Energy Prices Climb Amid Middle East Tensions; Treasury Yields Ease as Fed Pause Expectations Grow
Energy prices continued their ascent, while US Treasury yields edged lower ahead of key inflation data and central bank speeches this week.
The story
Brent crude held above $100 a barrel this week amidst persistent Middle East tensions, even as US President Donald Trump indicated the US would not attack Iran before next month's midterm elections. Oil prices remained volatile, influenced by improved flows through the Strait of Hormuz and hurricane-related production shutdowns in the Gulf. US crude inventories also saw an increase of 6 million barrels last week, surpassing consensus expectations.
US Treasury yields edged lower, with healthy demand at 10-year and 30-year auctions helping to alleviate pressure from the recent rise in term premiums. Financial markets are largely confident the Federal Reserve will hold rates at its next meeting, though the upcoming CPI report will be closely monitored. Money markets now price a 19% chance of an October 28th rate increase, with a December hike fully priced in.
Gold held above $4,100 an ounce, supported by sovereign buyers offsetting pressure from rising real yields. The People's Bank of China added 740,000 ounces in September, marking its largest monthly purchase since resuming buying in November 2024. This official sector demand helped bullion maintain its level despite the 10-year Treasury yield touching 5.35% earlier in the week.
Energy and metals
Natural gas benchmarks, including TTF Natural Gas and Henry Hub Natural Gas, saw significant upward momentum this week. Brent Crude and WTI Crude also posted gains, continuing their month-to-date increases. Gold extended its grind higher over the week. In FX, the Brazilian Real strengthened against the US Dollar, while the Saudi Riyal and Russian Ruble moved higher against the US Dollar. US 10-year and 30-year Treasury yields edged lower, while the 3-month T-Bill yield moved higher.
| Instrument | Now | 24h | 7d | MTD | YTD |
|---|---|---|---|---|---|
| Brent Crude | 104.72 USD/bbl | +0.4% | +2.4% | +1.1% | +72.1% |
| WTI Crude | 91.85 USD/bbl | +0.4% | +0.8% | +1.6% | +60.0% |
| TTF Natural Gas | 81.43 EUR/MWh | +3.3% | +8.9% | +12.5% | +189.2% |
| Henry Hub Natural Gas | 3.22 USD/MMBtu | +1.6% | +6.1% | +6.4% | -12.6% |
| Gold | 4,216.30 USD/oz | +1.4% | +1.3% | +0.7% | -2.9% |
Currencies vs the dollar
| Pair | Now | 24h | 7d | YTD |
|---|---|---|---|---|
| USD / CNY | 6.692 | -0.1% | -0.2% | -4.3% |
| USD / JPY | 158.246 | +0.1% | +0.2% | +1.2% |
| EUR / USD | 1.121 | -0.1% | -0.4% | -4.6% |
| USD / ARS | 1,516.500 | +0.0% | -0.5% | +4.5% |
| AUD / USD | 0.699 | +0.4% | +0.5% | +4.3% |
| USD / BRL | 4.977 | -0.8% | -4.7% | -9.1% |
| USD / CAD | 1.425 | +0.2% | +0.0% | +4.1% |
| GBP / USD | 1.323 | +0.0% | -0.1% | -1.7% |
| USD / IDR | 17,875.000 | +0.4% | -0.2% | +7.0% |
| USD / INR | 96.730 | -0.1% | +0.4% | +7.8% |
| USD / KRW | 1,340.900 | -0.2% | -0.1% | -6.7% |
| USD / MXN | 18.388 | +1.1% | +0.4% | +2.3% |
| USD / RUB | 84.735 | -0.3% | +1.6% | +6.6% |
| USD / SAR | 3.755 | +3.2% | +3.2% | +0.2% |
| USD / TRY | 49.260 | -0.1% | +0.3% | +14.7% |
| USD / ZAR | 16.500 | -0.5% | -0.9% | -0.5% |
US Treasury curve
| Maturity | Yield | Week | YTD |
|---|---|---|---|
| US 3M T-Bill | 4.057% | +6bp | +51bp |
| US 5Y Note | 5.021% | -3bp | +130bp |
| US 10Y Note | 5.244% | -3bp | +108bp |
| US 30Y Bond | 5.600% | -3bp | +76bp |
Central banks this week
Federal Reserve. FOMC minutes detailing September's rate hike are due, with officials speaking at IMF/World Bank meetings.
Markets anticipate a pause in October, but a December rate hike remains fully priced in, with inflation data key to future policy.
European Central Bank. Raised its policy rate.
The move was attributed to continued inflationary pressures stemming from the Middle East conflict.
Bank of Canada. Softening labor market momentum in September.
This strengthens the case for a potential pause in rate hikes at the upcoming October 28th meeting.
Bank of Japan. Policy board member Junko Koeda and Deputy Governor Shinichi Uchida are slated to deliver remarks.
Investors will assess commentary for clues on future policy direction, with the central bank noted as tightening.
Monetary Authority of Singapore (MAS). Monetary policy decision due next week.
Markets will watch for any adjustments to policy settings in response to regional and global economic conditions.
Reserves — who holds what, who is moving
China continues to hold the largest 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 round out the top eight major holders of foreign exchange reserves. These positions reflect the significant global financial influence of these economies.
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 |
|---|---|---|
| Marine VLSFO (Very Low Sulfur Fuel Oil) | Singapore: $889.50/mt; Rotterdam: $715.00/mt | Shipping industry costs are influenced by these benchmarks, reflecting global supply and demand dynamics for marine fuels. |
| Marine MGO (Marine Gas Oil) | Singapore: $1,281.00/mt; Rotterdam: $1,374.00/mt | Higher gas oil prices directly impact operating expenses for vessels, which can subsequently affect freight rates and logistics costs. |
What we’ll be watching this week
- October 14: US Consumer Price Index (CPI) release
- October 15: US Producer Price Index (PPI) release
- October 15: US Retail Sales data
- All week: Central bank speeches at IMF/World Bank Annual Meetings in Bangkok
- October 16: Federal Reserve Chair Powell speaks at IMF Annual Meeting
- Next week: Singapore's monetary policy decision
- Next week: China's inflation and trade data
- Next week: G20 Finance Ministers and Central Bank Governors meeting
- October 13: Bank of Japan consumer sentiment survey
Markets, FX, reserves: fmd-data (). Central bank moves + fuel benchmarks + calendar: grounded via Google Search at publish time.