21 September 2026
This week’s focus will be on preliminary PMIs on Wednesday, the Trump–Xi meeting on Thursday, and a busy schedule of central bank speakers.
Today brings UK housing market data, alongside remarks from the Fed’s Goolsbee and several ECB officials, including Lagarde, Cipollone, Kazimir and Dolenc. Eurozone consumer confidence follows on Tuesday, with further comments from Fed officials Williams, Jefferson and Barkin, and ECB policymakers Buch, Sleijpen, Nagel and Kaasik. Wednesday brings US mortgage applications, the OECD’s Interim Economic Outlook and further Fed and ECB commentary. Thursday’s data calendar includes the ECB Economic Bulletin, German IFO business climate, US new home sales and jobless claims. We also have a particularly busy line-up of central bank speakers including the BoE’s Breeden and Dhringra, the Fed’s Williams, Hammack, Paulson and Barkin, and ECB’s Lane, Schnabel and Lombardelli. The week closes with the University of Michigan consumer sentiment survey and US durable goods orders.
Last week, global markets were dominated by a coordinated shift towards tighter monetary policy. The Fed raised rates by 25bps, to the 3.75%–4.00% range, in its first hike since 2023, with the 12–0 decision reflecting persistent inflation and resilient economic activity. Core inflation remains around 3.4%, while the latest projections point to a further hike before year-end.
The ECB also raised rates by 25bps to 2.50%, citing renewed inflationary pressure from higher energy costs, while maintaining a data-dependent approach. The BoJ followed with a 25bps increase to 1.25%, its highest level in 31 years. The yen nevertheless weakened towards 157 per dollar as the wide US-Japan rate differential remained in place.
US data reinforced the picture of resilient demand, with August retail sales rising 1.2% month-on-month, well ahead of expectations, while the control group increased 1.4%. The labour market remained relatively resilient, although the broader data were mixed, with Empire manufacturing, housing, industrial production and manufacturing output all disappointing.
Markets responded with higher bond yields and a firmer dollar. The S&P Index closed marginally lower despite a pick-up in risk sentiment towards the end of the week. Having surged to 5.04% intra-week, the US 10-year Treasury yield closed the week only slightly higher at ~5%. Brent eased to $103.87pb despite continued disruption to energy flows in the Middle East including an outage at a key Saudi pipeline. Quarterly triple-witching also contributed to unusually high trading volumes, with around $7 trillion of US options expiring.
In China, a nationwide expansion of cross-border cash-pooling rules took effect on 14 September, allowing eligible multinationals to manage renminbi and foreign-currency funds more centrally and consolidate certain cross-border financing arrangements. The PBOC subsequently left the one- and five-year LPRs unchanged for a 16th consecutive month at 3.0% and 3.5%, respectively, despite continued renminbi strength. The renminbi closed the week at 6.694 per dollar, its strongest level in more than three and a half years.