Fed Hike Drives Treasury Surge, Oil Volatility, and Gold Pressure
US 10-year Treasury yields surged past 5%, highest since 2007, as flash PMIs and central bank speeches loom this week.
The story
The Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75% to 4.00%, marking the first rate increase since 2023. Fed Chair Kevin Warsh emphasized that inflation has been "too high... for too long," reinforcing a hawkish stance. This action contributed to the US 10-year Treasury yield reaching 5.041%, its highest level since July 2007.
Oil prices experienced a notable decline this week amid reports of potential U.S.-Iran negotiations and a proposed plan to reopen the Strait of Hormuz. Brent crude futures dropped, and WTI Crude also fell significantly. Geopolitical tensions in the Middle East eased further, contributing to the downside consolidation in crude oil benchmarks.
Gold prices were under pressure, slipping for the week, weighed down by a stronger US dollar and surging US Treasury yields. Higher real yields, with the 10-year real yield climbing to 2.76%, increased the opportunity cost of holding non-yielding bullion. The Federal Reserve's hawkish posture and increased odds of further rate hikes contributed to gold's overall decline.
Energy and metals
Energy markets saw mixed movements, with Henry Hub Natural Gas advancing, while TTF Natural Gas, WTI Crude, and Brent Crude all moved lower over the week. Gold also experienced a notable decline. In currency markets, the US dollar strengthened against the Saudi Riyal, Mexican Peso, Brazilian Real, and Canadian Dollar, but weakened against the Korean Won. The Australian Dollar also softened against the US Dollar. Across the Treasury curve, US 3-month, 5-year, 10-year, and 30-year yields all climbed higher, with the 10-year note notably extending its upward trend.
| Instrument | Now | 24h | 7d | MTD | YTD |
|---|---|---|---|---|---|
| Brent Crude | 97.44 USD/bbl | -8.6% | -6.2% | +7.7% | +60.1% |
| WTI Crude | 92.41 USD/bbl | -2.3% | -7.9% | +7.8% | +60.9% |
| TTF Natural Gas | 72.07 EUR/MWh | -4.0% | -9.4% | +3.2% | +155.9% |
| Henry Hub Natural Gas | 3.23 USD/MMBtu | -2.2% | +10.7% | +9.9% | -12.5% |
| Gold | 4,321.20 USD/oz | +0.5% | -2.3% | -3.6% | -0.5% |
Currencies vs the dollar
| Pair | Now | 24h | 7d | YTD |
|---|---|---|---|---|
| USD / CNY | 6.713 | +0.0% | +0.2% | -4.1% |
| USD / JPY | 157.185 | -1.0% | +0.1% | +0.5% |
| EUR / USD | 1.140 | +0.2% | -0.7% | -2.9% |
| USD / ARS | 1,524.500 | +0.3% | +1.0% | +5.0% |
| AUD / USD | 0.703 | +0.3% | -1.3% | +4.9% |
| USD / BRL | 5.187 | -0.1% | +1.2% | -5.3% |
| USD / CAD | 1.414 | -0.0% | +1.1% | +3.3% |
| GBP / USD | 1.325 | +0.3% | -1.0% | -1.6% |
| USD / IDR | 17,890.000 | +1.9% | +0.5% | +7.1% |
| USD / INR | 95.820 | -0.4% | -0.2% | +6.7% |
| USD / KRW | 1,354.400 | -0.9% | -2.2% | -5.8% |
| USD / MXN | 17.676 | -0.4% | +3.0% | -1.7% |
| USD / RUB | 84.075 | -1.1% | -0.5% | +5.8% |
| USD / SAR | 3.754 | +3.1% | +3.1% | +0.2% |
| USD / TRY | 48.928 | -0.0% | +0.3% | +13.9% |
| USD / ZAR | 16.275 | -0.9% | +0.2% | -1.9% |
US Treasury curve
| Maturity | Yield | Week | YTD |
|---|---|---|---|
| US 3M T-Bill | 4.070% | +9bp | +52bp |
| US 5Y Note | 5.007% | +15bp | +128bp |
| US 10Y Note | 5.184% | +19bp | +102bp |
| US 30Y Bond | 5.504% | +17bp | +66bp |
Central banks this week
Federal Reserve. Raised benchmark interest rate by 25 basis points to 3.75%-4.00%. Fed Chair Kevin Warsh stated inflation was "too high... for too long." New York Fed President John Williams indicated another hike before year-end is reasonable.
Reinforced a hawkish monetary policy stance, increasing market expectations for further tightening and contributing to rising Treasury yields.
Bank of England. Remained on hold with interest rates.
Despite holding rates, the acceleration of UK's August CPI to a five-month high may increase market expectations for a tougher stance in the future.
Bank of Japan. Widely expected to raise its policy rate by 25 basis points in the upcoming Asian session.
Faces pressure to hike due to high oil prices and a weakening yen, though fragile economic growth and government preference for lower rates may constrain the scope for tightening.
Reserves — who holds what, who is moving
Official sector reserve data for 2025 highlights China as the largest holder of foreign exchange reserves, followed by Japan and Switzerland. The Euro area, India, and Saudi Arabia also maintain substantial foreign exchange holdings. Korea, Rep. and Singapore are significant holders, reflecting their roles in global trade and finance. This landscape underscores the continued prominence of the US dollar in global reserve portfolios.
FX reserves — top 15 (excluding gold)
| Country | Reserves USD | As of |
|---|---|---|
| China | $3,424.9B | 2025 |
| Japan | $1,252.6B | 2025 |
| Switzerland | $929.6B | 2025 |
| Euro area | $594.4B | 2025 |
| India | $576.5B | 2025 |
| Saudi Arabia | $459.8B | 2025 |
| Korea, Rep. | $421.9B | 2025 |
| Singapore | $404.9B | 2025 |
| Brazil | $334.3B | 2025 |
| United Arab Emirates | $281.9B | 2025 |
| Thailand | $249.3B | 2025 |
| United States | $243.3B | 2025 |
| Mexico | $239.3B | 2025 |
| Israel | $229.5B | 2025 |
| Poland | $194.5B | 2025 |
Fuel + pump prices
| Fuel | Benchmark / pump | Driver + passthrough |
|---|---|---|
| Petrol (Gasoline) | Delhi: ₹102.12/litre; Mumbai: ₹111.21/litre | Retail prices in India remained stable as state refiners absorbed rising international crude costs. |
| Diesel | Delhi: ₹95.20/litre; Mumbai: ₹97.83/litre | Despite global crude volatility, domestic retail diesel prices in India were unchanged due to refiners absorbing costs. |
| LPG | United Kingdom: GBP 1.01 per liter (USD 1.35 per liter) | UK LPG prices on September 21, 2026, were higher compared to a month and three months prior. |
| Jet Fuel (Jet-A) | US National Average: $8.49 per gallon (September 2026); Argus US Jet Fuel Index (Chicago, Houston, Los Angeles, New York): $4.30/gallon (September 25, 2026) | US retail Jet-A fuel prices rose in September compared to August, with a national average increase of 18 cents per gallon. |
| Marine Bunker Fuel | Singapore VLSFO: $879.0 per MT; Singapore MGO: $1,310.0 per MT | Bunker fuel prices in Singapore saw daily assessments as of September 26, reflecting market movements in a major global hub. |
What we’ll be watching this week
- Reserve Bank of Australia (RBA) Interest Rate Decision (September 29)
- US Consumer Confidence (CB) (September 29)
- Chinese PMI (September 30)
- US PCE Price Index (August) (September 30)
- US ADP Employment Report (September 30)
- US ISM Manufacturing PMI (October 1)
- Eurozone CPI (October 2)
- US September Employment Report (October 2)
Markets, FX, reserves: fmd-data (). Central bank moves + fuel benchmarks + calendar: grounded via Google Search at publish time.