The Federal Reserve held its policy rate steady at 3.75–4.00% in a 10-2 vote on October 28, upgrading its economic outlook while signalling the door remains open for a 25 basis point December hike — markets are now pricing an 85–87% probability of that move. The Bank of England also held at 3.75% in a narrow 5-4 vote, while the ECB is expected to hold its deposit rate at 2.5% at today's October 29 meeting, with French sovereign debt stress tightening financial conditions across the euro area and adding complexity to any forward guidance. Elevated oil prices, driven by Middle East supply disruptions including Houthi attacks on Saudi refinery infrastructure, are sustaining inflation risk premiums across developed market central bank deliberations. Geopolitical risk premia remain embedded across energy, bonds and currencies as a result.
For Asia-Pacific markets opening Thursday, the Fed's hawkish hold delivered a measured relief rally — VIX fell 3.48% to 16.91 — but the 10-year US Treasury yield holding just below 5.00% at 4.99% keeps rate-sensitive sectors under pressure globally. The AUD firmed 0.50% to 0.7054 against the USD, a tailwind for Australian exporters priced in USD terms, while the Nikkei surged 1.73% and KOSPI jumped 3.09% overnight, reflecting broader risk-on sentiment. China's SSE slipped 1.33% and the Hang Seng fell 0.73%, capping enthusiasm for materials and resources names with heavy China demand exposure. The ASX 200 closed marginally lower at 8,847.3 (down 0.03%) ahead of these overnight developments, setting up a modestly constructive open today tempered by lingering rate and geopolitical uncertainty.