Nomura: Reserve Bank of India keeps rates unchanged, focuses on growth and inflation risks

Japan’s two largest securities firms expect the rally in the Japanese stock market to last a long time, through to 2027, but warn that a reversal in artificial intelligence (AI) investments could become the biggest potential threat. “Markets, share prices, and corporate earnings have all been strongly driven by AI investments,” Nomura CEO Kentaro Okuda said on Thursday. “If market sentiment towards AI shifts and this trend reverses, I believe it could pose a significant risk.” Akihiko Ogino, CEO of Daiwa Securities, expressed a similar opinion during the same discussion. Both executives forecast that the Nikkei 225 index will reach 80,000 points, though their timelines differ: Ogino expects the target to be achieved this year, while Okuda forecasts the index to reach around 75,000 points by the end of the year and surpass 80,000 by the end of 2027.

ING analyst Chris Turner stated that the Federal Reserve's September meeting minutes indicate the Fed still expects another interest rate hike this year, which continues to support the US dollar. Currently, the money market has priced in a 25 basis point rate hike in December and further policy tightening expected in 2027. ING believes that the market's expectations for rate hikes are overly aggressive, but a significant correction is unlikely in the short term. In addition, last night’s US 10-year Treasury auction performed strongly, with a high bid-to-cover ratio and robust indirect demand, indicating that as long as yields are high enough, there remains strong market demand for US Treasuries. This has provided solid support for the US dollar and has further boosted it in a somewhat challenging investment environment. Elevated US Treasury yields and increased market volatility have led to capital outflows from arbitrage trades, significantly impacting most Latin American currencies. Given the recent situation in Europe, we expect the US dollar to maintain its upward trend in the coming months.

Shipping giant Maersk will increase the Emergency Fuel Surcharge (EFS) to 20%, effective from October 12, 2026.

The New Zealand dollar gave up earlier gains and turned lower against the US dollar during Thursday’s European morning session as market sentiment weakened. Escalating tensions in the Middle East drove oil prices higher, which in turn pushed up US Treasury yields and limited the dollar's decline after it weakened during the Asian session. Another attack by the Houthi rebels in Yemen on a Saudi airport further pushed oil prices higher. With concerns rising over potential further attacks on Saudi oil facilities and potential supply constraints, Brent crude oil prices rose to near $102 per barrel. The rally in oil also lifted US Treasury yields, as markets believed elevated energy prices would force central banks to tighten monetary policy. This offset the slight weakness in the dollar following the release of the US Federal Reserve’s September meeting minutes. The minutes showed that the Fed remains concerned about inflation, but did not alter market expectations that rates would be held steady in October.