Drivers for the Week of September 28, 2026

US economic resilience and renewed inflation pressure should keep major central banks hawkish, supporting the dollar while limiting its upside and bolstering the Australian dollar.

• The DXY rose near a one-month high as the 10-year Treasury yield broke above 5.00%, driven by higher real yields rather than a rise in 5y5y inflation swaps.
• US economic momentum exceeds that of the Eurozone, the UK, and Japan; foreign investors accumulated $1,754 billion of long-term US securities in the 12 months to July, more than twice the $743 billion US trade deficit.
• September US nonfarm payrolls are expected to rise by 90,000 after 162,000 in August, while unemployment should remain at 4.1%; August core PCE is forecast at 3.3% year over year and real personal spending at 0.5% month over month.
• Eurozone headline CPI is expected to accelerate to 3.7% year over year from 3.2%, with core CPI rising to 2.5%; swaps price almost 100 basis points of ECB tightening over the next year, implying a policy rate of 3.50%.
• The RBA is widely expected to raise its cash rate by 25 basis points to 4.60%, while futures price a 90% probability of that hike and 65 basis points of tightening over the next 12 months.

Takeaway: A hawkish US data mix should preserve the dollar’s yield advantage, but tightening by the ECB and RBA may cap further dollar gains; the August PCE revisions could make the US inflation signal less clear.