Germany’s economy remains stuck in a period of weak growth, with recent data showing flat GDP as soft private consumption and exports weigh on activity. Economists expect conditions to improve gradually once substantial fiscal stimulus—embedded in the upcoming 2026 budget—kicks in, helping lift the country out of stagnation. The EU projects German growth of about 1.2% in both 2026 and 2027, supported by rising industrial orders and a slow economic revival. Meanwhile, many notable investors expect further ECB rate cuts as euro-area growth and wages cool, and some see U.S. monetary easing putting pressure on the ECB to follow suit—contributing to their bullish stance on the euro.

Japan is stepping up verbal warnings on yen weakness, but this has only capped USDJPY temporarily as markets also price in rising odds of Fed rate cuts. Traders increasingly think Japan’s intervention “playbook” is shifting under the Takaichi administration, with officials signaling they might act more often and at lower levels—though any impact will be brief without a meaningful BOJ policy shift. Growing speculation now points to a possible BOJ rate hike as early as December or January, with several board members dropping hawkish hints, though political constraints could limit this to a “one-and-done” move. Geopolitical tensions with China and possible retaliatory actions also weigh on the yen.

Australia’s October inflation came in hotter than expected, with core prices rising 3.3% and headline inflation at 3.8%—both above the RBA’s 2–3% target. The strong print pushed the Australian dollar and bond yields higher and led some economists to think the easing cycle may already be over. One Australian bank even warns rates could rise in 2026 if inflation stays sticky, the labor market remains tight, or productivity continues to lag. With unemployment still low, wages strong, and the new monthly CPI measure potentially distorted by seasonality, the RBA is likely to stay cautious and rely on quarterly data as it maintains a wait-and-see stance.