From Seekingalpha · Marc Chandler · · 1m 10s
October 2026 Monthly
Central banks signal rate hikes as emerging markets stabilize.
In brief
Central banks signal rate hikes as emerging markets stabilize. The third quarter ended with rate hikes by the Federal Reserve, European Central Bank, and Bank of Japan, with emerging market currencies showing slight resilience. Originally reported by Seekingalpha.
Central banks raise rates
The third quarter ended with rate hikes by the Federal Reserve, European Central Bank, and Bank of Japan.
Emerging markets show slight resilience
Emerging market economy currencies fared somewhat better collectively. The Chinese yuan, which accounts for almost 21% of the BCWI, rose by an insignificant 0.20% in September.
Bank of England signals upcoming hike
The Bank of England stood pat in September but seemed to signal a hike was coming, and the swaps market has a little more than an 85% chance that it will be delivered at the next meeting in early November.
Canada's two-year discount nears record
Canada's two-year discount reached and approached the 28-year high seen last year near 155 bp.
Yen funding shifts to other currencies
Some of the yen's funding role appeared to have been shifted to the Swiss franc and US dollar.
The takeaway
The third quarter ended with rate hikes by the Federal Reserve, European Central Bank, and Bank of Japan, with emerging market currencies showing slight resilience.
