US core CPI rose 0.3% in October, above expectations, lifting Treasury yields and the dollar as markets reassessed the pace of Fed rate hikes in December.

The dollar index rose to about 102.9, its highest since April 2025, after hotter-than-expected US inflation strengthened expectations of a December Fed rate hike.

Markets will watch Reserve Bank of Australia and Bank of England rate decisions, the US midterm elections and US and Canadian jobs reports.

The Fed kept rates unchanged, but currencies diverged: Australian inflation supported the Aussie, while the RBNZ's hold weighed on the kiwi and a Bank of Canada hike lifted the loonie.

Forex markets are watching Australian CPI and the UK budget on Oct. 28, while widening French bond spreads have weighed on the euro.

RBA Deputy Governor Hunter says the oil price shock may last longer, while domestic inflation remains persistent—keeping energy costs and rate expectations in focus for the Australian dollar.

Asia-Pacific currencies traded in a narrow range on Oct. 26. The yen eased from above 157.10 per dollar, while the onshore yuan reached its strongest level since June 2022.

Goldman Sachs strategists say policy shifts in Japan have reduced the risk of a sharp yen decline as global yields rise, improving its appeal as a hedge for pro-cyclical portfolios.

USD/JPY fell back from 154.47 last week. Traders are watching support at 152.81 and resistance at 156.43, with 160.45 in focus if the pair breaks higher.

Asian technology and semiconductor stocks fell broadly, lifting the yen. AUD/JPY broke 110.37, while USD/JPY tests support near 156.36.

Euro-dollar trading holds near 1.12 as wider euro-area spreads, elevated energy prices and policy uncertainty weigh on the currency.

European stocks closed higher, led by a 1.35% gain in Germany's DAX, while France's 10-year yield reached its highest level since 2002.

Markets expect the PBOC to set the dollar-yuan midpoint at 6.6813 on Oct. 20. A stronger fix and a narrower gap with forecasts point to a softer brake on yuan gains, not a policy shift to unchecked appreciation.

US September CPI rose 3.7% and oil returned near $100 a barrel. USD/JPY briefly tested 159 before retreating, with markets focused on inflation and risk sentiment.

Sticky US core inflation and hawkish ECB comments have revived bets on further rate hikes this year. Markets are weighing the timing and scale of tightening on both sides of the Atlantic.

The US Treasury’s increase in debt repurchases heightens market concerns over the dollar and inflation, driving gold and Bitcoin prices higher as investors seek safe havens.

With the EU's MiCA regime fully effective, Europe's crypto market gains uniform rules, but Poland's political deadlock leaves over 2,000 crypto firms struggling amid compliance challenges.

In August 2026, US federal debt topped $40 trillion, hitting 124% of GDP. The rising debt burden poses significant implications for future stock market performance.

Rising inflation expectations and an uptick in AI-related bond issuances have intensified selling pressure in global bond markets, impacting yields and investor strategies.

Goldman Sachs highlights Japan's nearly $1 trillion forex reserves, backing further yen interventions. July’s $85 billion US-Japan coordinated action is largest since 2011. September BoJ rate decision eyed.

India's foreign exchange reserves surged by $6.1 billion to $682.3 billion as of July 24, driven by a foreign currency deposit scheme that attracted $40 billion in dollar inflows, mitigating capital outflow pressures.

The US dollar stayed resilient despite coordinated US-Japan currency intervention and falling oil prices. Re-priced Fed rate hike expectations and rising Treasury yields support the dollar, while sterling and the euro remain under pressure.

Bank of America reports that mechanical sell-off pressure on the South Korean won driven by stock index rebalancing has largely ended. As market pullbacks eliminate overweight positions, future capital flows will depend on the stability of VKOSPI.

Japan Cuts FY2026 GDP Growth Forecast to 0.9% Amid Rising Oil Prices and Inflation

Japan faces a triple crisis of historic debt, imported inflation, and currency weakness. Concerns over the government's 370-trillion-yen industrial plan are driving bond yields higher, leaving the Bank of Japan in a delicate balancing act.

Mideast tensions and persistent inflation risks push the DXY to 101.16, while South Korea's KOSPI circuit breaker drags the Won to 1507. The Yen eyes a potential reversal on GPIF repatriation talks.

Weighed down by declining productivity, diverging US-Canada monetary policies, and trade uncertainties, Canada's macroeconomic fundamentals remain under pressure. Despite short-covering risks from extreme bearish positioning, the CAD faces long-term

Former BOJ official Tsutomu Watanabe states that driven by cost-push inflation from the weakening yen, the Bank of Japan may accelerate rate hikes this year. A policy rate exceeding 2% could squeeze domestic fiscal space and corporate financing, whil

A Bank of America report reveals CME JPY short positions are nearing July 2024 highs, driven by foreign investors selling Japanese bonds and equities in June. While AI demand boosts exports, concerns over Japan's fiscal health and a lagging BOJ fuel

European stocks fell at Wednesday's open, with the Stoxx 600 down 0.62% as U.S. attacks on Iran boosted oil prices above $76. While automotive and aviation sectors faced pressure from rising energy costs, energy and defense stocks advanced on safe-ha