News & Reports Archives

The Bank of England Raises Interest Rates

Written by IntaCapital Swiss on November 6, 2026. Posted in News & Reports. Leave a Comment

5^th November 2026

Today, and for the first time since August 2023, the Bank of England’s (BEO) Monetary Policy Committee (MPC) voted by a majority of 8 votes to 1, to raise the base rate from 3.75% (held steady since December 2025) to 4.00%. The one dissenting voice was that of Catherine Mann, whilst she agreed with the interest hike, she wanted to raise the base rate by 50 basis points. She felt that the central bank had been somewhat slow to reassure markets that they had come to grips with inflation and that she was concerned with non-linear inflation risks*.

*Non-Linear Inflation Risks – Refers to the danger that inflation does not respond smoothly or proportionally to economic pressures, supply shocks, or output gaps. Instead, small changes in conditions can lead to minor or predictable price shifts up to a point, after which a severe threshold is breached – causing inflation to jump exponentially into double digits or become deeply persistent.

The decisive driver behind the rate increase was a spike in inflation where data for September confirmed it had spiked to 3.50% (3.10% in August), the usual culprit being the Middle East conflict and the subsequent price volatility in the global energy markets. Whilst the Federal Reserve and the ECB (European Central Bank) chose to keep interest rates on hold last week, officials have warned that if the Middle East conflict continues, then the central bank may well have to once again raise the base rate.

Officials also pointed out that inflation in the United Kingdom will increase by the middle of next year with the CPI (Consumer Price Index) reaching circa 5.00%, more than double that of the BOE’s benchmark target of 2.00%. Governor Andrew Bailey was moved to say, “Today’s increase shouldn’t be seen as the first in an inevitable long sequence of hikes. But unless the conflict in the Middle East is resolved, neither does it seem likely to be the last”. Indeed, Clare Lombardelli, the Deputy Governor of the BOE noted that a further rate hike was likely to be needed in the short-term.

Other members of the MPC remained divided in their thinking. While Chief Economist Huw Pill and external member Megan Greene (both of whom voted to raise rates in September) pointed to the need for additional hikes and further tightening, colleagues Alan Taylor and Swati Dhingra took a more dovish stance. Having both been reluctant to hike in the past, Taylor and Dhingra noted that they would need stronger evidence of second-round effects* before backing any further tightening by the committee.

*Second-Round Effects – In these scenarios, second round effects are price and wage-settings stemming from the current shock that have the potential to raise UK inflation beyond the near-term in a persistent manner.

Interestingly, in its last set of forecasts back in July of this year, the central bank noted inflation peaking at 3.20%, and with energy prices at a complete disparity with previous predictions by the BOE, further guidance by the MPC will say officials “continue to assess the evidence at each meeting, in particular how likely high energy prices are to feed through to other prices and the economy more broadly”. The MPC also noted that “the economy has proved less resilient than expected and as a result, while policy was restrictive before Thursday’s rate hike, it was less clear that this would impart insufficient disinflationary pressure to bring inflation back to target in a timely manner”.

Analysts advise that financial markets are backing a back to back interest hike especially after all MPC members backed a rate increase with one member (see above) calling for an even bigger increase. Before today’s interest rate decision, interest rate swaps were implying a 30% chance of a second rate hike in December, however, after today, the swap market is implying an even chance (50/50) of a rate hike. However, as of Tuesday/Wednesday when President Trump and the Republican party were thumped in the mid-terms, there has been a sharp fall in energy prices with the price of Benchmark Brent Crude Oil early today showing a 9.00% drop at $94.30 p/bl (per barrel) and WTI (West Texas Intermediate) dropping by circa 8.00% trading at 87.35p/bl.

However, despite incumbent and incoming Democratic lawmakers posturing as to how they will end the war next year once they are all entrenched in Congress in January 2027, political commentators point out that whilst they can thwart President Trump on domestic policy, they can only narrow his options on foreign policy and not close them off. Essentially, as President and Commander-in-Chief of the armed forces and until January, Trump can still continue the war with Iran, and probably after January when all the new lawmakers are in place. The Governor of the bank of England whilst welcoming the fall in oil prices has said, “what is the best thing that can happen? It is to resolve the war in the Middle East”. Hopefully, Congress and the President can work together, but many commentators and experts dismiss this theory as pure fantasy.

Bank of Japan Holds Interest Rates

Written by IntaCapital Swiss on November 2, 2026. Posted in News & Reports. Leave a Comment

30^th October 2026

Today, the Bank of Japan (BOJ’s) Policy Board with a vote of 8 – 1 held its benchmark interest rate (aka the uncollateralised overnight call rate) steady at 1.25%. The dissenting board member was Hajime Takata, who wanted the central bank to hike interest rates by 25 basis points to 1.50%. Officials noted that underlying inflation* was basically under control, but the central bank would continue its on-going fight against inflation, however future decisions will remain dependent upon data and how the economy develops.

*Underlying Inflation – Often referred to as “Core Inflation” strips away items with erratic or temporary price swings such as food and energy which includes gas, electricity, petrol and diesel. This allows central banks and economists to understand the true domestic trend. Such items underlying inflation measures are services which include restaurants, healthcare, travel (such as airlines, trains, buses), communications, rent, clothing, and household items.

*Headline Inflation – Measures the total change in prices across all goods and services in a standard consumer basket such as the CPI (Consumer Price Index). It includes everything consumers buy.

At a press conference, the Governor of the BOJ, Kazuo Ueda, signalled that the central bank could raise interest rates again as early as December after declaring that underlying inflation has generally reached the central bank’s target of 2.00%. He advised that the central bank could raise its policy rate further to prevent prices overshooting the target. Governor Ueda went on to say, “When it comes to achieving our target, it’s important to achieve inflation stably and sustainably. In that sense, we are not quite there yet. The key is for underlying inflation to become firmly anchored at 2.00%”.

The Governor went on to add, “ We saw the need to scrutinise a bit more economic and price risks, as well as financial conditions. But underlying inflation has reached levels consistent with our price target. Financial conditions remain accommodative. There are various upside risks. We must therefore be vigilant to the risk of inflation overshooting our target.” However, despite declaring that underlying inflation had hit the central bank’s target of 2.00%, Governor Ueda sent out positive signals for lifting the benchmark interest rate in December. He was quoted as saying, “At every policy meeting, including the next one, we will assess the likelihood of our outlook materialising, as well as risks, and make our decisions accordingly”.

Many experts, analysts and financial commentators agree that the BOJ will indeed raise interest rates in December, with financial markets currently pricing in an 80% chance of an interest rate hike of 25 basis points by the central bank. Analysts advise that financial markets have also priced in a total of 50 basis points increase in interest rates by September 2027. Indeed, in an updated quarterly report, the BOJ changed its inflation projections for 2027, forecasting an increase from 2.40% to 2.60% citing the rise in global oil prices as the guilty party.

Interestingly, the Japanese Prime Minister, Sanae Takaichi, has enjoyed a reputation as a staunch monetary-easing advocate, an exact opposite of the fiscal tightening currently being employed by the BOJ. However, experts advise that Prime Minister Takaichi is shifting away from her stand on monetary easing, because as of late October 2026, her administration has repeatedly emphasised that it fully respects the autonomy and policy independence of the Bank of Japan. Indeed, rather than publicly pushing back against monetary tightening, the Prime Minister and her cabinet have signalled that the Japanese economy has moved beyond the point of needing aggressive reflationary stimulus.

ECB Keeps Interest Rates on Hold

Written by IntaCapital Swiss on October 30, 2026. Posted in News & Reports. Leave a Comment

29^th October 2026

Today, in a well telegraphed move, the European Central Bank (ECB) left interest rates unchanged, but the big news was the announcement that the President of the ECB, Christine Lagarde, has resigned and will leave her post on 7^th February 2027, eight months before the expiry of her term. Today’s interest rate decision by the governing body was passed unanimously, leaving its Key Benchmark Deposit Rate Facility rate on hold at 2.50%, with the main financing operations rate and the marginal facility also held steady at 2.90% and 2.65% respectively*.

*ECB Interest Rates – The ECB has three interest rates; the Key Deposit Rate is the interest rate banks receive when they deposit money overnight with the ECB. The other two facilities are the Main Refinancing Operations, which is the rate the banks pay when they borrow money from the ECB for one week, and the Marginal Lending Facility is the rate banks pay when they borrow money overnight from the ECB.

In a post-meeting statement, ECB officials said, “The increased magnitude and duration of the energy shock, as well as implications for indirect and second round effects*, are likely to drive up inflation and lower growth. Financing conditions have tightened since the Governing Council’s last meeting, which is likely to weigh on inflation and growth”. The annual headline inflation rate within the eurozone accelerated for a third consecutive month to 3.80% in September (up 3.20% from the previous month), which is the highest since September 2023 and heading towards double the ECB inflation target of 2.00%.

*Second Round Effects – In these scenarios, second round effects are price and wage-settings stemming from the current shock that have the potential to raise Eurozone inflation beyond the near-term in a persistent manner.

Data released for underlying/core inflation (excludes volatility items such as food, energy, alcohol and tobacco) in the eurozone for September reflected a figure of 2.50%, up 0.10% from the previous month. ECB officials noted that, “While the full effects of the energy shock are still unfolding, underlying inflation has remained broadly stable so far and wages do not show a material response”. However, analysts point out that rising oil and gas prices will place negative pressure on inflation, and with the winter months just around the corner, consumer demand will be increasing along with increasing energy prices.

Christine Lagarde has announced she will leave the ECB in February next year, which has intensified the struggle to replace one of the world’s major financial and monetary policymakers. President Lagarde said, “I leave this institution with a sense of good work done, and an ECB that is fit for the future”. The two main protagonists for Lagarde’s position are the Netherlands’ Klaas Knot and Spain’s’ Pablo Hernandez de Cos, who is currently the head of the Bank for International Settlements (BIS), and the former chief of the Bank of Spain, and is currently considered by analysts to be the favourite for the job.

Speculation suggests that Christine Lagarde may well like to become the boss of the World Economic Forum which organises the annual Davos gathering, however she has indicated that she would like to play a role in the campaign for the next President of France, but rules out gunning for the top job. However, she has already incurred the wrath of the far right party with Jean-Phillipe Tanguay, who is charged with drafting the economic policy for Le Pen’s election manifesto, which said, “I saw this coming, another insult in our direction”.

Experts suggest that there will be another rate hike by the ECB at their next meeting in December, with officials prepared to hike interest rates if inflation does not improve. Financial markets have priced in an 85% chance of another 25 basis point increase before close of business 31^st December 2026. Indeed, Christine Lagarde commented today post-meeting that risks to the eurozone’s growth outlook remain tilted to the downside, while risks to inflation remain tilted to the upside, suggesting a rate increase come this December.

Federal Reserve Keeps Interest Rates on Hold

Written by IntaCapital Swiss on October 29, 2026. Posted in News & Reports. Leave a Comment

28^th October 2026

Today, the Federal Reserve’s Federal Open Market Committee (FOMC) by a vote of 10 – 2 kept interest rates on hold in a target range of 3.75% – 4.00%. The two dissenting members were Governor Lisa Cook and Cleveland Federal Reserve President, Beth Hammack, who both favoured an increase in rates of 25 basis points. However, officials noted that they were still committed to keeping inflation under control, but had no clear opinion as to whether or not interest rates would be raised at the next FOMC meeting in December.

Interestingly, the decision to keep rates on hold comes less than a week before the mid-term elections, where President Trump and the Republican Party are expected to lose control of the lower house, the upper house (the Senate) polls showing a leaning towards a Democrat majority. However, financial and political commentators have said there is no reason to believe that the vote was politically motivated, despite concerns over inflation where data released for the September Consumer Price Index (CPI) showed the index having risen at its fastest pace for five months.

Experts pointed out that the rise in the September CPI figures was driven to a greater extent by the on-going conflict with Iran, however, additional data released showed broad-based inflation across goods and services. Indeed, after the meeting, Chairman Warsh said, “Inflation is too high. Energy and related prices have moved higher again in recent weeks, and our job is to ensure that relative price changes in some sectors do not broaden out across the economy”. Financial markets had already expected today’s decision, as top officials had previously briefed that they saw no reason to raise rates again after a 25 basis point rise at the previous FOMC 15 – 16 September meeting, despite the fact that on-going inflation data was stronger than originally forecasted.

Furthermore, a FOMC policy statement said, “The accumulation of more information will help the committee determine the policy stance appropriate to ensure a timely return of inflation to the committee’s goal of 2.00%. The committee will deliver price stability”. Financial markets have already priced in a December interest rate increase despite the Federal Reserve’s commitment to further data before deciding on a rate increase. However, many experts suggest that inflation will not be falling. All in all, analysts suggest that this was a wait and see decision saying that a rate rise in December is a foregone conclusion, so why wait? Still, the spectre of politics looms over this decision, although Chairman Warsh was adamant that was not the case.

French Government Bonds Suffering From Investor Negativity

Written by IntaCapital Swiss on October 28, 2026. Posted in News & Reports. Leave a Comment

As last week drew to a close on Friday, 24th October, financial markets witnessed historic turbulence in French government bonds, with concerns regarding public debt and severe political unrest acting as the main culprits. Experts note that investors have growing doubts about the future of the French economy – citing a massive debt burden, sluggish growth, and demonstrations spilling over into the streets. Holders of 10-year bonds are now demanding a premium to hold French sovereign debt, with yields rising by as much as 13 basis points to 5.14%. Concurrently, the premium of French 10-year bonds over German Bunds widened by 19 basis points, driving the spread to 1.78 percentage points. The last time markets witnessed a spread of this magnitude was in 2011, when the Eurozone Debt Crisis* reached its zenith.

* Eurozone Debt Crisis – Reached a critical existential boiling point, morphing from an isolated, localised issue in Greece into a systemic threat that brought the single currency area to the brink of collapse. Contagion spread rapidly from smaller economies to larger ones such as Italy, Spain, and Portugal. Greece and Ireland both required bailouts in 2010, followed by Portugal in 2011.

The problem was that domestic banks held massive amounts of government debt, and as bond values rapidly headed south, banks neared insolvency, requiring government bailouts that plunged them deeper into debt. Furthermore, eurozone countries were trapped inside a shared single currency, and the heavily indebted nations (like Greece and Italy) could not artificially lower currency values to stimulate trade and export growth.

In the end, the European Central Bank (ECB) stepped in late December 2011 by deploying its Long-Term Refinancing Operation (LTRO), pumping circa EUR 490 Billion in ultra-cheap three-year loans directly into commercial banks, staving off what would have been a nightmare credit freeze. Ultimately, in 2012 ECB President Mario Draghi (in office 2011 – 2019) pledged “Whatever It Takes”, which finally turned the tide.

Experts suggest that France is facing one of its worst political and fiscal crises in recent memory, with the consequences reverberating through its government bond market. Indeed, rioting and protests throughout the country are the backlash against government austerity programmes putting on pressure to reduce the government deficit. The government hopes to bring the deficit down from 5.40% of GDP to 5.00% through 2027 via an EUR 54 Billion fiscal adjustment package. However, analysts advise that public debt is expected to breach 120% of GDP*, whilst annual interest payments are expected to hit circa EUR 92 Billion up from a previous estimate of circa EUR 79.20 Billion.

* EU Fiscal Rules – European Union fiscal rules dictate that member states must keep annual budget deficits below 3.00% of GDP and total public debt below 60.00% of GDP.

Even before the protests began, the French sovereign bond markets were already under pressure rattled by months of political and fiscal uncertainty. On Monday 19^th October, the yields on government bonds were already rising with the 10-year already up by 8 basis points to 4.86%, the 2-year yield rising to 3.64%, and the 30-year yield climbing to 5.40%. The French government bond market is making life difficult for the ECB because as the spread between French and German government bonds widens, the ECB is tasked on the one hand to prevent sovereign stress from accelerating whilst also tasked with taming inflation.

Analysts confirm that France has one of the highest deficit-to-GDP ratios within the eurozone and furthermore advise that the economy has literally slowed to a crawl – with the growth forecast for year-end 2026 being cut by the government to 0.50%. Financial markets feel that if borrowing costs stay high, then refinancing costs will be at a higher rate incurring heavier debt. Some political commentators think that French politicians will, given the current protests shy away from putting France on a sustainable debt reduction path, which according to analysts, may well increase sovereign bond yields as investors continue sell French government bonds/OAT*.

*OATS (Obligations assimilables du Trésor) – The primary medium and long-term sovereign debt instruments issued by the French government. These bonds are managed by the AFT (Agence France Tresor) and serve as the foundation bedrock for financing France’s state expenditure. Standard OATs are issued with fixed maturities ranging anywhere from 2 – 50 years.

However, it is not all doom and gloom, as last Friday 23^rd October, top ratings agency Moody’s spared France a credit rating downgrade leaving it at Aa3 (High Grade Investment Grade), which is equivalent to an AA- rating with Moody’s and S&P (Standard and Poors) rating agencies. However, bond markets had been pricing in a downgrade for France by Moody’s as the other two rating agencies had already downgraded Frances’ sovereign rating to A+ (Upper Medium Investment Grade). In a statement, Moody’s said that “The Aa3 rating assumes that a deficit reducing budget for 2027 will be adopted, while financing costs and social tensions will abate somewhat in the next few months”.

South Africa Could Regain Investment Grade Status

Written by IntaCapital Swiss on October 21, 2026. Posted in News & Reports. Leave a Comment

According to experts on South Africa’s economy, the country stands a good chance of regaining sovereign investment grade status by 2028. Next week, the South African Minister of Finance, Enoch Godongwana, will lay out his mid-term budget and he is expected to confirm continuing growth in the country’s budget surplus. He is also expected to give details on a fiscal framework that ensures long-term discipline. Coupled with expected budget surplus growth, this should help propel the country toward an upgrade in its sovereign credit rating.

Experts suggest that the upcoming budget announcements need to confirm debt service costs have topped out and will start to head south, whilst debt to GDP is on or expected to decline. Spreads in the Credit Default Market* suggests that financial markets are expecting two ratings companies, Moody’s Ratings and S&P Global ratings, to move South Africa’s current rating up one notch to just below investment grade status. Both Moody’s and S&P have given a “positive outlook” (up from stable) to South Africa’s credit assessment together with a current rating of Ba2 and BB respectively, with expected upward movement to Ba1 and BB+ respectively.

*Credit Default Swap spread (CDS) – When a country’s sovereign credit rating increases (or is expected to increase), its CDS spread narrows. A lower CDS spread means the market views the country/nation as less likely to default on financial obligations, reducing the annual insurance cost paid to protect against its debt.

A CDS is a financial derivative that allows an investor to transfer or “swap” the credit risk of a borrower with another party. A CDS is obtained by entering into a bilateral OTC (Over-the-Counter) derivative contract with an institutional counterparty such as a bank, a hedge fund or financial institution. JPMorgan Chase is currently widely recognised as the most active global dealer and writer of Credit Default Swaps, whilst other key market players are Goldman Sachs, Morgan Stanley and Citigroup.

For credit rating purposes, a more relevant measure of the debt service burden is interest costs as a percentage of consolidated government revenue. Experts note that this figure should land close to the 11% mark. Experts confirm that South Africa’s figures have been around the 18% – 19% mark, and the government will have to demonstrate that they are able to reduce this number. Analysts are suggesting a medium-term range of 16% – 17% would likely support a move by the rating companies to move the country back to an investment grade rating.

Trump, Putin and an Energy Deal

Written by IntaCapital Swiss on October 14, 2026. Posted in News & Reports. Leave a Comment

On Friday the 9^th of October and in one of biggest sanction busting deals on record, President Donald Trump suspended sanctions on exports of Russian diesel until the 7^th of April 2027, allowing Russia to release diesel into the United States and global markets. Russian diesel exporters immediately supplied 300,000 metric tons of diesel, with plans for up to 4.8 million metric tons. In exchange for this Russian gesture, President Trump demanded an immediate halt to Ukrainian drone strikes on Russian energy infrastructure, declaring last Sunday that an immediate energy ceasefire was in place. However, this sanction busting deal of the century has triggered a cascade of complications, diplomatic rifts and domestic political resistance.

Indeed, on Tuesday the 13^th of October 2026, a bipartisan coalition of 12 US senators (six Democrats and 6 Republicans) sent a heavily worded letter to President Trump demanding he cancels the deal with Russia. US lawmakers suggest this deal with Russia serves as a multi-billion dollar financial lifeline to Moscow that will directly fund Russia’s illegal war with Ukraine. Senators and other critics of this diesel deal argue that it contradicts the bipartisan Russian sanctions law that Trump signed into law a few weeks before he announced the deal with Putin, which required the lifting of sanctions. This deal also drew heavy criticism from the President of Ukraine, Volodymyr Zelensky, who relies on the US for military support. In his response, President Trump ripped into President Zelensky saying Ukraine should get a new President.

Indeed, it appears that the Ukrainian president is on a collision course with President Trump, whose relationship has been of a very up and down nature. Experts suggest that President Zelensky feels that the deal made with Moscow is more of a political nature rather than an effort to bring down the price of diesel at American gas stations. He feels, along with numerous other critics in the US and other countries, that this is just political grandstanding in the hope that the Republican party does not get humiliated at the mid-term elections on Tuesday the 3^rd of November. A number of well-known and seasoned political experts in the United States suggest the Republicans are ‘in for a beating’ and that the Russian diesel deal could backfire on Republicans who have a small majority, as disaffected voters could either stay away or transfer their vote to the Democrats.

In Europe, some European Union (EU) officials warned that the diesel deal President Trump has made will increase the fighting potential of Moscow’s war machine in its war with Ukraine. The deal has been badly received by EU foreign ministers, who point out this agreement with Moscow undermines transatlantic unity, especially at a time when Russia is intensifying attacks on Ukraine. The word coming out of the EU is that they will continue to apply and increase sanctions on Russia, despite the recent diesel deal struck between President Trump and President Putin. Indeed, High Representative Kaja Kalla recently opined, “The US is our biggest ally, but our message is clear: if we want to end this war, the only way we can do this is by putting more pressure on Russia”*.

*More pressure on Russia – On the sanctions front it should be pointed out that the EU has hardly covered itself in glory. Whilst the EU’s Foreign Ministers gathered in Luxembourg on Monday the 11^th of October regarding further sanctions on Russia and denouncing the Trump/Putin deal, data released shows the EU still imports circa 1 billion to 2 billion euros a month of Russian fossil fuels.

Experts in the diesel arena suggest that the diesel deal will have little effect on prices at the pumps and the squeeze on diesel is expected to carry on into 2027. The current high price of diesel in the US is down to President Trump, with experts saying that the war with Iran is responsible for the sky high prices. Interestingly, almost seven years ago, Nancy Pelosi (Former US House Speaker) in a heated White House meeting along with several US Officials, accused President Trump and his policies of favouring Russia and President Putin. President Trump has hailed the deal as an energy ceasefire but President Zelensky said Putin had not read the script and has continued attacking Kiev.

All in all, President Trump has failed to rid Iran of its leadership, in fact many analysts suggest that the government in Iran is even more hardline than before, and the current sanction busting diesel deal with Russia could well be his final nail in the coffin when the midterm elections arrive in less than three weeks. If the Democrats win, and win big, then experts advise if the Democrats win both houses, they will have the power to subpoena documents and testimony. Democrats have for two years been salivating over the prospect of impeaching President Trump and the diesel deal say experts may well have handed them the opportunity on a plate.

Reserve Bank of India Raises Interest Rates

Written by IntaCapital Swiss on October 8, 2026. Posted in News & Reports. Leave a Comment

7^th October 2026

Today, and for the first time in nearly four years, the Reserve Bank of India (RBI) raised its benchmark repo rate by 25 basis points to 5.50%. The six member Monetary Policy Committee (MPC) voted unanimously to raise rates, and by four votes to two to shift its stance from neutral to what officials describe as, “Calibrated Tightening*” in a bid to head off inflation. The last time the RBI raised its benchmark interest rate was back in February 2023, which marked the end of its post Covid-19 pandemic tightening cycle.

*Calibrated Tightening – A forward-looking monetary policy stance employed by central banks. It suggests a milder form of a rate hiking cycle, more data-dependent rather than a premeditated outlook. It also indicates that rate cuts are off the table and future interest rate policy will only involve rate increases or keeping interest rates on hold.

The Governor of the RBI, Sanjay Malhotra, said in a post meeting statement ,“the bank would strive for price and financial stability as both are essential for sustainable growth in the long run”. Indeed, the RBI ‘s projections for GDP for the year end 2026 were increased by 40 basis points to 7.1%, due to the economy outperforming expectations in Q1. Signals coming out of the RBI suggest that the central bank will use a mix of liquidity tools at their disposal to keep liquidity under control, whilst at the same time striving to curb the current excess volatility in the Indian Rupee.

Governor Malhotra also went on to say, “Given the current conditions, rate cuts are off the table in the near term and policy action ahead can only be a rate hike or pause, depending on the evolving conditions and the outlook. The duration and extent of rate hike policy cycle would be contingent on actual growth-inflation developments and outlook”. The Governor noted that inflation is becoming generalised with increased price pressure across a bigger segment of the CPI (Consumer Price Index) basket, whilst officials noted its projection for inflation had increased by 0.20% to 5.20%, up from 5.00%.

Some analysts are predicting a total of ¾ of 1.00% or 75 basis points of interest rate hikes in the current cycle, with one economist being quoted as saying the “RBI has prepared markets for a higher-for-longer interest rate environment”. Indeed, data released for August showed that consumer inflation had risen to 4.82%, which is now close to the upper-end of the central bank’s tolerance level. To add to inflation woes has been the Indian Rupee’s slide, which has made imports more expensive – the weakest monsoon in over a decade is also adding to the risks of higher food prices.

The United States/Iran conflict has weighed heavily on countries across the globe, and India is no different as increased energy prices have negatively impacted their economy. Analysts suggest that the number and size of rate increases will depend on how the global energy shock, food inflation, broader inflation dynamics and the global tightening cycle evolve in the coming months. Analysts and economists are at odds with each other in deciding how many hikes in the current cycle the RBI will deliver. One end suggests no more hikes, whilst the other suggests three hikes with other experts somewhere in the middle. However, the spectre of the US/Iran conflict which continues unabated and the conflicting diatribe coming out of Washington and the White House will keep everyone guessing.

Global Sell-Off of Government Bonds

Written by IntaCapital Swiss on October 7, 2026. Posted in News & Reports. Leave a Comment

The month of September 2026 saw a massive sell-off in global government bonds starting at the end of August and accelerating into September. Indeed, by the 2^{nd of} September, many governments were seeing an increase in their costs of borrowing as the global sell-off showed no signs of slowing down. Analysts advised that Japan’s 10-year bond yield hit 3.00% for the first time since 1996, which was a bit of a milestone considering the economy was emerging from a period of ultra-low interest rates.

In the United Kingdom, 10-year government bonds/gilts yields accelerated to just under 5.30%, its highest level since June 2008. Experts within the government bond arena advised that investors had been dumping bonds due to inflation fears and spiralling deficits. In France, the government was experiencing its highest borrowing costs since the GFC (Global Financial Crisis 2007 – 2009) with the 10-year government bond yield hitting 4.14%, its highest level since 2008 with public debt exceeding 118% of GDP*.

*European Union rules state that member states must keep annual budget deficits (net borrowing) below 3.00% of GDP, and total public deficit debt below 60.00% of GDP.

Throughout September, global government bonds continued their sell-off, and in the fourth week, yields on 5 to 30-year US Treasuries hit multiyear highs with the 30-year treasury hitting just under 5.50%, the highest since 2005. Once again, the sell-off was highlighted by investors’ concerns regarding increasing government debt and inflation fears, plus a fresh jump in oil prices. Indeed, one expert noted that since the start of the war with Iran on 28^th February 2026, one of the main drivers of treasury yields had been the price of oil.

Recently, borrowing costs within the Eurozone spiralled on the back of the 10-year US Treasury yield rising by 0.50% to 5.34%, a level last seen at the beginning of the 21^st century. Many experts advise that the US government bond market, currently valued at circa $32 trillion, is an anchor for global finance. Recently, selling in the US Treasury market spread to Europe and the United Kingdom, where the yield on the 30-year gilt climbed to just over 6.00%—its highest level since 1998.

Elsewhere in Europe, the Italian 10-year government bond saw yields up 0.50% to 4.69% with analysts advising government bonds within the eurozone were suffering from spillovers due to sell-offs in French government bonds. Indeed, French government bond (OAT*) yields recently hit their highest levels since 2002. A severe sell-off drove the 10-year yield close to 4.96%, pushing the yield spread over German Bunds past the 140–150 basis point mark – its widest margin since the 2012 Eurozone debt crisis.

*Obligations assimiliables du Tresor (OATs) are the primary medium and long-term sovereign debt instruments issued by the French government. These bonds are managed by the AFT (Agence France Tresor) and serve as the foundation bedrock for financing France’s state expenditure. Standard OATs are issued with fixed maturities ranging anywhere from 2 – 50 years.

Global government bonds are experiencing a high volatility sell off, pushing sovereign yields across developed economies to their highest levels in over twenty years. This dramatic rout is driven by a potent mix of surging energy prices stemming from the US/Iran/Israel conflict in the Middle East, ballooning government debt, and on-going inflation fears. Whilst yields have significantly spiked, which are offering long-term income investors an attractive entry point, current elevated bond volatility is disrupting broader financial markets, forcing a global re-evaluation of central bank rate paths.

Experts predict structural macroeconomic pressures will keep global sovereign bond yields elevated for the foreseeable future. They predict a return to the ultra-low rates of the 2010 – 2020 era is unlikely to return given the current fiscal realities.

Euro Area Inflation to Stay Elevated

Written by IntaCapital Swiss on September 23, 2026. Posted in News & Reports. Leave a Comment

Senior figures from the ECB (European Central Bank) suggest that there is a second round of increased energy prices, which they anticipate will lead to persistent, higher inflation with increased costs hitting consumers’ pockets. Indeed, the ECB’s Chief Economist Philip Lane said, “we are now witnessing a second wave of price rises, not only in oil but also in gas. We believe this second wave of energy price rises should lead to higher and more persistent inflation, before a decline toward our target from mid-2027 onwards.

Analysts suggest that following the last increase in interest rates on the 10^th September 2026, it is expected that the ECB will hike rates for the third time since the start of the US/Iran war on 28^th February this year, possibly as soon as next month. Experts suggest that in the coming months, inflation for Q4 in the Eurozone could reach as high as 4.00%, with the latest ECB projections suggesting the average rate of inflation for 2026 being circa 3.00%. However, recent data suggests the euro area is experiencing its highest inflation acceleration in nearly three years with headline consumer growth jumping to 3.30%.

Household costs for Q4 within the eurozone will be driven by rising inflation with distinct cost pressures concentrated in energy, housing and food. Data reveals nearly 46% of household consumption goes to housing, water, energy, food, non-alcoholic beverages and transport. Indeed, figures show that energy inflation hit 14.30% by the end of June 2026, and will only increase further going into winter. Some economists are predicting that a harsh winter will weigh heavily on the consumer’s pocket.