The week ending 18 September was defined by a synchronised return to central bank tightening across the major economies. The Federal Reserve delivered a 25 basis point hike on 16 September — its first in three years — and signalled at least one further increase before year-end, while the ECB raised its deposit facility rate to 2.50% citing energy-driven inflation, and the Bank of Japan lifted its policy rate by 25 bps to 1.25%, its highest level in 31 years. Underlying all of this is the geopolitical shock from Middle East conflict keeping Brent crude above USD 103/bbl and WTI above USD 100/bbl, sustaining the inflation pulse that is forcing policymakers' hands even as growth concerns simmer. The VIX fell 4.1% to 14.81 on Friday, suggesting near-term US equity complacency, but the real stress is visible in sovereign bond markets with the US 10-year yield holding near 4.94% — uncomfortably close to the 5% threshold that rattled equities in prior episodes.
For Asia-Pacific markets opening this Monday, the cross-asset picture is mixed but skewed cautiously. The Nikkei surged 1.38% and the KOSPI jumped 2.66% on Friday, partly absorbing the BoJ hike with resilience, while the ASX 200 was essentially flat at 8,731.2, down just 0.01%, as commodity tailwinds from gold at USD 4,424.9/oz, copper at USD 6.615/lb and iron ore at USD 97.57/t provided partial offsets to rate-sensitivity headwinds. Bitcoin's rally above USD 80,900 and a 6.7% surge in Ethereum added a risk-on undercurrent to Friday's session, though European indices fell sharply — the DAX -1.60%, FTSE 100 -1.45% — serving as a warning that high-yield, high-energy-cost environments are compressing valuations outside tech. The key domestic event for Australian investors today is the scheduled speech by RBA Governor Bullock at 23:10 ET, which markets are treating as a high-impact event given growing bets on the RBA hiking to 4.60% or beyond.