September 12, 2026. The ECB moved first. On Thursday it raised its deposit rate a quarter point to 2.50%, its second hike this year, and pointed straight at the Middle East for why inflation won't cooperate. Two days later Brent crude touched $108 a barrel, its highest close since May, after Iranian missile strikes on US warships pushed the conflict into new territory.
Now three more central banks take their turn inside 48 hours. The Fed decides September 16, the Bank of Japan wraps up its meeting September 18, and the Bank of England follows on the 17th. None of the three outcomes is settled, which is unusual for a week with this much riding on it.
Key Takeaways
- ECB raised its deposit rate 25bp to 2.50% on September 10, with the main refinancing rate at 2.65%
- Brent crude hit $108 a barrel on September 10 before easing back below $105 on diplomatic signals
- Fed, BoJ and BoE decide within 48 hours of each other, September 16 to 18
- US August payrolls of 162,000 pushed Fed hike odds into the high fifties on CME FedWatch
- EU regulators flagged AI-related ICT risk in finance as a new supervisory priority
The ECB Moves, and the Euro Barely Notices
The Governing Council raised all three key rates by a quarter point in Berlin on Thursday, taking the deposit facility to 2.50%, the refinancing rate to 2.65% and the marginal lending rate to 2.90%, effective September 16. All 65 economists in a Reuters poll had called it.
President Christine Lagarde described the vote as unanimous and said policy would keep being set meeting by meeting, with no commitment to what comes next.
"We have been surprised by the resilience of our economy, and we had anticipated in previous projections that growth will be lower than what we are seeing and what we are projecting." - Christine Lagarde, ECB President, September 10 press conference
The reasoning was blunt. Euro-area headline inflation ran at 3.3% in August, driven by a 14.3% jump in energy prices, and the ECB now sees 2027 inflation landing at 2.5% rather than the 2.3% it projected in June. Growth got upgraded too, to 0.9% this year. A hike that lifts both the inflation forecast and the growth forecast is not what markets expected six months ago.
EUR/USD dipped below 1.1600 on the announcement, recovered into the New York close, and held near 1.1610 into Friday. A fully priced hike moving the pair barely ten pips tells you the real action is still to come, on the American side of the calendar.
Oil Breaks $100 Again, and This Time It's Sticking
Brent crossed $100 a barrel on September 9 after the US struck Iranian oil tankers and Houthi forces hit Saudi energy infrastructure, and climbed further to $108 the next day, its highest close since May.
By Friday it had eased below $105 on reports that Gulf Cooperation Council ministers would meet their Iranian counterpart in Oman to discuss protecting shipping through the Strait of Hormuz.
The IEA cut its 2026 global demand forecast by 2.5 million barrels a day, the sharpest annual drop since the pandemic, while OPEC trimmed its own demand-growth outlook for a fifth straight month. Goldman Sachs raised its Brent forecast to $85 for December, assuming the disruption runs into 2027. US gasoline hit $4.22 a gallon, the highest since June.
Three Central Banks, 48 Hours, One Very Live Week
The Fed decides September 16, with the effective funэds rate near 3.63% after August payrolls came in at 162,000 against a consensus near 56,000. CME FedWatch has hike odds in the high fifties, close to a coin flip.
The Bank of England follows on the 17th, with UK monthly GDP growth of 0.3% in June giving mixed signal on whether it holds. The Bank of Japan closes the loop on the 17th and 18th, deciding on a policy rate already at 0.75%, its highest since 1995.
The dollar index has spent the week pinned near 99, unable to break 100 or fall much below 98.80. That range-bound behaviour is what a market looks like when it genuinely doesn't know which way three central banks are about to jump.
Regulators Turn Their Attention to AI Risk in Finance
Away from rates, EU supervisors made a notable joint move. The EBA, EIOPA and ESMA called for stronger governance and more consistent supervision of ICT risk arising from frontier AI models used across the EU financial sector, a first for the three authorities acting together on AI specifically rather than data or cyber risk generally.
For CFD and Forex brokers already navigating MiFID II product-intervention rules, it signals where the next compliance conversation is headed.
Conclusion
The ECB went first and the market shrugged, because a fully priced hike rarely moves anything on its own. Oil did the real damage this week, pushing past $100 twice and forcing every inflation model in the building to add a line for energy. Now the Fed, the BoJ and the Bank of England take their turns within two days of each other, and none of the three is a formality.
FAQ
Why did EUR/USD barely move after the ECB hike?
The 25bp increase to 2.50% was fully priced by all 65 economists surveyed by Reuters, so the announcement itself carried little new information.
Why is oil driving this week's rate decisions?
Brent above $100 pushes up inflation expectations directly, which is part of why US Fed hike odds rose after the price spike.
What happens if the Fed hikes and the BoJ holds?
The rate differential between the dollar and yen widens further, a scenario relevant to carry trades and USD/JPY positioning.
Disclaimer: This content is for informational purposes only and should not be considered investment advice. Trading financial markets involves significant risk. Always conduct your own research before making any trading decisions.
