The Reserve Bank of Australia raised its cash rate target by 25 bps to 4.85% in a 6-3 majority decision, with three members voting to hold rates steady. The hike was in line with expectations, marking the fifth increase this year and taking borrowing costs to their highest since late 2008. The move reflects persistent, broad-based inflationary pressures, with elevated fuel and commodity prices amid the Middle East conflict, tighter domestic capacity constraints and AI-related demand for technology goods contributing to rising costs. Firms are also reporting rising costs and passing them on to consumers. Inflation is expected to remain above 3% over the coming year, reaching the top of the 2–3% target range only in late 2027, raising the risk that higher inflation expectations become embedded. Meanwhile, growth is expected to slow further, housing prices have fallen significantly and unemployment is projected to rise more than previously anticipated.

Hong Kong’s economy expanded 5.2% year-on-year in the third quarter of 2026, beating market expectations of 3.7% and accelerating from a downwardly revised 4.2% in the previous quarter, according to preliminary estimates. Government spending climbed to 1.7% after stalling in Q2, while gross domestic fixed capital formation nearly doubled its growth rate to 7.3% from 3.7%. In contrast, private consumption growth edged down to 2.8% from 2.9%. On the external front, exports of goods increased 30.4% from 28.9% in the previous quarter, while imports of goods rose to 29.9% from 29.3%. Looking ahead, Hong Kong’s growth momentum is expected to remain firm, supported by robust global AI investment, which should underpin merchandise exports, while continued growth in inbound tourism, cross-boundary travel and financial market activity is expected to support services exports. On a seasonally adjusted quarterly basis, GDP rebounded 1.9% in Q3, following an upwardly revised 1.7% decline in Q2.

Germany’s 10-year Bund yield climbed back above 3.3%, recovering slightly from two-month lows, as oil prices rebounded following reports of a US strike on Iran’s Qeshm Island and investors remained cautious ahead of Tuesday’s US midterm elections. German borrowing costs declined in October as a selloff in AI-related stocks drove investors towards safe-haven assets, while markets scaled back expectations for further ECB rate hikes. However, hawkish comments from ECB officials on Friday, hours after the bank left rates unchanged, suggested that monetary tightening may have been postponed rather than ruled out, keeping the possibility of a December rate hike on the table. Meanwhile, Bunds could continue to find support from expectations of Democratic gains in the US midterms, which may weigh on Wall Street and broader risk appetite. Polls favor Democrats to regain control of the House of Representatives, while the outcome of the Senate race remains uncertain.

European stocks fell on Tuesday, with the STOXX 50 dropping 1% and the STOXX 600 losing 0.6%, as investors await the US midterm elections and assessed the latest corporate results. Sentiment was also weighed down by Apple's disappointing margin outlook and weaker-than-expected iPad sales. In addition, a rise in oil prices following reports that the US had struck Iran’s Qeshm Island, also weighed on investors' mood. The technology sector was among the biggest decliners, tracking a global sell-off. ASML Holding tumbled 3%, SAP fell 2.1% and Infineon Technologies slid 3.4%. Mining and banking stocks were also under pressure, while Banco Santander dropped 2.4%, Siemens Energy lost 2.3% and Rolls-Royce declined 2%. In contrast, Bayer shares stood out, surging 6% after the company raised its 2026 profit outlook. Philips soared more than 4% after topping profit estimates.

The annual consumer inflation in Switzerland accelerated to 1.5% in October 2026 from 1.0% in September, above market expectations of 1.3% and reaching its highest level since December 2023. Prices increased mainly for transport (5.3% vs 3.6% in September) and housing and energy (2.5% vs 2.2%). Inflation also picked up in information and communication (2.9% vs 1.9%), while prices rebounded in recreation, sport and culture (1.0% vs -0.1%). Meanwhile, deflation eased in food and non-alcoholic beverages (-0.2% vs -1.0%) and clothing and footwear (-0.2% vs -1.9%). In contrast, inflation slowed in alcoholic beverages and tobacco (1.0% vs 1.7%), while healthcare prices declined further (-0.3% vs -0.1%). On a monthly basis, consumer prices rose 0.2%, compared to forecasts and September's no change. The increase was driven by higher prices for heating oil, petrol, diesel and footwear. Meanwhile, annual core inflation remained unchanged at 0.5%.

Turkey’s annual inflation rate rose to 29.77% in October 2026, above market expectations of 29.56% and picking up from a near five-year low of 29.73% in the previous month. The latest figure raises doubts about the prospect of another interest-rate cut before year-end, following the central bank’s decision to lower its benchmark interest rate by 100 basis points to 36% in October, its first reduction since January amid subdued demand and slowing economic activity. The central bank, however, will have November inflation data at its disposal before making its next policy decision. Price increases accelerated particularly in food and non-alcoholic beverages (27.73% vs 27.62% in September), housing (40.24% vs 39.99%), and transportation (36.39% vs 35.1%). In contrast, costs eased for alcoholic beverages and tobacco (28.73% vs 31.6%) and various goods and services (20.86% vs 21.88%). On a monthly basis, consumer prices rose to a six-month high of 2.58% from 1.84% in September.