The European Central Bank has proposed redesigning additional Tier 1 instruments so they reliably absorb losses before bank failure, offering clearer terms to issuers and investors and preserving compliance with global standards. The recommendations, part of a broader push to simplify EU bank rules, also consider merging capital buffers, adjusting MREL alignment, and expanding simplified regimes for smaller lenders while rejecting a Bundesbank idea to strip AT1/T2 out of core requirements.

The dollar logged its sharpest drop since September after the Federal Reserve cut rates by 25 basis points and Chair Jerome Powell emphasized labor-market risks over inflation pressures. The Bloomberg Dollar Spot Index fell 0.4% as investors interpreted Powell's tone as more dovish than expected, with the greenback weakening against all major developed-market currencies. Strategists said upcoming U.S. jobs and inflation data will be more pivotal for the dollar's trajectory than Wednesday's policy decision.

Japan's latest 20-year government bond auction drew the strongest demand since 2020, with a bid-to-cover ratio climbing to 4.1 from 3.28 the previous month. Demand was attributed to attractive yields, expectations of reduced future issuance, and a supportive backdrop from falling US yields.

The Federal Reserve's recent rate cut faced significant internal resistance, with three dissenting votes and four officials quietly objecting by projecting higher rates for 2025. President Donald Trump criticized the cut as insufficient and expressed a desire for lower rates, posing a challenge for Powell's successor. The Fed's decision reflects a split between officials concerned about a weakening labor market and those wary of cutting rates in a strong economy.

Argentina has raised $1 billion through a local-law dollar bond sale as a test for re-entry into global credit markets. The bond, due November 2029, was priced to yield 9.26%, higher than the sub-9% expected by Economy Minister Luis Caputo. Demand reached $1.42 billion, with a cash allocation of $910 million. The sale is crucial for meeting a $4.5 billion bond payment in January.

Brazil's central bank has maintained its key interest rate at 15% for the fourth consecutive meeting, citing persistent inflation expectations above the 3% target despite a slowing economy. The central bank's cautious stance is influenced by potential increased public spending ahead of the 2026 election and recent currency volatility.

Saudi stocks are expected to continue underperforming in 2026, with investors citing weak oil prices and sluggish earnings growth as primary concerns. The Tadawul All Share Index has dropped 11% this year, the most since 2015, and analysts predict only a 2% profit increase next year.

European Securities and Markets Authority Chair Verena Ross will not seek a second term and will step down at the end of her current term, which concludes October 31, 2026. ESMA will begin the process of selecting a new chair.

Japan's stock market has experienced a surge in block trades this year, reaching at least ¥1.3 trillion, the highest level since 2002. This spike is attributed to companies opting for large, private transactions to quickly reduce cross-shareholdings, rather than conducting formal follow-on offerings. Rising market volatility and regulatory encouragement for more streamlined governance have further fueled this trend.

China's trade surplus has reached a record $1 trillion, driven by $3.41 trillion in exports, despite US tariffs and trade tensions. The surplus with Southeast Asia has surged to $245 billion, and the surplus with the EU has increased by nearly $20 billion. The auto sector has contributed significantly, with a $66 billion surplus, as China becomes the world's largest auto exporter.

Capital markets play a critical role in financing the US economy, providing 75.3% of financing for non-financial corporations through issuance of equity and debt securities. Debt capital markets are particularly dominant in the US at 76.8% of total financing, in contrast to other regions, where bank lending dominates at 83.9%. Discover more facts in SIFMA's Capital Markets Fact Book.