Ongoing US-Iran fighting has raised inf concerns; efforts to restart shipping through the Strait of Hormuz have stalled, intensifying market fears of prolonged oil supply disruption and higher energy costs. Fed chair KEVIN WARSH warned on Friday of inflationary risks. The UK 10-year gilt yield rose to 5.224%, the highest since 2008; the 30-year gilt yield climbed to 5.871%, the highest since 1998.

Westpac expects the RBNZ to raise rates 25bp to 2.75% on Sept 2, in line with market consensus. The bank says RBNZ policy projections will likely imply a year‑end rate near 3% and a peak around 3.3%. Westpac expects any signal on an October move to be framed as data‑dependent and judges that, unless the RBNZ departs from that wording, the meeting is unlikely to trigger large market moves. It assigns roughly a 10–15% probability to a hawkish surprise (eg, upward revision to neutral-rate assumptions or clearer signals of consecutive hikes in Oct and Dec) and a similar 10–15% probability to a dovish surprise implying a pause before December, leaving risks broadly symmetric around the baseline.

Goldman Sachs CEO said trade policy and tariffs are, to some extent, a headwind for the US economy.