The bottom line
- Payrolls closed the door on a data-driven hold. August NFP +162k against ~55k consensus, unemployment steady at 4.1%, net revisions +55k, AHE +3.1% y/y. Fed-funds futures now price a 58% probability of a 25bp hike to 3.75–4.00% on 16 September, with the modal December outcome two hikes. The Committee is in blackout; Friday's August CPI (consensus +0.4% m/m headline, +0.2% core) is the single print that decides it. The Street is split — Citi has pushed its first cut to June 2027, Macquarie and Nationwide call hikes, Fundstrat says a soft core takes hike odds "to zero." Treat every asset this week as a CPI option.
- The weekend Gulf escalation is unpriced but not unexpected. The IRGC fired ballistic missiles at two US Navy ships on Saturday; CENTCOM destroyed three Iranian tankers, one at Kharg anchorage. Tehran says it will declare a "restricted zone" outside Hormuz within days. Brent opened ~$96.5 (+0.2%) — no gap, because this is month seven of the war, Hormuz has been running at 5–7 mb/d against ~20 pre-war, and OPEC+ (now seven producers after the UAE's exit) has conceded it has "very limited power over the physical market." The tail is infrastructure strikes and mines, not another tanker. Diesel is the tightest barrel on earth (US retail a record $5.85, 3-2-1 crack >$70).
- Germany had a political earthquake on Sunday. The AfD is projected at ~44.5% in Saxony-Anhalt — an outright Landtag majority and the first far-right state government since 1945; the CDU halved. Bund and DAX opens and Merz's coalition arithmetic are Europe's Monday story. The ECB hikes Thursday regardless (+25bp to 2.50%, 65 of 65 economists); the market wants ~2.7% by December and Lagarde will not give it a path. Note that BTPs now trade through OATs.
- Australia sits on the hiking side of the ledger. Q2 GDP +0.4% q/q (+2.1% y/y) beat, trimmed mean is stuck at 3.6%, and Bullock has said the Board will hike "if that is what is required." Markets price 58–66% for 29 September and a full move by November; NAB calls September. ACGB 10y at 5.19% is a 2011 high, AUD/USD 0.72 a four-month high, and the ASX 200 fell 0.95% last week with materials −5%. Hunter (13:20) and Hauser (evening) speak Tuesday, bracketing the Westpac and NAB surveys — the first RBA words since the GDP print.
- Positioning is the asymmetry, and it is one-sided. Leveraged funds are short 2.06m 10-year contracts and net short S&P (−318k) and Russell futures; BofA's FMS positioning sits at the 99th percentile with 3.5% cash and a Bull & Bear "sell" at 9.5; SPX 1-month skew and VVIX are at the 1st percentile; the buyback blackout starts ~12 September into a record $6.2trn expiry on the 18th. The pain trade is a soft CPI: duration squeeze plus an equity chase into thin hedging. The mirror is a hot CPI: 10y through the 4.81% high toward 5% with nobody protected. Protection is cheap; own it.
- Digital assets: constructive flows, hostile macro. BTC $80.2k after rejecting $82.5k Thursday; spot ETFs took $987m last week and $3.8bn over three weeks (the best run of 2026); Strategy is buying again. The CLARITY Act cloture vote is 15 September and needs seven Democrats — prediction markets ~15%. BTC is trading as a high-beta rates asset; the FOMC on the 16th matters more than any crypto-native catalyst.
Overnight & weekend recap
Friday 4 September — the jobs report
The BLS printed +162k nonfarm payrolls (private +127k) against ~55k consensus; unemployment 4.1% (unchanged), participation back up to 61.6%, average hourly earnings +0.3% m/m and +3.1% y/y, hours 34.4. June and July were revised up a combined +55k (July from −23k to +21k). Gains were led by food services (+59k), local-government education (+42k), construction (+22k) and manufacturing (+16k); information shed 23k. The year-to-date pace is still only ~60k a month, but the print removed the "labour market is cracking" cover the doves needed after Waller's Thursday speech ("I will support a hold if there is continued progress toward 2%").
The reaction was orderly but decisive: the 2-year rose 4bp to 4.37%, a 52-week high; 10s +2bp to 4.78% (intraday 4.81% earlier in the week was the highest since October 2023); 30s held at 5.25%, a post-2007 high. DXY closed 99.17 (+0.2%) but still lost ~0.7% on the week. Gold fell 1.2% to $4,419; bitcoin gave back the $82k breakout. Cleveland's Hammack said it is "time to act." September hike odds went roughly 50% → 65% → 58% by the close. The S&P 500 fell 0.38% to 7,718.60 but eked out +0.1% on the week (ATH 7,816.70 in August); only Tech (+0.4%, on a chip bid: Micron +6.1%, AMD +4.7%, Intel +4.5%), Industrials and Utilities rose. Single-stock damage was idiosyncratic and heavy: Tesla −5.9% (Cybercab reviews), Apple −2.5% (foldable-iPhone production issues), Lululemon −18% (guide cut), FICO −12% (FHFA ends the mortgage-score monopoly), Broadcom −4–5% Thursday on a Q4 guide of $34.8bn vs $35.05bn despite AI revenue +221%. Nvidia agreed to buy Hugging Face for $12.9bn.
Other US data last week leaned hot: ISM manufacturing 54.6 with prices paid 71.1; ISM services 55.4 with prices paid 72.6, the highest since August 2022; JOLTS openings 7.3m; claims 206k; the Beige Book found activity up modestly in 10 of 12 districts with energy, Iran and tariffs the recurring price complaints. Politically, the House passed a clean CR to 11 December (370–48) so the 30 September shutdown cliff is largely defused; Trump's Friday post — "LOWER THE RATE OR I'LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT" — and the White House's August notice to Governor Cook keep Fed independence live as a term-premium input.
Europe and Asia into the weekend
Europe closed a soft week: Stoxx 600 −0.8%, Euro Stoxx 50 −1.4%, with the DAX at 26,054 (record 26,618 in late August). VW +6.6% on "Future Plan 2030" (50k more job cuts, 9% margin target); Rheinmetall −3.5% on Putin's softer tone; Vivendi −6.7%. Euro-area August flash HICP re-accelerated to 3.3% (core 2.4%, energy +14.3%). Bunds 3.34%, OAT 4.21% (highest since November 2008), BTP 4.14% — Italy trades ~6bp through France. Gilts 5.13% (30y 5.78%).
Asia was mixed. The Nikkei snapped a four-day slide (+1.26%, SoftBank +10–12%) but lost 2.1% on the week as the JGB 10-year touched 3.00% on 1 September, the first time since 1996, before settling at 2.91%; the yen posted its best week in a month (USD/JPY 156.19, a test of 155.21) with the MoF "on alert" and Bessent having met Ueda to urge "decisive" action. Hong Kong rallied 1.7% on tech; mainland drifted (Shanghai −0.6% w/w, ChiNext −4.0%). The PBoC fixed the yuan ~640–690 pips weak of estimates — the strongest lean against appreciation since February — with CNH at its strongest since January 2023. Korea's August exports rose 68.7% y/y with chips +209% to a record $46.7bn; the Jan–Aug total already exceeds 2025's full-year record. The ASX 200 fell 0.16% Friday and 0.95% on the week as hot GDP revived RBA-hike fears; Corporate Travel collapsed 85% on Thursday when it resumed trading after a year-long audit suspension.
Weekend 5–6 September
Gulf. Saturday: IRGC ballistic missiles at two US Navy ships enforcing the blockade; CENTCOM struck three Iranian tankers, one at Kharg anchorage ("shoot at two of ours, we take out three of yours"). Iran promised a "faster, heavier, more painful" response and a "restricted zone" outside Hormuz starting at the US blockade line; Energy Secretary Wright said there "may not be a nuclear deal" and any agreement "may await the next administration in Iran"; VP Vance ruled out talks until ship attacks stop; Netanyahu called toppling the regime Israel's "central mission." Iranian crude loadings are ~260kb/d against 1.7mb/d pre-war; the rial is 2.2m/$ with inflation ~70%. Kpler counted four commodity vessels transiting Hormuz on Thursday against a 10-day average of ~15. OPEC+ (seven producers) met virtually Sunday and held October output at September levels; the 2023 cuts are fully unwound and the group has moved to 2027 baseline talks.
Russia–Ukraine. Witkoff and Kushner held 3+ hours of "substantive" talks with Putin on Saturday and were in Kyiv Sunday; both sides paused strikes on capitals during the visits, but Russian attacks killed nine elsewhere and Ukraine hit the Ryazan refinery. No terms are public; no ceasefire. Germany. AfD ~44.5% in Saxony-Anhalt (ARD projection). Japan–US. Akazawa, Lutnick and Greer confirmed $550bn-pact tranches ($36bn energy/minerals, $73bn nuclear/gas) and the 15% tariff cap. China injected ~$54bn of capital into state banks and insurers. Canada's C$19.9bn counter-tariffs on 700+ US products take effect Tuesday. Sell-side: Citi pushed its first Fed cut to June 2027; Hartnett ("policy panic is working") says stay long commodities and gold; Citadel Securities (Rubner) says "use strength to reduce exposure and add cheap protection" into mid-October.
Monday indicative opens (M): EUR/USD 1.1613, USD/JPY 155.98, GBP/USD 1.3507, AUD/USD 0.7197, NZD/USD 0.5875, USD/CAD 1.3831; Brent $96.52 (+0.2%); gold $4,425 (Sunday print); SPI futures flat at 9,002. Bathla Group's creditors (~$3.4bn owed) meet in Sydney today with administrators warning site work could stop.
Market dashboard
Week to 4 September — cross-asset change
| Equities | Close | 1d | 1w | Note |
|---|---|---|---|---|
| S&P 500 | 7,718.60 | −0.38% | +0.1% | ATH 7,816.70 (Aug). 50d 7,585 · 200d 7,137 |
| Nasdaq Composite | 26,506.99 | −0.29% | +0.4% | Semis bid Friday: Micron +6.1%, AMD +4.7% |
| Dow Jones | 53,414.25 | −0.51% | −0.3% | |
| Russell 2000 | 2,975.65 | +0.25% | n/a | LF net short −109.5k contracts |
| VIX / VIX3M | 14.53 / 17.61 | +1.5% | flat | Ratio 0.825 · Oct future 18.14 · skew 1st pct |
| Stoxx 600 | 649.9 | +0.1% | −0.8% | Euro Stoxx 50 −1.4% w/w |
| DAX | 26,053.88 | +0.04% | neg. | Record 26,618 late Aug · AfD shock pending |
| FTSE 100 | 10,831 | flat | −0.1% | |
| Nikkei 225 | 65,020.94 | +1.26% | −2.08% | TOPIX 4,103.23 (−1.05% w/w) |
| Hang Seng | 25,650.87 | +1.74% | +0.33% | HS Tech +2.27% Fri, −0.77% w/w |
| CSI 300 | 4,548.05 | −0.10% | −1.33% | Shanghai 3,930.12 (−0.56% w/w) · ChiNext −4.03% w/w |
| KOSPI | 6,687.21 | +1.64% | −1.50% | Aug exports +68.7% y/y, chips +209% |
| TAIEX | 46,551.13 | +1.51% | +0.47% | |
| Nifty 50 | 23,897.70 | +0.10% | −1.15% | |
| S&P/ASX 200 | 9,005.9 | −0.16% | −0.95% | SPI (M) 9,002 · Materials −5.0% w/w · Tech −5.5% w/w |
| Rates & credit | Level | 1d | 1w / context | Note |
|---|---|---|---|---|
| UST 2y | 4.37% | +4bp | 52-wk high | Highest since Jan 2025; ~1.5 hikes priced by Dec |
| UST 10y | 4.78% | +2bp | ≈ +5bp | Intraday 4.81% mid-week, highest since Oct 2023 |
| UST 30y | 5.25% | unch | post-2007 high | Treasury doubles long-end buybacks to ≥$4bn/op from 9 Sep |
| 2s10s | ≈ +41bp | slightly flatter | MOVE ~75 (secondary source) | |
| Bund 10y | 3.34% | −1bp | m/m +23bp | 30y >3.84%, highest since 2011 |
| OAT 10y | 4.21% | flat | Nov-2008 high | OAT–Bund ≈ 85–87bp |
| BTP 10y | 4.14% | −3bp | Jun-2024 high | BTP–Bund ≈ 80bp — Italy through France |
| Gilt 10y / 30y | 5.13% / 5.78% | −2bp | m/m +24bp | Burnham government; Budget 28 Oct (single source) |
| JGB 10y / 30y | 2.91% / 3.97% | −6bp / −11bp | 10y hit 3.00% (1 Sep) | 30y record 4.21% this month; 2y 1.83% (1995 high) |
| ACGB 3y / 10y | 4.76% / 5.19% | +6bp (10y) | m/m +29bp | 10y highest since Jul 2011; 5.25% intraday |
| Canada 10y | 3.78% | −2bp | m/m +22bp | |
| US IG OAS | 81bp | unch | +2bp | ICE BofA, 3 Sep · IG yields >5.5%, 2-yr high |
| US HY OAS | 265bp | −1bp | +5bp | BB 146 / B 250 at tights; CCC ~850bp (97th pct) |
| FX | Fri close | 1d | Mon open (M) | Week | Note |
|---|---|---|---|---|---|
| DXY | 99.17 | +0.21% | — | ≈ −0.7% | Waller knocked it >0.5% Thursday; NFP recovered part |
| EUR/USD | 1.1614 | −0.10% | 1.1613 | n/a | 1.17 = 200dma resistance · 1.1563 support |
| USD/JPY | 156.19 | +0.26% | 155.98 | ≈ −2.4% | Yen's best week in a month; 155.21 = Aug post-intervention level |
| GBP/USD | 1.3523 | −0.02% | 1.3507 | n/a | Two-week low Thursday |
| AUD/USD | 0.7204 | +0.05% | 0.7197 | ≈ −0.7% | Four-month high on RBA repricing; spec short at 97th pct COT |
| NZD/USD | 0.5881 | +0.02% | 0.5875 | ≈ +0.5% | AUD/NZD ≈ 1.225 |
| USD/CAD | 1.3837 | +0.31% | 1.3831 | ≈ −0.9% | Aug jobs −41.7k, UR 6.4%; retaliatory tariffs Tue |
| USD/CHF | 0.8098 | +0.28% | 0.8095 | ≈ −0.1% | |
| USD/CNY | 6.7078 | −0.15% | fix est. 6.7086 | m/m −0.6% | Fri fix 6.7787 vs 6.7098 est — PBoC leaning hard against CNY strength |
| USD/MXN · INR · KRW | 16.89 · 94.38 · 1,345.6 | −0.2 · −0.1 · −0.8% | — | MXN spec long at an extreme (COT 0%); KRW −5.3% m/m on chip exports |
| Commodities & digital assets | Last | 1d | 1w | Note |
|---|---|---|---|---|
| Brent (front) | $96.28 · (M) $96.52 | +0.8% | +7.6% | Steepest weekly gain since mid-July; +46% y/y; ~+60% YTD |
| WTI (front) | $91.48 | +0.2% | +9.9% | XOP highest monthly close since Jun 2015 · spec length only 15th pct |
| Henry Hub / TTF | $2.98 / €74.93 | +2.1% / +4.1% | n/a / >+7% | TTF 4th weekly gain, +127% y/y on Qatar LNG paralysis |
| Gold (spot) | $4,419 · (Sun) $4,425 | −1.2% | ≈ −1% | Below 20d 4,497 / 50d 4,493 / 200d 4,541 · ATH ~$5,590–5,608 (Jan) |
| Silver / Platinum | $65.83 / $1,811 | −1.7% / −0.8% | wkly loss | Gold/silver ratio 66.7 |
| Copper (LME 3M) | $14,415.50/t | +0.6% | n/a | Record 25 Aug · Comex 675kt stock · Section 232 pending · +47% YTD |
| Iron ore (SGX 62%) | $99.57/t | +0.2% | m/m +6% | Highest since June; China July crude steel −3.6% y/y |
| Aluminium (LME) | $3,303.50/t | +1.5% | ≈ +1.9% | LME stocks near 36-yr low; Gulf smelter risk |
| Lithium carb. / Uranium | CNY152k/t / $89.50 | −2.6% / — | +103% y/y / +3.7% m/m | |
| Bitcoin | $80,196 | +0.7% | +2.5% | 7 Sep ~00:30 UTC · rejected $82.5k Thu · mcap $1.61tn · dominance 57.8% |
| Ether / Solana | $2,518 / $106.34 | +1.4% / +3.0% | +1.8% / +2.6% | ETH keeps rejecting $2,500 |
| XRP / BNB | $1.42 / $752 | +0.6% / +2.3% | +2.7% / +8.5% | Total crypto cap $2.79tn |
Conventions: 1d = change on Friday's session; 1w = change versus Friday 28 August close where a verified prior exists, otherwise the nearest published measure (m/m, y/y) is shown and labelled. Yields quoted to the nearest basis point; "≈" marks values derived from two sources or a pre-close table. Gold is spot (Comex Dec settled $4,476.60). WTI is the Reuters-cited settle; Trading Economics shows $92.15 on a different roll convention.
What is driving markets
1. The energy shock has become a monetary shock
Seven months into the US–Iran war, the transmission has moved from headline oil to core policy. Brent is +46% y/y and roughly +60% year-to-date; Hormuz is moving 5–7 mb/d against ~20 mb/d pre-war; diesel, not crude, is the binding constraint (3-2-1 crack >$70 against a <$20 norm, EU diesel +70% since February). That has fed through to prices-paid indices (ISM services 72.6, the highest since August 2022), to PCE (3.7% over 12 months, 4.1% over six) and, crucially, to central-bank reaction functions. Warsh's Jackson Hole framing — 2% is "firm, fixed", the Fed is "committed to a discipline, not to a decision", forward guidance is abandoned, and tight credit spreads are evidence policy "shows few signs of restraint" — was the pivot from looking through a supply shock to defending expectations. The ECB (June hike, another Thursday), BoJ, RBA, RBNZ and BoC have all moved the same way; Norges and Riksbank are leaning hawkish; only the SNB and PBoC are outside the tent.
2. The long end is where the stress lives
This is a global term-premium repricing, not a US-only story. UST 30s at 5.25% are a post-2007 high and the Treasury has doubled its long-end liquidity buybacks to a $4bn minimum per operation from Wednesday, with Bessent signalling more if 10s approach 5%. JGB 10s touched 3.00% for the first time since 1996 and 30s printed a 4.21% record this month as FY2027 budget requests hit ¥143.1tn under a Takaichi government with a two-thirds majority and a spending mandate; Reuters is flagging GPIF repatriation risk. OATs are at 2008 highs with Lecornu's minority government facing a pre-announced censure over the 2027 budget; Goldman calls 100bp OAT–Bund a "stress scenario" and Italy already trades through France. Gilts (30y 5.78%) are pricing energy inflation plus fiscal doubt under a new Burnham/Healey government. ACGB 10s at 5.19% are a 2011 high. Hartnett's read — central banks tilting to hikes to defend $4 gasoline / 160 yen / 5% Treasuries, "policy panic is working" — is the consensus explanation; the alternative reading is that hikes into a supply shock raise, not lower, the term premium by pulling growth forward into a fiscal problem.
3. The crowd is long risk, short bonds, and unhedged
The positioning picture is unusually legible. In futures, leveraged funds are short 2.06m 10-year contracts and 1.27m 2-years (the basis trade at full stretch), net short S&P e-minis (−318k) and Russell (−110k), and short yen (−102k, re-extended last week). Managed money is long 228k gold contracts (96th percentile even after a 15k cut), long 130k WTI (only the 15th percentile — oil length is not crowded), and at extremes in MXN longs (COT 0%), AUD shorts (97%) and copper/silver longs. Institutional surveys sit at the other extreme: BofA's August FMS shows cash at 3.5% (sixth-lowest since 1998), equities net 56% overweight (highest since November 2021), "no landing" a record 56%, the Bull & Bear indicator at 9.5 (sell) — and 72% expecting no hike before the midterms, a view the market has already abandoned. Options are the tell: SPX one-month 25-delta skew and VVIX are at the 1st percentile, equity put/call 0.58, the VIX 14.5 against a 17.6 three-month. Citadel's Rubner notes CTAs and vol-control have "rebuilt exposure" and that systematic buying capacity is depleted; the buyback blackout begins ~12 September ($1.1trn of authorisations sidelined) into a record $6.2trn expiry on the 18th, and top-100 pensions at 112% funded will de-risk into quarter-end.
4. AI capex is still the earnings engine — financing is the crack
The earnings side remains extraordinary. Nvidia printed $96.2bn revenue (+106% y/y) with a $108bn guide; Q2 S&P EPS growth ran ~33% with 87% beating; FactSet has Q3 at +28.5% and rising (energy +102%, IT +63%), CY26 at +31.5% and the forward P/E at 19.5, below its five-year average. Korea's chip exports at +209% y/y are the macro echo. The financing side is where the FMS's top tail risk (AI bubble, 32%) and Warsh's credit-restraint comment meet: hyperscaler capex is ~$690bn+ in FY26 and ~$1trn next year on Morgan Stanley's numbers, free cash flow is near zero or negative for all but Alphabet and Microsoft, ~32% of capex is debt-funded, Alphabet raised $84.75bn of equity in June, Oracle was cut to BBB−, and IG issuance is on a $215bn September pace. In private credit, BCRED has gated redemptions at 5% for a second quarter after ~10% sought exit, and BDC software loans have been marked from $96.5bn cost to $92.9bn on "over-levered horizontal software with real AI exposure." Broadcom's −4% on a marginal guide miss shows the bar; Oracle and Adobe on Thursday (AEST Fri ~06:05) are the next test of RPO-versus-financing.
5. Politics is now a first-order market input
Three fronts. Europe: an AfD absolute majority in Saxony-Anhalt breaks the post-war "firewall" and halves Merz's CDU in the east; the coalition's fiscal package and pension disputes get harder, not easier, and the Bund's safe-haven premium versus OATs is now itself a political variable. Washington: Trump's Friday threat to stop trading with deficit countries unless the Fed cuts, the White House's notice to Governor Cook, and Vance/Bessent/Navarro piling on put Fed independence back into the term premium two weeks before a possible hike; the generic ballot is D+6.6 and Hartnett puts a Democratic sweep at ~50% on prediction markets ("gridlock is goldilocks", a sweep is >10% downside). Tariffs have migrated from IEEPA (struck down in February, ~$129bn refunds) to Section 232/301/338 authorities; Canada's C$19.9bn retaliation lands Tuesday. Asia: the US–China truce is fraying (12.5% tariff, six US firms banned, drone export controls) with a Xi visit around 24 September reported but unconfirmed; Japan's supermajority is spending; Israel votes 27 October.
Central bank watch
Fed funds pricing — implied probabilities by meeting
| Bank | Policy rate | Last move / vote | Next decision (AEST) | Market pricing | Bias |
|---|---|---|---|---|---|
| Fed | 3.50–3.75% | Held 29 Jul, 9–3 (Hammack, Kashkari, Logan for +25) | Wed 16 Sep · 04:00 Thu AEST · SEP + dots | 58% hike Sep; Dec modal +50bp (41% one hike / 36% two / 8% three) | Hawkish |
| ECB | DFR 2.25% | +25bp 11 Jun (first in 3 yrs); held 23 Jul unanimous | Thu 10 Sep · 22:15 AEST · presser 22:45 | +25bp to 2.50% fully priced (65/65 economists); ~2.7% Dec; 3.0% mid-2027 | Hiking, not guiding |
| BoJ | 1.00% | +25bp Jun (31-yr high); Ueda 2 Sep: "hope to continue raising" | Fri 18 Sep · ~13:00 AEST | Sep hike 63–75%; Oct fully priced; 1.50% year-end | Hawkish |
| BoE | 3.75% | Held Jul, 6–3 (Greene, Mann, Pill for 4.00%) | Thu 17 Sep · 21:00 AEST | ~15% Sep; >70% Nov; one hike fully priced by year-end | Hawkish hold |
| RBA | 4.35% | Held 11 Aug unanimous after Feb/Mar/May hikes; "ready to increase further" | Tue 29 Sep · 14:30 AEST | 58–66% Sep; Nov fully priced; peak ~4.8% mid-2027 | Hawkish hold |
| RBNZ | 2.75% | +25bp 2 Sep (2nd straight); "gradually removing stimulus" | Wed 28 Oct | ~31% Oct; 3.0% by Mar-27; peak 3.2–4.0% | Hiking, gradual |
| BoC | 2.25% | Held 2 Sep (7th straight); Macklem "prepared to raise" | Wed 28 Oct | +25bp by Dec (pre-jobs); Aug jobs −41.7k complicates | Hawkish hold |
| SNB | 0.00% | Held 18 Jun; Aug CPI 0.8% (2-yr high) | Thu 24 Sep | First hike ~Jun-27 | On hold |
| PBoC | 1y LPR 3.00% / 7d RR 1.40% | 15th month unchanged; "appropriately loose"; $54bn bank capital (weekend) | LPR Mon 21 Sep | Unchanged; CNY fix leaning against strength | Easing bias |
| Norges / Riksbank | 4.25% / 1.75% | Both held Aug; "may still be necessary to raise" / hike "later this year" possible | Thu 24 Sep (both) | Hawkish hold | Hawkish hold |
| Emerging markets | |||||
| Brazil (BCB) | Selic 14.00% | −25bp 5 Aug (easing cycle) | Wed 16 Sep | Focus 2026 IPCA 5.0%; election poll Lula 42 / F. Bolsonaro 41 | Easing |
| Mexico (Banxico) | 6.50% | Held 6 Aug | Thu 24 Sep | MXN strongest since May 2024; spec long extreme | Hold |
| India (RBI) | 5.25% | 4th hold 5 Aug; "premature to discuss tightening" | Wed 7 Oct | Reserves record $729bn; INR 94.4 | Neutral |
| Korea (BoK) | 3.00% | +25bp 27 Aug (2nd straight) | Thu 22 Oct | Jul CPI 2.8%; KRW −5.3% m/m | Hiking |
| Indonesia (BI) | 5.75% | +100bp since May; held 19 Aug; new governor Damayanti (2 Sep) | Wed 23 Sep | Hold | |
| Turkey (CBRT) | 37.00% | 4th hold Jul | Thu 10 Sep (calendar sources; unconfirmed) | Hold expected | Hold |
Fed detail. Chair Kevin Warsh (sworn in 22 May; Powell remains a Governor to January 2028). July's three dissents for a hike are the largest hawkish bloc of the cycle. Waller (3 Sep) laid out the dovish path — hold "if there is continued progress toward our 2 percent goal", noting three-month core PCE at 3.05% in July versus 4.76% in February; Hammack (4 Sep) said it is "time to act." Blackout began Saturday. The Supreme Court upheld Governor Cook 5–4 in June; the White House notified her in August that removal is being "considered" (secondary source). The 30 September funding cliff is defused by a CR to 11 December (signature not yet confirmed).
ECB detail. August flash HICP 3.3% (July 2.9%), core 2.4%, energy +14.3%, services 3.0%; Q2 GDP +0.4% q/q. The meeting is hosted by the Bundesbank in Berlin. Watch the staff projections (June had 3.0/2.3/2.0% HICP for 2026–28), any energy scenario analysis, second-round/wage language, and whether Lagarde keeps "the burden of proof is on data" — FXStreet's summary, "hiking, not guiding", is the right prior. Simkus has said "September is not enough."
BoJ detail. Inflation is not the driver — national CPI 1.9%, core 1.8% — the yen and the long end are. Ueda wants hikes "as financial conditions remain accommodative"; Takata floats back-to-back moves; FinMin Katayama is monitoring bonds "with heightened urgency". July wages (consensus +3.9%) and the Q2 GDP revision land Tuesday 09:30–09:50 AEST. JPMorgan's ¥16–17tn short-yen estimate is the number behind its 142–146 unwind scenario.
Regional briefs
United States
Growth is fine, inflation is not. Payrolls +162k, ISM services 55.4, Q3 EPS growth tracking +28.5%; against that, ISM prices paid at 4-year highs, PCE 3.7%, CPI 3.4% and a Fed that has told you it will not pre-commit. The tape has flipped to "good news is bad news." The 2-year at 4.37% already embeds roughly 1.5 hikes by December; the 10-year at 4.78% is 3bp from the cycle high. Auctions Tue–Thu, buybacks from Wed, CPI Fri. Corporate: Apple's event Wednesday (03:00 AEST Thu) with incoming CEO Ternus; Oracle/Adobe Thursday after the close; IG issuance restarts Tuesday on a record September pace. Politics: CR to 11 Dec passed; Trump–Fed rhetoric escalating; midterms 3 Nov with the generic ballot D+6.6.
Euro area
Hike into a political shock. Thursday's +25bp is fully priced; the question is the path (market: ~2.7% Dec, 3.0% mid-2027). Sunday's Saxony-Anhalt result puts the AfD on course for the first far-right state government since the war and halves the CDU; Merz's fiscal package now runs through a weaker chancellor. France: Lecornu's minority government presents the 2027 budget ~30 Sep with LFI's censure pre-announced; Fitch A+/stable (28 Aug) bought time, Moody's Aa3 negative did not. OAT–Bund 85–87bp; BTP–Bund ~80bp. German factory orders +2.5% (vs +0.3%) and Monday's IP (16:00 AEST) are the growth reads. Equities: Stoxx 600 −0.8% w/w; autos bid (VW +6.6%), defence sold on Putin's tone.
United Kingdom
New government, old problem. PM Andy Burnham (since ~20 July) and Chancellor John Healey inherit gilts at 5.13%/5.78% (10y/30y) with CPI 2.9% and services 3.4%; the Budget is reported for 28 October (single source). Burnham has pledged to keep the fiscal rules; the market is pricing the risk he cannot. The BoE held 6–3 in July with Pill arguing a hike now avoids more later ("if you wait-and-see and then do not see, all you have done is waited"); a hike is fully priced by year-end. July GDP Friday 16:00 AEST (cons −0.2% m/m). Bailey called populism a global threat; USTR Greer said the UK "is choosing the EU over the US."
Japan
Normalisation meets fiscal expansion. PM Takaichi's LDP holds 316/465 seats after February's landslide; FY2027 budget requests are a record ¥143.1tn with ~¥40tn of new bonds targeted and debt service of ¥36.6tn at an assumed 3.8%. The BoJ (1.00%) is near-fully priced for 18 September; the 10-year touched 3.00% on 1 September and 30s printed 4.21% this month, though the 30-year auction on 3 September "passed smoothly." The yen had its best week in a month (155.98 open) with Bessent having pressed Ueda for "decisive" action and the MoF "on alert" — May's intervention was a record ¥11.7tn. Nikkei 65,021 (−2.1% w/w); SoftBank +10–12% Friday; banks and trading houses sold. Tuesday: Q2 GDP second estimate (cons +0.4% q/q) and July wages (cons +3.9%) at 09:30–09:50 AEST. The US–Japan $550bn pact tranches and 15% tariff cap were reaffirmed at the weekend.
China & Hong Kong
Data week, strong yuan, weak steel. Trade Tuesday ~13:00 AEST (July exports +23.9% y/y, surplus $112.5bn; August consensus $108–120bn), CPI/PPI Wednesday 11:30 AEST (July 0.5%/3.5%; cons 0.9%/3.6%), credit data Thu–Sat (new loans ~RMB500bn). The PBoC fixed 640–690 pips weak of estimates on Friday — the hardest lean against CNY strength since February — with CNH at its strongest since January 2023; ~$54bn of state-bank capital was injected at the weekend. LPR unchanged for 15 months at 3.00%; new-home prices −3.2% y/y (37th decline); July crude steel 76.9mt, the weakest July since 2017, which caps iron ore near $100 even as Simandou lags and Vale cuts guidance. Equities: ChiNext −4.0% w/w, Shanghai −0.6%, HSI +1.7% Friday on tech; SHEIN −8.7% in its third HK session. US–China: 12.5% tariff since late July, six US firms banned, drone export controls; a Xi visit ~24 Sep is reported (single source); soybean purchases into the Sep–Oct harvest are the near-term test; AI talks tentatively mid-September.
Emerging Asia & LatAm
Korea is the AI-export superpower: August exports +68.7% y/y ($98.3bn), chips +209% to a record $46.7bn; KOSPI 6,687 (−1.5% w/w after a run); BoK hiking (3.00%). Risk: renewed US plans for targeted chip tariffs. Taiwan: TAIEX 46,551 (+0.5% w/w), July exports +32.9%; August CPI Tue, trade Wed. India: Nifty −1.2% w/w with volatility blamed partly on the new closing-auction mechanism; USD/INR 94.4; RBI on hold at 5.25% (next 7 Oct); US tariff status post-July unverified. Indonesia: JCI ~+2.7% w/w; new BI governor Damayanti. Brazil: Selic 14.00% easing, Copom 16 Sep, IPCA Friday (cons 4.2%), election polls tied. Mexico: peso strongest since May 2024 with spec longs at an extreme; CPI Wednesday.
Australia & New Zealand
RBA: a hawkish hold with a live September
Cash rate 4.35% after three 2026 hikes (Feb, Mar, May) and unanimous holds in June and August. The August statement did the work: headline inflation "still too high", trimmed mean "elevated", oil "adding directly to inflation", the Board "ready to increase the cash rate further if upside risks materialise", midpoint of the band not before late 2027. Bullock in the presser: "The Board will raise interest rates further if that is what is required." Since then: Q2 GDP beat (+0.4% q/q, +2.1% y/y vs 0.3%/1.8%; consumption +0.4%, dwellings +1.6%, productivity flat, unit labour costs hot), July CPI 3.5% headline (from 3.8%) but trimmed mean 3.6% unchanged with electricity +6.1% y/y as rebates roll off and fuel +7.5% m/m on the partial excise unwind, and July unemployment up to 4.5% with employment −16k. Pricing: 58% (swaps) to 66% (IG) to 70% (ABC) for 29 September; November fully priced to 4.60%; peak ~4.8% mid-2027. Bank calls: NAB September, ANZ and CBA November, Westpac hold through 2026. New MPB member Melinda Cilento replaced Ian Harper from 1 September.
This week is the RBA's first word since GDP: Assistant Governor Hunter at the AFR Property Summit (Tue 13:20 AEST) and Deputy Governor Hauser on ABC 7.30 (Tue evening), with the Westpac consumer sentiment (Tue 10:30; Aug 88.9, expected low-to-mid 80s) and NAB business survey (Tue 11:30; July confidence −6) in between. Bullock testifies to the House on 18 September. August CPI is 30 September, the day after the meeting; August labour force is 24 September.
Markets: rates at 2011 highs, AUD at 4-month highs, ASX heavy
Rates. ACGB 3y 4.76%, 10y 5.19% (5.25% intraday, highest since July 2011, +29bp m/m). The 3s10s curve at ~43bp is steep for a hiking cycle — the RBA path sits in 3s, the global term premium in 10s. AUD. 0.7204 close, 0.7197 open — a four-month high on RBA repricing and a softer dollar post-Waller, capped by payrolls. Speculative shorts are at the 97th percentile of the COT index, the raw material for a squeeze on any dovish-Fed / hawkish-RBA divergence; AUD/JPY 112.5 (−1.7% w/w) is the pair to avoid if the BoJ delivers; AUD/NZD ~1.225 after the RBNZ's gradualist hike. Equities. ASX 200 9,005.9 (−0.16% Fri, −0.95% w/w), SPI flat at 9,002. Materials −5.0% and Tech −5.5% on the week; BHP −6.4% w/w; energy sold Friday (Ampol −5.5%) despite Brent — refining margins are the tell. Weekly leaders Graincorp +12.7% (crop upgrade), Austal +7.1%, Pexa +6.4%; laggards Pinnacle −19.4% (KPMG sign-off delay on three Metrics Credit Partners funds — a private-credit read-across), Silex −16%, Lovisa −13.7%; Corporate Travel −85.5% on resumption (mkt cap $2.35bn → $340m). ASX VIX 10.6 is complacent against the event calendar. September seasonality: −0.65% average since 2001, positive only 44% of the time. Property. Cotality August: national −0.9%, fifth straight fall, −3.6% from the March peak (Sydney −1.4%); rents +5.9% y/y — the household channel is now working against the RBA's demand story and for its inflation story. Bathla Group's ~$3.4bn creditors meeting today is the construction-sector stress marker.
The China and commodity link
Iron ore $99.57/t (SGX 62%), the highest since June and +6% m/m, but the demand side is soft: China's July crude steel 76.9mt was the weakest July since 2017, the steel PMI has been contractionary since April and port stocks are elevated. Supply is the support — Vale cut 2026 guidance to 335–345mt and Simandou remains sub-capacity — which is why Westpac has Q3 averaging $100 and Q4 $97 before sliding toward $83 by end-2027. Tuesday's China trade data (imports of iron ore ~111mt in August on estimates) and Wednesday's PPI are the reads. Copper at $14,416/t (+47% YTD) is a tariff trade more than a China trade — the Section 232 refined-cathode decision is the event. Lithium carbonate +103% y/y (CNY152k/t) as Bald Hill/Finniss restart against storage demand; uranium $89.50/lb. Energy: Australia is a net beneficiary of the Hormuz LNG shock (JKM ~$19, 75% above pre-conflict) — the gas exporters are the domestic hedge against the war.
New Zealand
The RBNZ hiked 25bp to 2.75% on 2 September (second straight) but framed it as "gradually removing monetary stimulus" — projected OCR 2.8% Dec-26, 3.0% Mar-27, 3.2% Dec-27 — and NZD sold on the gradualism (0.5875 open). Q2 CPI 4.1% (core ex-fuel 2.9%). October is ~31% priced, December largely priced; next MPS 28 October. AUD/NZD spiked 1.25% on the day to 1.2278 and has held ~1.225: the RBA/RBNZ divergence is the cleanest expression of the "Australia is behind the curve" thesis.
| Australia — key data trail | Latest | Prior | Next release (AEST) |
|---|---|---|---|
| Cash rate | 4.35% | 4.10% (May) | Tue 29 Sep 14:30 · Nov 3 (fully priced) |
| GDP q/q · y/y (Q2) | +0.4% · +2.1% | Q1 revised · 1.8% exp. | Q3: early Dec |
| Monthly CPI headline · trimmed mean (Jul) | 3.5% · 3.6% | 3.8% · 3.6% | Aug: Wed 30 Sep 11:30 |
| Unemployment · employment (Jul) | 4.5% · −16k | 4.4% | Aug: Thu 24 Sep 11:30 |
| Cotality home values (Aug) | −0.9% m/m (5th fall) | −3.6% from Mar peak | Sep: 1 Oct |
| Westpac consumer sentiment | 88.9 (Aug) | Tue 8 Sep 10:30 (exp. ~85.7) | |
| NAB business confidence | −6 (Jul) | Tue 8 Sep 11:30 (exp. ~−8) | |
| Iron ore (SGX 62%) | $99.57/t | +6% m/m | China trade Tue ~13:00 · CPI/PPI Wed 11:30 |
| Federal budget 2026–27 | Deficit $31.5bn (1.0% GDP) | Gross debt $1,051bn | CGT discount to 30% from 1 Jul 2027; Div 296 recast (secondary source) |
House views & tactical framework
| Asset | Bias | Conv. | Horizon | Rationale | What changes the view |
|---|---|---|---|---|---|
| Rates | |||||
| US front end (2y) | Neutral | Low | 1–2 wk | 4.37% embeds ~1.5 hikes by Dec; Sep is a 58/42 coin flip decided by one print. No edge before CPI. | Core CPI ≤0.2% → receive; ≥0.4% → 2y 4.50%+. ISM prices paid argue upside risk to headline. |
| US 10y | Tactical long into CPI (small) | Med | 1–2 wk | LF short 2.06m contracts; 4.81% double-top; buybacks doubled from Wed; consensus core 0.2% sets a low bar for a squeeze. | Headline ≥0.5% m/m; tailed 10y/30y auctions; close above 4.85%. |
| US curve (5s30s) | Steepener | Med | 1–3 mo | Term-premium repricing is global and fiscal; buybacks are a floor not a ceiling; supply Wed/Thu; Fed-independence noise lifts the long end. | A hike that crushes breakevens (bear flattener) or a credible fiscal pivot. |
| ACGB 3s10s | Flattener | Low | 1–2 mo | 43bp is steep for a hiking cycle; RBA path in 3s, global term premium in 10s; a September hike flattens. | Dovish Hunter/Hauser Tuesday; Westpac sentiment collapse. |
| Equities | |||||
| S&P 500 | Neutral, hedged; cut beta 12–18 Sep | Med | 2–4 wk | Earnings strong (Q3 +28.5%) so not short; but seasonality (Sep −1.1% avg), blackout ~12 Sep, record $6.2trn opex 18 Sep, skew 1st pct = protection is cheap. | Clean break of 7,817 with breadth confirmation; soft CPI + Fed hold. |
| ASX 200 | Underweight tactically | Med | 2–4 wk | RBA hike risk, Sep seasonality (−0.65% avg), materials weakness, iron ore capped ~$100, property −3.6% from peak. Prefer LNG exporters and insurers; avoid REITs/discretionary. | China stimulus or steel upturn; RBA dovish surprise; hot AUD unwinds. |
| Japan | Long banks vs exporters | Med | 1–2 mo | BoJ 18 Sep, JGB 10y ~3%, yen strength hurts exporters; banks are the rate beneficiaries; Nomura flags persistent risk aversion despite record profits. | BoJ skip; hot US CPI reviving the carry bid. |
| China / HK | Neutral; H over A | Low | 2–4 wk | Data-heavy week; policy put ($54bn capital); HK tech rebound; ChiNext −4% w/w shows A-share froth deflating; strong CNY favours H-shares. | Trade data miss; renewed US chip-tariff plans. |
| FX | |||||
| AUD/USD | Bias higher (0.7250–0.73) | Med | 2–4 wk | RBA hawkish vs Fed coin flip; spec short 97th pct COT; four-month high; China trade Tuesday. | Risk-off / oil demand destruction; RBA dovish; China data miss. |
| USD/JPY | Short | Med | 1–2 mo | BoJ hike near-priced, MoF alert 155–160, Bessent pressure, LF short yen −102k is fuel; JPM unwind scenario 142–146. | Hot US CPI + Fed hike; BoJ skip; MoF silence above 158. |
| EUR/USD | Neutral 1.1563–1.1700 | Low | 2 wk | ECB hike priced; AfD/French fiscal caps the euro; 1.17 = 200dma. | Lagarde guides to 3%; Bund–OAT blow-out. |
| USD (DXY) | Neutral; two-way | Low | 2–4 wk | Hawkish Fed is dollar-positive unless the independence channel dominates; −0.7% w/w despite hike repricing says the latter is live. | Cook removal; tariff-for-cuts follow-through. |
| Commodities | |||||
| Brent | Bullish skew — own calls, not futures | Med | 1–2 mo | Hormuz 5–7 mb/d vs 20; OPEC+ powerless; spec length only 15th pct; diesel cracks >$70; weekend escalation. | Oman transit maps / ceasefire; SPR action; demand destruction (Bernstein: China luxury fading). |
| Gold | Neutral near term; buy $4,300–4,350 | Med | 1–3 mo | Below 20/50/200dma; hike optionality is the headwind; CB buying and debasement narrative (Hartnett) the floor; Jefferies YE $4,500–4,650. | Soft CPI → fade hike → reclaim $4,500; hot CPI → $4,300 test. |
| Copper | Neutral; policy-driven | Low | 1–3 mo | Section 232 decision is the event; Comex 675kt stock; China rod rates <60% = price rationing demand; DRC/Chile supply tight. | 232 announcement either way. |
| Iron ore | Fade above $100 | Low | 1–3 mo | Weakest July steel since 2017; contractionary steel PMI; elevated port stocks; Westpac Q4 $97. | Property stimulus; Simandou delays; Vale guidance cut deepens. |
| Credit & digital assets | |||||
| US credit | UW HY/CCC; prefer 3–5y IG | Med | 1–3 mo | HY 265bp with a live hike; CCC ~850bp is where stress lives; private credit gates (BCRED); $215bn Sep IG supply; UBS cut HY. | Fed hold + soft CPI compresses; spreads >300bp would be a buy. |
| Bitcoin | Range $78–83k; buy $76–78k, don't chase | Low | 2–4 wk | ETF inflows $3.8bn/3 wks, Strategy buying; but trading as high-beta rates asset; funding neutral (4.4% ann.); CLARITY cloture 15 Sep is binary. | Volume break of $83k → $86k; FOMC hike → $74k; cloture fails → sentiment hit. |
| Ether / alts | Neutral; ETH capped $2,500 | Low | 2–4 wk | ETH ETF flows slowed ($215m vs $816m); BNB +8.5% w/w the outlier; SOL ETFs trickle. | ETH reclaims $2,500 on volume; SEC Reg Crypto Assets finalisation timeline. |
Portfolio-level read. The book that fits this tape is low gross, long convexity, long energy optionality, short the yen carry, and neutral-to-long duration in the belly funded from the long end. Two things are cheap relative to the risk they cover: equity skew and OAT–Bund wideners. Two things are expensive: unhedged AI beta and CCC credit. The event path is asymmetric in time — the next four sessions are dominated by auctions and the ECB; Friday's CPI then sets up an 11-session sequence (CLARITY cloture, FOMC, BoE, BoJ, opex, RBA) that will resolve most of the questions in this note.
These are analytical framings for a professional reader, expressed in the vernacular of a macro desk; they are not personalised investment advice and carry no position sizing. The "what changes the view" column is the accountability mechanism — each view is logged and scored in the project's views ledger.
Positioning, flows & sentiment
| Indicator | Latest | Change / context | Read |
|---|---|---|---|
| CFTC positioning — data as of Tue 1 Sep, released Fri 4 Sep | |||
| S&P e-mini — leveraged funds net | −317.6k | Both sides added ~15–17k | Asset managers +934k; legacy non-commercial −75.9k (from −68k) |
| Nasdaq-100 mini — LF net | −14.1k | Shorts cut 23.6k | Largest covering in the set |
| Russell 2000 — LF net | −109.5k | Shorts +13.8k | Most stretched equity short |
| UST 10y — LF net | −2.063m | Modest covering (−12k shorts) | 2y −1.268m; ultra-10 −423k; bond −303k — basis trade at full stretch |
| JPY — LF net | −102.2k | Shorts +17.1k | Re-extended into the BoJ; non-commercial −92.2k (30th pct) |
| AUD · GBP · CAD · MXN (non-comm.) | −39.4k · −49.6k · −108.1k · +93.2k | COT idx 97% · 8% · 25% · 0% | AUD short and MXN long at extremes |
| Gold — managed money net | +228.1k | −15.2k (largest cut since Feb) | Still 96th pct; 149.7k L / 13.0k S |
| WTI — non-commercial net | +129.9k | +6.5k | Only 15th pct despite +10% week — not crowded |
| Copper · Silver · Bitcoin | +80.9k · +26.7k · +703 | COT idx 6% · 0% · — | Metals longs stretched; BTC futures negligible |
| Flows | |||
| BofA Flow Show (EPFR, w/e 2 Sep) | Cash +$30.0bn · Bonds +$18.3bn · Gold +$3.2bn · Equities +$2.8bn · Crypto +$0.5bn | Equity inflow smallest in 9 wks | US equities −$5.9bn (2nd wk); EM −$5.4bn; China −$5.3bn (5th wk); Japan +$1.4bn; IG +$9.2bn (22nd wk); loans −$0.6bn (first outflow in 13 wks); tech −$1.5bn |
| ICI money-market assets | $7.979trn | +$44.8bn w/w | Institutional $4.865trn; retail $3.114trn — cash keeps growing at 3.6% SOFR |
| Spot BTC ETFs (Farside) | +$986.7m (w/e 4 Sep) | 3-wk run $3.8bn | Thu +$731m best since 14 Jan; Fri only IBIT/FBTC; AUM ~$103bn; August +$3.5bn best since Oct 2025 |
| Spot ETH / SOL ETFs | +$215m / +$11m | ETH from +$816m prior wk | Cumulative ETH $13.19bn |
| Sentiment & surveys | |||
| BofA FMS (Aug) | Cash 3.5% · equities net +56% OW | Highest equity OW since Nov 2021 | Most crowded: long semis 53%; tail risks: AI bubble 32%, disorderly yields 27%, second inflation wave 25%; "no landing" 56% (record); 72% expect no hike pre-midterms; gold most undervalued since Mar 2023 |
| BofA Bull & Bear | 9.5 | Highest since 2021 | "Sell" since 26 May; positioning 99th pct, flows 93rd, HF exposure 83rd |
| AAII (w/e 3 Sep) | Bulls 39.7% · Bears 37.6% | Spread +2.2 vs +6.5 avg | Bears above average 30 straight weeks — retail is not the marginal buyer |
| Options / vol | P/C equity 0.58 · VIX 14.53 · VIX3M 17.61 | Skew, VVIX 1st pct | Sep VIX future 16.27, Oct 18.14; 5-day P/C 0.82 "one of lowest in years" |
| Fear & Greed (replica) | 46 Neutral | 50 a week ago, 72 a month ago | Price strength 24, breadth 30 — momentum has cooled under the index |
| Breadth / technicals | RSI 55.7; MACD rolled over | Russell 3000 % above 50d lowest since early Apr | 7 of 11 sectors down on week; zero 80% down-volume days in ~1 yr; RSP +16.5% YTD |
| Systematic / corporate | CTAs "rebuilt", not stretched | Leveraged-ETF AUM −$70bn (−31%) from June peak | Blackout ~12 Sep; $9.6trn options expire through 18 Sep incl. record $6.2trn; pensions 112% funded |
| Valuation & earnings (FactSet, 4 Sep) | |||
| S&P 500 forward P/E | 19.5× | 5-yr 19.8 · 10-yr 19.0 | Bottom-up target 9,240 (+19%) |
| Q3 EPS growth estimate | +28.5% | from +26.6% on 30 Jun | Second straight quarter of rising estimates; energy +102.5%, IT +62.6%; financials +3.6%; guidance 70 positive / 41 negative |
| CY26 / CY27 EPS growth | +31.5% / +15.0% | Q2: 87% beat EPS, 77% beat revenue | |
The week ahead
| Day | AEST | EDT | Event | Cons. | Prior | Imp. |
|---|---|---|---|---|---|---|
| Monday 7 September — US Labor Day (cash closed) · Canada closed · Fed blackout | ||||||
| Mon | 11:30 | Sun 21:30 | AU ANZ-Indeed job ads (Aug) | L | ||
| Mon | day | — | China FX reserves (Aug) · Bathla Group creditors meeting (Sydney) · Bund/DAX open after Saxony-Anhalt (16:00 AEST) | M | ||
| Mon | 16:00 | 02:00 | Germany industrial production (Jul) m/m | +0.3% | +0.2% | M |
| Mon | 18:30 / 19:00 | 04:30 / 05:00 | EZ Sentix (Sep) · EZ Q2 GDP final & employment | +0.4% q/q | L | |
| Tuesday 8 September — Canada's C$19.9bn counter-tariffs take effect · US IG issuance reopens | ||||||
| Tue | 09:30 / 09:50 | Mon 19:30 / 19:50 | Japan labour cash earnings (Jul) · Q2 GDP second estimate q/q · current account (Jul) | +3.9% · +0.4% | +3.4% · +0.3% | M |
| Tue | 10:30 | Mon 20:30 | AU Westpac-MI consumer sentiment (Sep) | ~85.7 | 88.9 | M |
| Tue | 11:30 | Mon 21:30 | AU NAB business survey (Aug) — confidence / conditions · building approvals final | ~−8 | −6 | M |
| Tue | ~13:00 | Mon 23:00 | China trade (Aug) — surplus; exports / imports y/y | $108–120bn | $112.5bn; +23.9% / +27.7% | H |
| Tue | 13:20 | Mon 23:20 | RBA Hunter (Assistant Governor, Economic) — AFR Property Summit fireside | H | ||
| Tue | evening | ~05:30 | RBA Hauser (Deputy Governor) — ABC 7.30 | M | ||
| Tue | 20:00 | 06:00 | US NFIB small business (Aug) | 99.3 | 99.8 | L |
| Tue | 01:00 Wed | 11:00 | NY Fed consumer inflation expectations (Aug), 1-yr | 3.6% | M | |
| Tue | 03:00 Wed | 13:00 | UST 3-year auction (~$58bn) | 4.291% | M | |
| Tue | 05:00 Wed | 15:00 | US consumer credit (Jul) · Korea Q2 GDP revision · Taiwan CPI (Aug) | L | ||
| Wednesday 9 September | ||||||
| Wed | 11:30 | Tue 21:30 | China CPI / PPI (Aug) y/y | 0.9% / 3.6% | 0.5% / 3.5% | H |
| Wed | day | — | Taiwan trade (Aug) · Poland NBP decision · Japan Eco Watchers (unconfirmed) | TW surplus $17.2bn | L | |
| Wed | 22:00 | 08:00 | Mexico CPI (Aug) y/y · core | 3.3% · 3.9% | 3.12% · 3.95% | M |
| Wed | 01:00 Thu | 11:00 | US Treasury long-end buyback announcement (doubled to ≥$4bn per op, 9 Sep–4 Nov) | M | ||
| Wed | 03:00 Thu | 13:00 | UST 10-year reopening (~$42bn) · Apple event "Surprise and shine" (Ternus; iPhone 18 Pro, foldable) | 4.683% | H | |
| Thursday 10 September — ECB day | ||||||
| Thu | 16:00 | 02:00 | Germany final CPI (Aug) y/y · Norway CPI-ATE y/y | 2.9% · 3.1% | 2.8% · 2.7% | M |
| Thu | 21:00 | 07:00 | Turkey CBRT decision (date per calendar sources; unconfirmed) | 37.0% | 37.0% | L |
| Thu | 22:15 | 08:15 | ECB decision — deposit rate (Berlin; staff projections) | 2.50% | 2.25% | H |
| Thu | 22:30 | 08:30 | US PPI (Aug) m/m · core m/m · initial claims | +0.3% · +0.3% · 205k | 0.0% · +0.2% · 206k | H |
| Thu | 22:45 | 08:45 | Lagarde press conference | H | ||
| Thu | 00:00 Fri | 10:00 | US wholesale inventories (Jul) · existing home sales (per two calendars) | 3.98m | 4.06m | L |
| Thu | 03:00 Fri | 13:00 | UST 30-year reopening (~$25bn) | 5.216% | H | |
| Thu | ~06:05 Fri | ~16:05 | Oracle FQ1 (EPS $1.74 / rev $19.1bn; RPO $638bn) · Adobe FQ3 (EPS ~$6.08) · Copart | M | ||
| Friday 11 September — US CPI day | ||||||
| Fri | 16:00 | 02:00 | UK GDP (Jul) m/m · 3m/3m · IP · construction · trade | −0.2% · 0.0% | +0.3% · +0.4% | H |
| Fri | 20:30 / 22:00 | 06:30 / 08:00 | Russia CBR decision · Brazil IPCA (Aug) y/y | — · 4.2% | — · 4.44% | M |
| Fri | 22:30 | 08:30 | US CPI (Aug) — headline m/m · y/y · core m/m · core y/y | +0.4% · 3.4% · +0.2% · 2.4% | +0.1% · 3.4% · +0.2% · 2.5% | H |
| Fri | 00:00 Sat | 10:00 | UMich sentiment prelim (Sep) · 1-yr inflation expectations · Kroger earnings | 51.0 | 51.7 · 4.0% | M |
| Sat | 17:30 | 03:30 | Lagarde speaks · China credit data (Thu–Sat window; new loans ~RMB500bn) | L | ||
| The eleven sessions after CPI — the decision cluster | ||||||
| Tue 15 | 04:15 Wed | 14:15 | Senate cloture vote on the CLARITY Act (needs 60) · UK labour data · German ZEW · NL Prinsjesdag | H | ||
| Wed 16 | 04:00 Thu | 14:00 | FOMC decision + SEP/dots (Warsh presser 14:30 EDT) · US retail sales (Aug) 08:30 · Brazil Copom · UK CPI (Aug) | 58% hike | 3.50–3.75% | H |
| Thu 17 | 21:00 | 07:00 | BoE decision (hold expected; hike fully priced by year-end) · Fed blackout ends | 3.75% | 3.75% | H |
| Fri 18 | ~13:00 · 09:30 | Thu 23:00 | BoJ decision (+25bp priced 63–75%) · RBA Bullock House testimony 09:30 AEST · US quad witching — record $6.2trn expiry | 1.25% | 1.00% | H |
| 21–24 | China LPR (Mon 21) · BI (Wed 23) · SNB, Riksbank, Norges, Banxico (Thu 24) · AU Aug labour force (Thu 24) · reported Xi visit to Washington ~24 Sep (unconfirmed) | M | ||||
| 28–30 | 14:30 Tue | RBA decision Tue 29 Sep (58–66% hike) · AU Aug CPI Wed 30 Sep · France 2027 budget presentation (~30 Sep, single source) · US FY-end (CR to 11 Dec passed House) | 4.60%? | 4.35% | H | |
Consensus figures are drawn from Trading Economics, ForexFactory, Newsquawk and Kiplinger calendars as of 4–6 September and can shift; where calendars disagree the range is shown. AEST = EDT + 14h until Sydney DST begins on 4 October (then +15h).
Risk radar
| # | Risk | Trigger / timing | Probability | Market impact if realised | Cheapest hedge / expression |
|---|---|---|---|---|---|
| 1 | Fed hikes 16 Sep | Hot CPI Fri 11 Sep (core ≥0.3%) | 58% (futures); Kalshi 50%, Polymarket 53% | 2y 4.50%+, bear flattener, USD +, gold/BTC −, S&P −2–4%, HY wider | SPX puts (skew 1st pct); 2y payers |
| 2 | Soft CPI squeeze | Core ≤0.2% and headline ≤0.3% | — (consensus core 0.2%) | 10y −15–25bp vs 2.06m LF short; yen and AUD squeeze; equity melt-up into blackout | Long belly; short USD/JPY; upside call spreads |
| 3 | Hormuz infrastructure escalation | Strikes on Kharg/Gulf export terminals; mining of the Strait; Iranian "restricted zone" enforcement | — | Brent $110+; diesel-led inflation; global hike repricing; EM importers (India, Turkey) hit | Brent call spreads; long energy equities/LNG exporters; short INR |
| 4 | Global long-end disorder | 10y >5%, 30y >5.5%; JGB 30y >4.2%; tailed auctions Tue–Thu | LPL: 5% = "tipping point" | Equity multiple compression (LPL: SPX–yield correlation negative above 4.3%); MOVE spike; gilt/OAT contagion | 5s30s steepeners; low duration; long vol |
| 5 | European political shock | AfD majority in Saxony-Anhalt; French budget censure (~30 Sep); Moody's/S&P France reviews | GS: 100bp OAT–Bund = stress scenario | OAT–Bund 100bp+, DAX de-rating, euro lower, Bund bid | OAT–Bund wideners; DAX puts |
| 6 | AI capex financing crack | Oracle Thu (BBB−); private-credit gating spreads; IG supply indigestion | FMS: top tail risk (32%) | Semis/hyperscaler de-rating; BBB/CCC widening; BDC marks | Long enablers vs short debt-funded builders; CDX HY protection |
| 7 | Fed-independence escalation | Trump tariff-for-cuts follow-through; Cook removal attempt; Warsh named | — | Term premium up, USD down, gold up — the only route to a hawkish Fed being dollar-negative | Long gold on dips; steepeners |
| 8 | September technical air-pocket | Blackout ~12 Sep; $6.2trn opex 18 Sep; pension de-risking into quarter-end | Sep avg −1.1% (since 1928); midterm yrs −1.5% | −3–5% drawdown with low realised vol turning into a vol event | Reduce gross into 12–18 Sep; own convexity |
| 9 | BoJ 18 Sep + yen unwind | Hike plus hawkish guidance; MoF action >158 | Hike 63–75% priced | USD/JPY toward 150; Nikkei exporters −; carry unwind in EM/crypto; JGB super-long stress | Short USD/JPY; long Japan banks vs exporters |
| 10 | US–China truce collapse | Soybean purchase shortfall; chip-tariff plans; export-control tit-for-tat; Xi visit slips | — | KOSPI/TAIEX/semis hit; CNY reversal; AUD lower via China beta | AUD/USD puts; long H vs A |
| 11 | Trade retaliation cycle | Canada counter-tariffs Tue 8 Sep; Section 232 copper decision; Section 122 appeal | — | CAD, autos, copper premium dislocations; inflation pass-through | Comex–LME spread; short CAD crosses |
| 12 | Midterm sweep | 3 Nov; generic ballot D+6.6 | Hartnett: sweep ~50% on prediction markets | >10% equity drawdown scenario (BofA); tariff/regulatory reversal; "gridlock = goldilocks" lost | Q4 collars; reduce policy-beneficiary exposure |
Key levels
| Instrument | Last | Support | Resistance | Comment |
|---|---|---|---|---|
| S&P 500 | 7,718.60 | 7,621 · 7,585 (50d) · 7,300 | 7,796 · 7,816.70 (ATH) · 7,900 | 200d 7,137; RSI 55.7; MACD rolled over |
| UST 10y | 4.78% | 4.73 (28 Aug) · 4.60 | 4.81 (cycle high) · 5.00 | LPL: SPX correlation negative above 4.3% |
| UST 2y | 4.37% | 4.25 | 4.50 | 52-week high; ~1.5 hikes priced by Dec |
| DXY | 99.17 | 98.5 | 100.0 | −0.7% on the week despite hike repricing |
| EUR/USD | 1.1613 | 1.1563 | 1.1650 · 1.1700 (200d) | |
| USD/JPY | 155.98 | 155.21 (Aug low) · 152 | 158 · 160 (intervention zone) | JPM unwind scenario 142–146 |
| AUD/USD | 0.7197 | 0.7150 · 0.7100 | 0.7250 · 0.7300 | Four-month high; spec short 97th pct |
| Brent | $96.52 | 92 · 88 | 100 · Jul-24 high region | Week +7.6%; ATH $147.50 (Jul 2008) |
| Gold | $4,425 | 4,365 (Fri low) · 4,300 | 4,497 (20d) · 4,541 (200d) · 4,600 | ATH ~$5,590–5,608 (Jan) |
| Bitcoin | $80,196 | 78,000 · 74,000 | 82,500 · 83,000 · 86,000 | Late-Aug low $63.5k; Oct-25 ATH $126k |
| ASX 200 | 9,005.9 | 9,000 · 8,900 | 9,092 (28 Aug) · 9,200 | SPI 9,002; ASX VIX 10.6 |
| ACGB 10y | 5.19% | 5.00 | 5.25 (15-yr high, intraday) | 3s10s ~43bp |
| Iron ore | $99.57 | 95 · 90 | 100 · 105 | Westpac Q4 $97 |
Data notes & sources
Verification notes
Every figure in this note was retrieved on 7 September 2026 from the sources below; nothing is from memory. Where two sources disagreed the note uses the primary or Reuters-cited value and flags the alternative: WTI $91.48 (Reuters settle) vs $92.15 (Trading Economics, different roll); Brent $96.28 (Reuters) vs $95.63 (Rio Times); gold spot $4,419 vs Comex Dec $4,476.60 — the ABC's $4,428 is a different print time; gold ATH $5,589.38 (Investing News, 28 Jan) vs $5,608.35 (Trading Economics, likely intraday/futures); Fed September hike odds 49–65% across CME/CNN/swaps/Investing.com snapshots — the note uses 58.4% (Investing.com Fed Rate Monitor, 5 Sep 00:35 ET); RBA September odds 58% (swaps) to 70% (ABC); OAT–Bund 84.7bp (ideal-investisseur) vs ~86.7bp (TE closes); China trade consensus $120.1bn (TE) vs $108.6bn (Newsquawk); DAX close 26,046–26,054 by source. The ABC live blog's Brent print of $92.68 is inconsistent with all other sources and was discarded. Weekly changes for several FX pairs, European and Australian yields, and some commodities could not be computed from verified 28 August closes and are shown as approximate or replaced by the nearest published measure. Single-source items that should be re-verified: UK Budget 28 October; France budget presentation ~30 September; Xi visit ~24 September; CBRT meeting Thursday; Governor Cook removal notice; Australian budget measures (Wikipedia). Saxony-Anhalt figures are ARD projections, not the official count. The search budget for this session was exhausted late in research; the remaining verification was done via direct fetches of primary pages (gov.uk, Trading Economics, Investing.com, ABC).
United States, Fed & positioning
- BLS — Employment Situation, August 2026
- CNBC — August jobs report
- TheStreet — market close 4 Sep
- Trading Economics — US stock market
- Federal Reserve — FOMC calendar
- Federal Reserve — 29 July statement
- Warsh — Jackson Hole, 28 Aug
- Waller — 3 Sep speech
- Investing.com — Fed Rate Monitor
- US Treasury — auction schedule
- US Treasury — expanded buybacks
- ISM — Services PMI, August
- Beige Book — 2 Sep
- NPR — House passes CR
- CNN — Trump ties trade to Fed cuts
- Investing.com — Citi Fed call
- CFTC — Traders in Financial Futures
- FXStreet — COT report 4 Sep
- Citadel Securities — September setup
- Investing.com — BofA Flow Show
- Investing.com — BofA FMS August
- AAII — sentiment survey
- ICI — money market assets
- FactSet — Earnings Insight 4 Sep
- FactSet — hyperscaler financing
- Kiplinger — Nvidia earnings
Rates, FX & central banks
- Reuters via Yahoo — yen's best week
- investingLive — Monday indicative opens
- ECB — meeting calendar
- ECB — 11 June decision
- Reuters poll via FXStreet — ECB
- FXStreet — ECB preview
- Eurostat — August flash HICP
- BoJ — meeting schedule
- Reuters via Yahoo — BoJ September debate
- Reuters via Yahoo — Japan budget requests
- BoE — July MPC summary
- BoE — MPC dates
- gov.uk — ministers (PM Burnham, Chancellor Healey)
- Bank of Canada — 2 Sep decision
- RBNZ — OCR to 2.75%
- Trading Economics — Bund · OAT · BTP · Gilt · JGB
- Euronews — European bond sell-off
- Bloomberg — Fitch on France
Australia, New Zealand & Asia
- RBA — 11 August decision · press conference · meeting schedule
- ABS — National Accounts Q2 · July CPI · July labour force
- ABC — Q2 GDP · ABC — Monday markets live
- Market Index — ASX Friday · weekend wrap
- IG — week ahead · FNArena — next week
- Aussie — bank RBA calls
- Westpac IQ — commodities update
- Trading Economics — ACGB · AUD · iron ore
- ActionForex — RBNZ review
- Trading Economics — Nikkei · Hang Seng · Korea exports
- Tradingpedia — PBoC fix · Lundgreen's — China week
- Investing.com — Japan–US pact
Europe & geopolitics
- Euronews — Saxony-Anhalt · NPR
- Reuters via Investing.com — US strikes three tankers
- Al Jazeera — Iran war live · no nuclear deal
- CNBC — Hormuz flows
- Kyiv Independent — Witkoff/Kushner talks
- CNBC — French budget
- Share Talk — gilts after Burnham
- Trading Economics — European equities
- Newsquawk — week in focus
Commodities, credit & digital assets
- Reuters via AOL — oil weekly · Trading Economics — Brent
- Reuters via Business Recorder — OPEC+ decision
- OilPrice — diesel crunch
- Reuters via MarketScreener — gold · Trading Economics — gold
- LME — copper · ConnectOre — copper weekly
- FRED — IG OAS · HY OAS
- Bloomberg via Advisor Perspectives — IG issuance · Bloomberg — BCRED
- CoinGecko · Farside — BTC ETF flows · ETH ETF flows
- CoinDesk — CLARITY Act · Federal Register — GENIUS rules · SEC — Regulation Crypto Assets
- Motley Fool — Strategy purchase
- ASIC — digital asset licensing