncertainty over the exact path of interest rates is likely to remain elevated given Warsh’s communication style, the ongoing war in the Middle East, and continued strength in AI investment.

However, we continue to lean towards the RBA remaining on hold.

Rising headline and perhaps core rates too can keep another 50-60bp of ECB tightening priced into money market curves and probably keep the euro supported.

Key rate hikes are a blunt tool for strengthening the krona and have undesirable side effects.

The benchmark 10-year yield dropped back to 4.77% early Thursday after an intraday high of 4.816%.

China Government Bonds (CGBs) are effective portfolio diversifiers, offering returns uncorrelated to the developed markets plagued by inflationary pressures and rising yields. We see room for a downtick along the longer end of the CGB yield curve, with additional price return potential coming from anticipated USD weakness.

We still like short-and medium-maturity government bonds for both income and as a portfolio diversifier

The US Treasury yield curve bear flattened Friday in reaction to the more hawkish than expected speech from Fed Chair Warsh. Yields eased slightly in early Monday trading in Asia, but the benchmark two-year yield is still some seven basis points higher than it was before Warsh’s speech, trading near the top of the range since late 2024 as the odds of a September 16 FOMC rate hike rose above 50%. The benchmark 10-year Treasury yield is some three basis points higher than before the speech at 4.71% as the Treasury market eyes the key 4.75% area that has marked the top of the range on multiple occasions over the last month.

bonds suffered on fears of fiscal slippage and higher supply.

The benchmark 10-year Treasury yield is some three basis points higher than before the speech at 4.71% as the Treasury market eyes the key 4.75% area that has marked the top of the range on multiple occasions over the last month.

yields have risen, amid fiscal and supply concerns, as well as shifting monetary policy expectations.

while a steady Fed policy should see yields on shorter-dated bonds move lower, benefiting quality bonds with short to medium maturities.

Fed Chairman Warsh’s speech today was hawkish:

The fixed income market may begin to function better again after years of low liquidity and very limited supply. This will help make the Swedish government securities market more attractive to foreign investors and provide room for the Swedish krona to appreciate. However, the positive flow effect is expected to be rather limited.

Growth momentum eased after a good start to the year, but GDP in major economies continued rising in Q2 at a decent pace.

India’s economy grew 7.8% YoY for 2Q26, comfortably beating market expectations of 7.1%, and the RBI’s 7.0% forecast, although growth moderated from a revised 8.6% in the previous quarter.

the production index remains in very strong growth territory at 58.3, historically consistent with GDP growth of close to 3%.

CommBank estimates hyperscaler and other AI capital spending will add about 0.5 percentage points to US economic growth in 2026.

Growth is expected to moderate from Q2’s strong pace but remain positive over the remainder of 2026.