Central Bank policy and macro stance in one view

Bias: Held the policy rate at 1.00% on 31 July 2026 as universally expected following June's hike to a 30-year high. Governor Kazuo Ueda hardened his hawkish signaling at the G20 finance ministers meeting in Asheville (1-3 Sept), confirming the BoJ will hold a thorough debate on a possible hike at the 17-18 September meeting. Board member Kazuyuki Masu reinforced this on 11 Sept, indicating policymakers will continue tightening and gradually reduce monetary support as underlying inflation approaches the 2% target.

No formal BoJ Board communication newer than the 11 Sept Masu remarks confirmed as of 11 Sept 2026, consistent with the pre-meeting blackout period ahead of 17-18 Sept. Market-implied probability of a September hike remains near 99%. Japan's 10Y JGB yield has crossed 3% for the first time since 1996; the Nikkei 225 fell about 2.2% on 11 Sept as elevated oil prices and rising global bond yields weighed on equities. Tokyo has intervened repeatedly to defend the yen against continued weakness pressure.

Bias: The Governing Council raised all three key ECB interest rates by 25bp on 10 September 2026 as widely expected, lifting the deposit facility to 2.50%, the main refinancing rate to 2.65% and the marginal lending rate to 2.90% (effective 16 Sept), citing continued Middle East-driven inflation pressure. Updated Eurosystem staff projections see headline inflation averaging 3.0% in 2026, 2.3% in 2027 and 2.0% in 2028, revised up from March on a higher energy-price path. The Council kept forward guidance data-dependent and meeting-by-meeting with no pre-commitment, and several economists now see this as the final hike of a short two-step campaign.

No newer official ECB communication confirmed as of 11 Sept 2026. Bund yields remain elevated alongside the broader global bond sell-off, and Brent's push above $100-108/bbl this week continues to reinforce the energy-driven inflation case underpinning the hike.

Bias: Held Bank Rate at 3.75% for a fifth straight meeting on 30 July 2026, with the hawkish dissent widening to 6-3 (Greene, Mann, Pill voting for an immediate hike to 4.00%), the largest hawkish minority of Bailey's tenure. In Treasury Committee oral evidence on 8 September 2026, Bailey told MPs the inflation outlook is now skewed to the upside, driven primarily by energy prices and uncertainty over how far that cost feeds through into broader inflation - a notable hardening versus his 28 Aug remarks downplaying second-round effects.

Next scheduled MPC decision remains 17 September 2026; markets still largely expect a hold at 3.75% at that meeting, though futures imply one hike by end-2026. UK Gilt yields remain elevated alongside the broader global bond sell-off, and Brent's push above $100-108/bbl this week adds to the energy-driven upside inflation risk Bailey flagged on 8 Sept.

Bias: Rate held at the zero bound with elevated FX-intervention readiness to counter safe-haven franc appreciation.

No newer official SNB communication confirmed as of 11 Sept 2026; the next quarterly assessment is scheduled for 25 September 2026, with a Reuters poll of economists expecting a hold at 0.00% through year-end. CHF's fundamental score remains solidly positive among G8 (strong GDP and manufacturing PMI, improving trade balance) even as rising unemployment (3.0%) is a mild offset. Renewed US-Iran escalation continues to revive some safe-haven demand for the franc, though the SNB's stated FX-intervention readiness continues to cap its ability to fully capture haven flows.

Bias: Hiked the OCR 25bp to 2.75% on 2 September 2026 in a unanimous decision (a firming from July's narrow 3-3 split hike), with Governor Anna Breman noting further hikes are likely though timing remains highly uncertain. The move followed headline inflation rising to 4.1% YoY in the June quarter, driven largely by fuel prices tied to the Middle East conflict.

No newer official RBNZ communication confirmed as of 11 Sept 2026; next decision is 28 October 2026. Rising unemployment (5.6% in June) remains a growing offsetting risk to further tightening. Renewed US-Iran escalation and broad risk-off tone remain a headwind for the risk-sensitive kiwi despite the hawkish OCR path.

Bias: Held the overnight rate at 2.25% for a seventh consecutive decision on 2 September 2026 (Bank Rate 2.50%, deposit rate 2.20%), citing continuing Middle East conflict keeping energy prices high and the breakdown of Canada-US trade talks, with new US tariffs and Canadian counter-measures both announced. The Bank pointed to a stronger-than-expected economy (Q2 GDP grew 3.3% annualized) as a reason for the hold, but explicitly warned that persistent tariff and oil-price pressures raise the risk that inflation moves higher rather than settling near the 2% target.

No newer official BoC communication confirmed as of 11 Sept 2026; next scheduled decision is 28 October 2026. WTI has traded in the high-$90s/bbl amid renewed US-Iran escalation, a positive terms-of-trade offset for CAD noted at the 2 Sept decision.

Bias: August CPI landed in line with consensus on 11 Sept (headline +0.4% m/m, 3.4% y/y) but core CPI ran hot at +0.3% m/m (0.1pt above forecast), 2.4% y/y in line. This was the final inflation print before the 15-16 Sept FOMC meeting and reinforced, rather than dispelled, the hike case following Chair Kevin Warsh's hawkish Jackson Hole keynote (28 Aug) and the blowout August payrolls report (4 Sept, +162k vs +53k consensus). Governor Waller had said his vote hinged on this release; Governor Barr has said the Fed should be prepared to hike if inflation fails to ease. CME FedWatch-implied hike odds jumped to roughly 85.6% after the CPI print, up sharply from about 55-70% earlier in the week.

August PPI (10 Sept) also showed accelerating wholesale energy-driven inflation. US 10Y Treasury yield sits near 4.94-4.97%, a multiyear high; 2Y yield near 4.39%, also multiyear highs, as short-end pricing catches up to hike odds. Renewed US-Iran escalation (Brent above $100-108/bbl this week before a Friday pullback, Houthi strikes on Saudi energy facilities) continues to intertwine inflation-risk and safe-haven crosscurrents heading into the 15-16 Sept FOMC decision.

Bias: Held the cash rate at 4.35% on 11 August 2026 for a second straight meeting in a unanimous decision, but shifted its forward guidance meaningfully more hawkish, dropping its prior 'balanced' risk framing and flagging it will hike further if upside inflation risks materialise, with inflation not expected back at target midpoint until late 2027/early 2028.

No newer RBA communication confirmed as of 11 Sept 2026; next meeting is 29 September 2026. AUD's underlying fundamentals remain the weakest in the G8 set (rising unemployment to 4.5%, softening current account and trade balance, mixed PMIs), a clear divergence between hawkish policy tone and softer underlying data. Renewed US-Iran escalation (broad Asia-Pacific risk-off tone, Nikkei down ~2.2% on 11 Sept) is a fresh headwind for the risk-sensitive Aussie on top of that fundamental softness.