The Global Bond‑market Selloff Deepens Amid Rising Expectations Of Interest‑Rate Hikes

The US equities began September with a notable decline under pressure from rising bond yields and geopolitical tensions. Investors continue to assess the risks of accelerating inflation due to expensive oil and a potentially hawkish response from the Federal Reserve. By the end of the day, the Dow Jones Index (US30) fell by 0.79%. The S&P500 Index (US500) declined by 0.71%. The Technology Index NASDAQ (US100) closed Tuesday in the red at 1.03%. The stocks most sensitive to rising borrowing costs – technology companies – came under the strongest pressure. Micron shares fell by 2.6%, AMD by 2.4%, Oracle and Palo Alto Networks lost 5.2% each, and Dell dropped by 6.8%. Nvidia shares declined by 1.5%.

Today the Bank of Canada (BoC) will hold its next monetary‑policy meeting. Most analysts agree that the regulator will keep the base rate unchanged at 2.25%, marking a pause for the seventh consecutive meeting. Bank of Canada Governor Tiff Macklem is expected to maintain a neutral and flexible (“data‑dependent”) tone. Since the pause is already priced in, the key importance will lie in the wording of the accompanying statement and hints about how long tight monetary conditions will be maintained – factors that could support the Canadian dollar against the US dollar.

In Europe, by the end of Tuesday, Germany’s DAX (DE40) fell by 1.10%, France’s CAC 40 (FR40) closed down 0.39%, Spain’s IBEX 35 (ES35) declined by 0.75%, and the UK’s FTSE 100 (UK100) closed in the red at 0.32%. European stock markets ended Tuesday’s session with a sharp decline for the second consecutive day amid persistent concerns that tight financial conditions will become a serious obstacle to further economic activity. Published data showed that overall inflation in the Eurozone accelerated above the 3% target, strengthening investor confidence in the inevitability of an interest‑rate hike by the European Central Bank at the upcoming meeting.

WTI oil prices jumped to nearly $91 per barrel, reaching their highest levels since late July amid sharp escalation. The catalyst for the price spike was new US military strikes on Iranian facilities near the Strait of Hormuz following attacks on two oil tankers. US President Donald Trump threatened Iran with an unprecedented large‑scale response in case of countermeasures, while Iranian military sources promised to significantly intensify retaliatory strikes on US bases in the region. The new wave of conflict has greatly increased the risks of a prolonged crisis and potential blockage of key Middle Eastern oil‑transport routes.
In Asia, Japan’s Nikkei 225 (JP225) fell by 0.15%, China’s FTSE China 50 closed down 0.56%, Hong Kong’s Hang Seng (HK50) declined by 0.93%, and Australia’s ASX 200 (AU200) closed Tuesday lower by 0.10%.

The New Zealand dollar (NZD) fell to around $0.584 on Wednesday, hitting nearly five‑week lows after the Reserve Bank of New Zealand (RBNZ) decided on a second consecutive interest‑rate hike but accompanied it with softer‑than‑expected forward guidance. The regulator raised the Official Cash Rate (OCR) by 25 basis points to 2.75%, aiming to return inflation to the 1-3% target range amid its acceleration to 4.1% in the June quarter due to the fuel shock. According to the bank’s updated median expectations, the rate will reach 2.81% by December and 3.15% by the end of 2027 – below the market’s aggressive expectations, which had priced in a peak near 3.5%.

Australia’s Q2 GDP data showed unexpectedly strong economic resilience, significantly strengthening the position of hawkish policymakers. Quarter‑on‑quarter, the economy grew by 0.4% (versus the 0.3% prediction), and annual growth accelerated to 2.1% instead of the expected 1.8%. Against the backdrop of strong macro data, futures now price the probability of a Reserve Bank of Australia (RBA) rate hike at the September meeting at 57% (up from 48%), while the November tightening is almost fully priced in, and the probability of another step in early 2027 has risen to 82%.

• S&P 500 (US500) 7,631.47 -54.67 (-0.71%)

• Dow Jones (US30) 52,766.88 -419.02 (-0.79%)

• DAX (DE40) 25,970.11 -288.00 (-1.10%)

• FTSE 100 (UK100) 10,789.28 -34.98 (-0.32%)

• USD Index 99.69 +0.26 (+0.26%)

News feed for: 2026.09.02

• Australia GDP (q/q) at 04:30 (GMT+3) – AUD (MED)

• New Zealand RBNZ Monetary Policy Statement at 05:00 (GMT+3) – NZD (HIGH)

• New Zealand RBNZ Official Cash Rate at 05:00 (GMT+3) – NZD (HIGH)

• New Zealand RBNZ Press Conference at 06:00 (GMT+3) – NZD (MED)

• US ADP Non-Farm Employment Change (m/m) at 15:15 (GMT+3) – USD (MED)

• Canada BoC Monetary Policy Statement at 16:45 (GMT+3) – CAD (HIGH)

• Canada BoC Overnight Rate at 16:45 (GMT+3) – CAD (HIGH)

• Canada BoC Press Conference at 17:30 (GMT+3) – CAD (MED)

• US Crude Oil Reserves (w/w) at 17:30 (GMT+3) – WTI (HIGH)