Energy Prices Surge as Central Banks Signal Sustained Hawkishness
Oil and gas prices climbed significantly this week, while markets anticipate key US inflation data and Federal Reserve commentary in the coming days.
The story
Crude oil benchmarks, including WTI and Brent, extended their upward trajectory this week, driven by persistent Middle East geopolitical tensions and ongoing energy supply disruptions. This surge in energy costs continues to fuel inflation concerns across global economies. Despite the International Energy Agency lowering its 2026 global oil demand growth forecast, the supply-demand imbalance remains skewed towards a deficit, contributing to price pressures.
US Treasury yields experienced a retreat after reaching multi-decade highs, yet the Federal Reserve's September FOMC minutes revealed that most officials anticipate another rate hike before year-end. This hawkish stance reflects ongoing concerns about inflation remaining elevated. Recent September CPI and PPI data further supported these worries, with both headline and core inflation figures surpassing forecasts.
Major central banks, including the European Central Bank, the Federal Reserve, and the Bank of Japan, each implemented 25 basis point rate hikes in September. The ECB raised its deposit facility rate to 2.50% on September 10, followed by the Fed increasing its target range to 3.75%-4.00% on September 16, and the BoJ moving its short-term policy rate to 1.25% on September 18. International Monetary Fund Managing Director Kristalina Georgieva urged central banks to maintain a "cautiously hawkish" policy approach.
Energy and metals
Energy commodities saw broad upward movement, with WTI Crude, Brent Crude, and TTF Natural Gas all climbing over the week. Henry Hub Natural Gas, however, moved lower. Gold experienced a slight decline. In foreign exchange markets, the USD strengthened against the Saudi Riyal, Mexican Peso, and Brazilian Real, while softening against the Indian Rupee and Russian Ruble. The US dollar generally lifted from its lows but finished lower against most G10 currencies, with the Japanese yen remaining relatively flat. US 10-year and 30-year Treasury yields moved lower, while the US 3-month T-Bill yield edged higher.
| Instrument | Now | 24h | 7d | MTD | YTD |
|---|---|---|---|---|---|
| Brent Crude | 109.86 USD/bbl | +3.7% | +4.9% | +6.1% | +80.5% |
| WTI Crude | 99.02 USD/bbl | +1.1% | +7.8% | +9.5% | +72.4% |
| TTF Natural Gas | 87.55 EUR/MWh | +1.3% | +7.5% | +21.0% | +210.9% |
| Henry Hub Natural Gas | 3.12 USD/MMBtu | -3.7% | -3.2% | +3.0% | -15.5% |
| Gold | 4,181.10 USD/oz | +0.3% | -0.8% | -0.1% | -3.7% |
Currencies vs the dollar
| Pair | Now | 24h | 7d | YTD |
|---|---|---|---|---|
| USD / CNY | 6.686 | -0.1% | -0.1% | -4.4% |
| USD / JPY | 157.987 | -0.1% | -0.0% | +1.0% |
| EUR / USD | 1.124 | +0.3% | +0.3% | -4.3% |
| USD / ARS | 1,517.500 | +0.3% | +0.1% | +4.5% |
| AUD / USD | 0.695 | +0.4% | -0.5% | +3.8% |
| USD / BRL | 5.069 | -0.5% | +1.0% | -7.4% |
| USD / CAD | 1.414 | -0.4% | -0.9% | +3.2% |
| GBP / USD | 1.333 | +0.4% | +0.7% | -1.0% |
| USD / IDR | 18,000.000 | -0.1% | +0.5% | +7.7% |
| USD / INR | 94.960 | +0.5% | -1.9% | +5.8% |
| USD / KRW | 1,329.600 | -0.8% | -0.8% | -7.5% |
| USD / MXN | 18.479 | +0.2% | +1.6% | +2.8% |
| USD / RUB | 83.461 | -0.5% | -1.8% | +5.0% |
| USD / SAR | 3.752 | +3.2% | +3.1% | +0.1% |
| USD / TRY | 49.509 | -0.0% | +0.4% | +15.3% |
| USD / ZAR | 16.475 | -0.2% | -0.2% | -0.7% |
US Treasury curve
| Maturity | Yield | Week | YTD |
|---|---|---|---|
| US 3M T-Bill | 4.070% | +1bp | +52bp |
| US 5Y Note | 4.899% | -12bp | +118bp |
| US 10Y Note | 5.098% | -15bp | +94bp |
| US 30Y Bond | 5.436% | -16bp | +60bp |
Central banks this week
Federal Reserve. September FOMC minutes indicated most officials anticipate another rate hike by year-end.
Reinforced market expectations for continued monetary tightening to combat persistent inflation.
European Central Bank. Hiked its deposit facility rate by 25 basis points to 2.50% on September 10.
Signaled continued efforts to address rising euro area inflation, which rose more than expected.
Bank of Japan. Raised its short-term policy rate by 25 basis points to 1.25% on September 18.
Continued its normalization of ultra-loose monetary policy amid broad-based wage gains.
Bank of England. Held its Bank Rate on September 17, with three of nine members voting for a hike.
Highlighted ongoing divisions within the MPC regarding the need for further tightening despite a majority vote to hold.
Reserve Bank of India. Completed its first rate hike in nearly four years, shifting its policy stance to "orderly tightening."
Marked a pivot towards a more restrictive monetary policy in the Asia-Pacific region.
People's Bank of China. Held its 1-year Loan Prime Rate at 3.00% on September 20.
Indicated constrained policy space for easing, influenced by the global rate-hike cycle and domestic credit demand.
Reserves — who holds what, who is moving
China continues to hold the largest foreign exchange reserves globally, followed by Japan and Switzerland. The Euro area, India, and Saudi Arabia also maintain substantial FX reserve holdings. Korea, Rep. and Singapore round out the top reported holders. These concentrations reflect ongoing patterns in global balance of payments and reserve management strategies.
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 |
|---|---|---|
| VLSFO Marine Bunker | Singapore: $913.50/mt, Rotterdam: $740.50/mt, Houston: $767.50/mt | Global demand and ongoing geopolitical tensions continue to drive prices at major bunkering hubs. |
| MGO Marine Bunker | Singapore: $1,254.00/mt, Rotterdam: $1,392.50/mt, Houston: $1,384.50/mt | Distillate fuel prices remain elevated, reflecting tight market conditions and strong demand for cleaner marine fuels. |
What we’ll be watching this week
- Monday, October 19: Japan Tertiary Industry Activity Index (August)
- Tuesday, October 20: Reserve Bank of Australia Minutes
- Wednesday, October 21: US Consumer Price Index (CPI)
- Thursday, October 22: US Retail Sales
- Thursday, October 22: US Producer Price Index (PPI)
- Thursday, October 22: Fed Chair Warsh remarks
- Friday, October 23: ECB's one- and three-year inflation survey results
- Friday, October 23: Preliminary October PMI data
Markets, FX, reserves: fmd-data (). Central bank moves + fuel benchmarks + calendar: grounded via Google Search at publish time.