The US bond market was in focus again this week. The beat in the US ISM data midweek kept the pressure on US bonds and sent US 10-year yields moving back to 4.35%, USDJPY higher, and gold lower. The Reserve Bank of Australia and the Bank of Canada both held rates steady, but inflation pressures are not allowing either central bank to signal ‘job done’ just yet. The US Inflation print next week will be crucial in deciding the path of rates for the Fed when it meets on September 20, so it is still too early this week to call for a tide change in central bank policy.

Other key events from the past week

Key events for the coming week

  • USD: US Inflation focus, Sep 13: There is no need for a reminder that US inflation data is key for the path of US monetary policy. Watch out for a big miss in Wednesday’s inflation data to potentially lift gold higher & send USDJPY lower.
  • Seasonal Insights: Where now for the AUDNZD?
  • EUR: ECB Interest Rate Decision, Sep 14: Short-term interest rate markets are currently pricing in a 66% chance of the ECB staying on hold with rates next week. However, could a surprise hike sharply lift the EURGBP?

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