Energy Prices Surge as Central Banks Signal Hawkish Stance; Gold Retreats
Oil markets saw a significant rebound this week amid geopolitical tensions, while upcoming US jobless claims and new home sales data will be keenly watched.
The story
Global energy markets experienced a notable surge this week, with Brent crude futures settling higher and reaching their highest levels since mid-June. This upward movement in oil prices, along with fresh US strikes against Iran, reignited concerns over escalating energy costs and their potential inflationary impact. The renewed geopolitical tensions in the Middle East reversed earlier hopes for a settlement that had previously seen oil prices decline.
Central banks globally maintained a hawkish stance, even as some inflation data showed moderation. The Federal Reserve held its benchmark interest rate steady in June but conveyed a hawkish signal, with Governor Christopher J. Waller expressing concerns about inflation potentially remaining elevated or trending higher, necessitating tighter monetary policy. Despite this, June's core Consumer Price Index was flat, marking the softest reading since May 2020, which somewhat reduced expectations for immediate Fed rate hikes. The European Central Bank implemented a 25 basis point rate increase as a precautionary measure, and the Bank of Japan also delivered a rate hike.
Gold prices remained within a defined range, caught between the inflationary pressures from rising energy costs and broader economic growth concerns. Bullion briefly advanced after softer-than-expected US inflation data, with traders reducing expectations for near-term Federal Reserve tightening. However, this gain quickly faded as renewed increases in crude oil prices and Middle East tensions redirected focus back to inflation and the Federal Reserve's policy outlook, causing gold to slip back. US 10-year Treasury yields saw a modest decline for the week, even amidst the upward trend in oil prices.
Energy and metals
Brent Crude and WTI Crude advanced significantly over the week and month, reflecting upward pressure on energy markets. TTF Natural Gas also saw a substantial surge across both weekly and monthly periods. In contrast, Gold experienced a pullback this week. Henry Hub Natural Gas showed a slight dip. On the foreign exchange front, the US Dollar gained against the Saudi Riyal and Russian Ruble, while retreating against the Korean Won and Canadian Dollar. Across the US Treasury curve, 10Y and 5Y Note yields eased, while the 3M T-Bill yield edged higher.
| Instrument | Now | 24h | 7d | MTD | YTD |
|---|---|---|---|---|---|
| Brent Crude | 88.10 USD/bbl | +4.6% | +15.9% | +20.8% | +44.8% |
| WTI Crude | 81.78 USD/bbl | +3.6% | +14.5% | +17.7% | +42.4% |
| TTF Natural Gas | 57.40 EUR/MWh | +4.8% | +18.0% | +32.1% | +103.8% |
| Henry Hub Natural Gas | 2.91 USD/MMBtu | +1.9% | -1.0% | -11.1% | -21.0% |
| Gold | 4,018.80 USD/oz | +0.8% | -2.1% | -0.1% | -7.1% |
Currencies vs the dollar
| Pair | Now | 24h | 7d | YTD |
|---|---|---|---|---|
| USD / CNY | 6.777 | +0.1% | +0.0% | -3.1% |
| USD / JPY | 162.353 | -0.0% | -0.0% | +3.8% |
| EUR / USD | 1.145 | +0.0% | +0.1% | -2.6% |
| USD / ARS | 1,478.000 | +0.2% | -0.6% | +1.8% |
| AUD / USD | 0.699 | -0.2% | +0.6% | +4.3% |
| USD / BRL | 5.111 | -0.1% | -0.5% | -6.7% |
| USD / CAD | 1.402 | -0.1% | -1.0% | +2.4% |
| GBP / USD | 1.345 | -0.2% | +0.5% | -0.1% |
| USD / IDR | 17,890.000 | -0.5% | -1.0% | +7.1% |
| USD / INR | 96.280 | -0.4% | +1.0% | +7.3% |
| USD / KRW | 1,487.460 | +0.6% | -1.2% | +3.4% |
| USD / MXN | 17.485 | +0.5% | -0.3% | -2.7% |
| USD / RUB | 78.125 | +0.0% | +2.5% | -1.7% |
| USD / SAR | 3.755 | +3.9% | +3.3% | +0.2% |
| USD / TRY | 47.136 | +0.1% | +0.4% | +9.7% |
| USD / ZAR | 16.483 | +0.5% | +0.8% | -0.6% |
US Treasury curve
| Maturity | Yield | Week | YTD |
|---|---|---|---|
| US 3M T-Bill | 3.707% | +1bp | +16bp |
| US 5Y Note | 4.273% | -4bp | +55bp |
| US 10Y Note | 4.541% | -3bp | +38bp |
| US 30Y Bond | 5.064% | -1bp | +22bp |
Central banks this week
Federal Reserve. Kept benchmark interest rate unchanged in June but sent a hawkish signal.
Governor Christopher J. Waller expressed concern about inflation remaining elevated or trending higher, suggesting potential for tighter policy.
European Central Bank (ECB). Raised rates by 25 basis points.
The hike was described as a precautionary measure, with the ECB's July 23rd meeting expected to maintain a hold.
Bank of Japan (BoJ). Delivered a rate hike following its December increase.
Despite the hike, the BoJ is largely expected to maintain its ultra-loose monetary policy stance, even as the yen remains near four-decade lows.
Reserves — who holds what, who is moving
Among the top holders of foreign exchange reserves, China continues to maintain the largest position, followed by Japan and Switzerland. India and the Euro area also hold substantial reserves, underscoring the diverse distribution of global currency holdings. Saudi Arabia and the Russian Federation are also prominent reserve holders. The stability in the ranking of these top holders indicates a consistent pattern in global reserve accumulation and management.
FX reserves — top 15 (excluding gold)
| Country | Reserves USD | As of |
|---|---|---|
| China | $3,264.8B | 2024 |
| Japan | $1,159.7B | 2024 |
| Switzerland | $822.1B | 2024 |
| India | $569.5B | 2024 |
| Euro area | $546.0B | 2024 |
| Saudi Arabia | $436.8B | 2024 |
| Russian Federation | $412.7B | 2024 |
| Korea, Rep. | $409.5B | 2024 |
| Singapore | $365.5B | 2024 |
| Brazil | $318.9B | 2024 |
| United Arab Emirates | $231.7B | 2024 |
| United States | $227.8B | 2024 |
| Mexico | $221.9B | 2024 |
| Thailand | $217.3B | 2024 |
| Israel | $214.5B | 2024 |
Fuel + pump prices
| Fuel | Benchmark / pump | Driver + passthrough |
|---|---|---|
| Petrol | Delhi: ₹102.12/litre; Mumbai: ₹111.18/litre; Singapore (RON 92): S$3.34/litre | Indian retail petrol prices have remained stable since May 25, while Singapore prices were last updated on July 8. |
| Diesel | Delhi: ₹95.20/litre; Mumbai: ₹97.83/litre; Singapore: SGD 3.52/litre (USD 2.72/litre) | Indian retail diesel prices have been steady since May 25, while Singapore's diesel price was last updated on July 13. |
| LPG | Mumbai: ₹941.50/14.2 kg cylinder | The price for a domestic LPG cylinder in Mumbai has remained unchanged since July 1, 2026. |
| Marine Bunker Fuel | Dubai: HSFO $458.00/MT; MGO $768.00/MT; VLSFO $580.00/MT | Bunker fuel prices in Dubai are updated daily, reflecting global crude oil and shipping demand factors. |
| Jet Fuel | Global Average (refinery): $0.88/litre | Global jet fuel prices eased slightly in the week of July 7, partly due to temporary relief from ceasefire talks. |
What we’ll be watching this week
- Monday, July 20: US Monthly Budget Statement
- Tuesday, July 21: US NFIB Business Optimism Index
- Wednesday, July 22: US PPI-Final Demand
- Wednesday, July 22: US Beige Book
- Wednesday, July 23: ECB Interest Rate Decision
- Thursday, July 23: US Jobless Claims
- Thursday, July 23: US Retail Sales
- Friday, July 24: US New Home Sales for June
Markets, FX, reserves: fmd-data (). Central bank moves + fuel benchmarks + calendar: grounded via Google Search at publish time.