Central Banks Hold Steady Amid Oil Volatility; Gold Retreats as Gas Surges
Major central banks largely paused rate hikes this week, while natural gas prices climbed significantly, with key US jobs and inflation data due next week.
The story
Five major central banks delivered policy decisions this week, with the Federal Reserve, European Central Bank, and Bank of Japan opting to hold rates steady. The Fed maintained its target range at 3.75-4.00%, though Dallas Fed President Lorie Logan and St. Louis Fed President Alberto Musalem signaled further hikes may be necessary to counter inflation. Conversely, the Bank of Canada raised its benchmark rate by 25 basis points to 2.50%, with Governor Macklem citing expectations of higher inflation due to elevated crude oil prices.
Oil markets saw Brent crude ease from a six-month high, trading around $114.50 a barrel, following reports of Qatari mediators in Tehran working on de-escalation efforts alongside the United States. Despite this, geopolitical tensions in the Middle East, including Houthi attacks inside Saudi Arabia, kept a risk premium in prices. Shipping disruptions in key waterways like the Strait of Hormuz and the Bab el-Mandeb Strait continued to constrain supply, contributing to sustained volatility.
US 10-year Treasury yields slipped below 5% as investors sought safety amid a tech selloff and concerns over AI investment valuations. However, gold experienced a notable decline, dropping below $4,000 an ounce for the first time since mid-July. This unusual divergence occurred as higher oil prices revived fears of persistent inflation, increasing the opportunity cost of holding non-yielding gold and suggesting central banks might maintain a tightening bias.
Energy and metals
Natural gas benchmarks saw significant upward movement this week, with TTF Natural Gas gaining substantially and Henry Hub Natural Gas also rising. In contrast, Brent Crude declined for the week, while WTI Crude posted a modest increase. Gold experienced a notable retreat. Across currency markets, the US Dollar strengthened against the Brazilian Real and South African Rand, while also moving higher against the Japanese Yen. In the Treasury market, US 10Y Note, US 3M T-Bill, and US 5Y Note yields all moved lower for the week, with the US 30Y Bond yield also seeing a slight decrease.
| Instrument | Now | 24h | 7d | MTD | YTD |
|---|---|---|---|---|---|
| Brent Crude | 113.43 USD/bbl | -1.3% | -2.8% | +9.6% | +86.4% |
| WTI Crude | 104.12 USD/bbl | +2.1% | +0.8% | +15.2% | +81.3% |
| TTF Natural Gas | 103.94 EUR/MWh | +5.4% | +10.8% | +43.7% | +269.1% |
| Henry Hub Natural Gas | 2.90 USD/MMBtu | -1.8% | +9.8% | -4.2% | -21.4% |
| Gold | 3,898.90 USD/oz | -3.3% | -2.7% | -6.9% | -10.2% |
Currencies vs the dollar
| Pair | Now | 24h | 7d | YTD |
|---|---|---|---|---|
| USD / CNY | 6.654 | -0.1% | -0.4% | -4.9% |
| USD / JPY | 157.804 | -0.0% | +0.8% | +0.9% |
| EUR / USD | 1.118 | +0.2% | -0.3% | -4.8% |
| USD / ARS | 1,538.486 | -0.2% | +0.7% | +6.0% |
| AUD / USD | 0.704 | +0.1% | +0.2% | +5.0% |
| USD / BRL | 5.385 | +0.7% | +6.6% | -1.7% |
| USD / CAD | 1.397 | -0.1% | -0.2% | +2.0% |
| GBP / USD | 1.339 | +0.1% | -0.1% | -0.6% |
| USD / IDR | 18,120.000 | +0.3% | +0.4% | +8.4% |
| USD / INR | 94.950 | -0.2% | +0.3% | +5.8% |
| USD / KRW | 1,335.100 | -0.2% | +0.7% | -7.2% |
| USD / MXN | 18.852 | +1.2% | +0.7% | +4.9% |
| USD / RUB | 81.246 | +0.9% | -0.8% | +2.2% |
| USD / SAR | 3.637 | -0.0% | +0.1% | -2.9% |
| USD / TRY | 49.943 | +0.2% | +0.4% | +16.3% |
| USD / ZAR | 16.707 | +0.6% | +1.4% | +0.7% |
US Treasury curve
| Maturity | Yield | Week | YTD |
|---|---|---|---|
| US 3M T-Bill | 3.973% | -6bp | +43bp |
| US 5Y Note | 4.721% | -8bp | +100bp |
| US 10Y Note | 4.929% | -6bp | +77bp |
| US 30Y Bond | 5.309% | -1bp | +47bp |
Central banks this week
Federal Reserve. Held federal funds rate target range at 3.75-4.00%.
While the Fed paused, Dallas Fed President Lorie Logan and St. Louis Fed President Alberto Musalem suggested more hikes are needed, indicating internal debate on future policy.
Bank of Canada. Raised its policy interest rate by 25 basis points to 2.50%.
This hike was driven by concerns over persistent inflationary pressures, particularly from higher crude oil and petroleum prices, signaling a hawkish stance.
European Central Bank. Maintained its deposit rate at 2.50%.
The ECB's decision to hold came as President Christine Lagarde announced her departure in February 2027, adding an element of leadership transition to the policy outlook.
Bank of Japan. Kept its benchmark rate at 1.25% but raised its fiscal 2027 inflation forecast.
The updated inflation forecast suggests a gradual shift towards tighter monetary policy, even as the bank maintained its current rate.
Reserve Bank of New Zealand. Held its Official Cash Rate at 2.75%.
This was a surprise to some market participants who had anticipated a hike, suggesting a more cautious approach to policy adjustments.
Reserves — who holds what, who is moving
Official sector reserve movements highlight ongoing shifts in global holdings. Historically, central banks have been significant accumulators of gold, with emerging economies like China, India, and Turkey increasing their gold reserves in recent years. This diversification away from traditional assets can signal a desire for greater autonomy from the dollar system. Concurrently, once-reliable holders of US Treasuries, such as Japan and Korea, have reportedly become less active buyers, primarily influenced by domestic economic developments. This trend suggests a gradual rebalancing in global reserve asset preferences.
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 (Very Low Sulphur Fuel Oil) | Singapore: $1,000.5 per metric ton (Oct 28); New York: $877.00 per metric ton (Oct 30); Hong Kong: $1,023.00 per metric ton (Oct 30). | Prices remained elevated, reflecting ongoing global oil market uncertainty and shipping costs. |
| Marine Gasoil (MGO) | Singapore: $1,322.5 per metric ton (Oct 28); New York: $1,561.00 per metric ton (Oct 30). | MGO benchmarks continued to trade at a premium over VLSFO, indicating tighter distillate supply relative to residual fuels. |
| HSFO (High Sulphur Fuel Oil) | Hong Kong: $993.50 per metric ton (Oct 30). | HSFO prices in key bunkering hubs reflected the broader trends in crude oil and refining margins. |
What we’ll be watching this week
- November 2: US Construction Spending (10:00 ET)
- November 2: US ISM Manufacturing PMI (10:00 ET)
- November 3: Australia RBA Interest Rate Decision
- November 4: US ADP National Employment Report (08:15 ET)
- November 4: US Trade Balance (08:30 ET)
- November 4: US ISM Non-Manufacturing PMI (10:00 ET)
- November 6: US Employment Situation Report (08:30 ET)
- November 10: US Consumer Price Index (08:30 ET)
Markets, FX, reserves: fmd-data (). Central bank moves + fuel benchmarks + calendar: grounded via Google Search at publish time.