Persistent Price Pressures Strengthen Expectations Of Further Monetary Tightening By Central Banks

The US equity indices ended Friday’s session with moderate gains, recovering amid stabilization in the government‑bond market. By the end of the day, the Dow Jones (US30) rose 0.93% (‑0.21% for the week). The S&P 500 (US500) gained 0.51% (+0.66% for the week). The Nasdaq (US100) closed in positive territory at 0.42% (+2.21% for the week). The key driver of the market’s positive momentum was a sharp decline in oil prices, triggered by reports of progress in negotiations between the US and Iran regarding the lifting of the naval blockade in the Persian Gulf and the easing of sanctions.

The upcoming week in the US will be rich in macroeconomic data and corporate earnings: investors await key inflation and labor‑market releases, speeches from Federal Reserve officials, and earnings reports from Micron Technology and Nike. The main event will be the September non‑farm payrolls (NFP) report, where job creation is expected to slow to 100,000 from 162,000 the previous month, with unemployment edging up to 4.2%. Labor‑market cooling should also be reflected in the ADP report (expected: +70,000) and a decline in JOLTS job openings to 7.23 million. Meanwhile, income and spending data are expected to show accelerating inflation: core PCE is projected to rise 0.3%, and headline PCE 0.4% month‑over‑month. Additional indicators shaping the monetary outlook include the ISM Business‑activity Index and the final estimate of US Q2 GDP.

The Canadian dollar (CAD) came under pressure in September, weakening to 1.41 per USD and hitting a monthly low. The decline is driven by widening interest‑rate divergence between the US and Canada: markets expect further tightening from the Federal Reserve, while the Bank of Canada keeps its key rate unchanged at 2.25%. External trade frictions with the US add additional downside risks to Canada’s economic activity.

The Mexican peso (MXN) weakened to a five‑month low near 17.7 per USD following the September meeting of Banxico. The Mexican Central Bank kept its benchmark rate unchanged at 6.50%, diverging from the Federal Reserve’s renewed tightening cycle. Banxico’s pause narrows the interest‑rate differential between Mexico and the US, reducing the peso’s attractiveness for carry‑trade strategies and weakening its defensive buffer during periods of global volatility.
In Europe, Friday’s session ended mixed: Germany’s DAX (DE40) rose 0.56% (‑0.32% for the week), France’s CAC 40 (FR40) slipped 0.05% (‑0.32% for the week), Spain’s IBEX 35 (ES35) gained 0.65% (+0.38% for the week), and the UK’s FTSE 100 (UK100) closed up by 0.14% (+0.12% for the week).

The main focus for European markets in the coming week will be preliminary inflation data for the Eurozone and its major economies – Germany, France, Italy, and Spain. According to predictions, Eurozone headline inflation will accelerate to 3.5% YoY, reaching its highest level since September 2023, while core inflation is expected at 2.6%, matching the 13‑month high recorded in May. Persistent price pressures strengthen expectations of further ECB tightening. In the UK, key releases will include the final Q2 GDP and business‑investment figures, housing‑price indicators, and the Bank of England’s mortgage‑lending report.

WTI oil prices fell to around $92 per barrel on Friday, reacting to diplomatic initiatives from Tehran, which urged Washington to return to a temporary peace framework. The proposed format is based on the June memorandum of understanding that previously led to a fragile ceasefire, which quickly collapsed amid renewed escalation. Hopes for de‑escalation and restored shipping stability have slightly reduced the geopolitical risk premium, although weekly oil flows through the Strait of Hormuz remain high at 33.7 million barrels.

In Asia, Japan’s Nikkei 225 (JP225) rose by 1.30% (+4.23% for the week), China’s FTSE China 50 fell by 1.35% (‑1.42% for the week), Hong Kong’s Hang Seng (HK50) declined 1.01% (‑0.96% for the week), and Australia’s ASX 200 (AU200) closed 0.43% (‑0.22% for the week).

The upcoming week in the Asia‑Pacific region will be rich in macroeconomic events and central‑bank decisions. In China, investor attention will shift to September PMI readings from the National Bureau of Statistics (NBS) and RatingDog, expected to show moderate recovery in manufacturing and services, as well as the August industrial‑profit report. From October 1 to 7, Chinese financial markets will be closed for National Day celebrations.

The main monetary event in the region will be the Reserve Bank of Australia’s (RBA) meeting, where markets expect a 25 bps rate hike to 4.60%, supported by strong labor‑market data, rising GDP, and persistent inflation pressures. Australia’s calendar will also include the August inflation report, building‑permit data, lending statistics, and the trade balance.

• S&P 500 (US500) 7,743.41 +39.28 (+0.51%)

• Dow Jones (US30) 51,828.62 -95.40 (+0.93%)

• DAX (DE40) 25,408.64 +142.11 (+0.56%)

• FTSE 100 (UK100) 10,695.25 +15.26 (+0.14%)

• USD Index 101.04 -0.25 (-0.25%)

News feed for: 2026.09.28

• Japan BoJ Monetary Policy Meeting Minutes at 02:50 (GMT+3) – JPY (MED)

• Eurozone ECB President Lagarde Speaks at 16:30 (GMT+3) – EUR (LOW)