GGMA Markets Briefing: Oil Eases After Trump Rules Out Iran Strikes Before Midterms as Stock Futures Rise
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Here is a brief summary of today’s Markets Briefing: Oil Eases After Trump Rules Out Iran Strikes Before Midterms as Stock Futures Rise
· Oil fell after President Donald Trump said the US will not attack Iran before the midterm elections, though the naval blockade stays in place and a hurricane has shut in most of the US Gulf's crude output.
· Fed officials Alberto Musalem and Christopher Waller both expect further rate rises, Waller with flexibility on timing, and the 30-year Treasury auction drew above-average demand.
· US stock futures rose after a report that OpenAI expects higher annualised revenue by year-end than a previous report suggested; Firmus Grid abandoned its IPO and Apple cut iPhone orders on soft demand.
· Christine Lagarde said the ECB has tools to counter disorderly market moves and sees no sign yet of inflation broadening, and three Governing Council members said inflation expectations remain anchored.
· Japan's cabinet approved a temporary cut in the consumption tax on food, though Komeito's leader said his party may not back it, and household spending fell again on the year.
· Hang Seng futures rose as Xiaomi jumped on strong orders for its new SUV, and new home sales in major Chinese cities rose during the National Day holiday.
Today's Macro Roadmap: Canada's jobs report at 14:30 CET, the University of Michigan's sentiment survey at 16:00 CET, and the ECB's Cipollone and Schnabel and the Fed's Collins among the central-bank speakers.
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GGMA Markets Briefing: Oil Eases After Trump Rules Out Iran Strikes Before Midterms as Stock Futures Rise
Oil fell and US equity-index futures rose after President Donald Trump said the US will not attack Iran before the 3 November midterm elections, citing "productive discussions" with Tehran (Reuters) (CNBC). Brent fell 1.2% to 103.02 dollars after jumping more than 4% yesterday (CNBC).
S&P 500 futures rose 0.3% and Nasdaq 100 futures 0.6% after people familiar with the matter said OpenAI expects annualised revenue of $70bn or more by year-end, following yesterday's tech-led losses on a report that its run rate was nearer $50bn (BBG). Treasuries held yesterday's gains and gold advanced (BBG).
In stocks, S&P 500 futures stood at 7,841 and Nasdaq 100 futures at 31,164, and Dow futures rose 0.2% to 51,589. On Wall Street yesterday, shares fell and a gauge of chipmakers slid 3.4% after a Financial Times report on OpenAI's revenue (BBG). A gauge of Asian shares rose 0.3% this morning (BBG). Hang Seng futures rose 1.7% to 24,173 as Xiaomi jumped more than 9% on strong first-month orders for its SkyNomad SUV, and BYD and Li Auto each gained more than 4% (BBG). Nikkei futures edged up 0.1% to 69,180, and MSCI emerging-markets futures rose 1.0% to 1,706. Euro Stoxx 50 futures rose 0.7% to 6,190 and FTSE 100 futures 0.9% to 10,576. Brazilian stocks are set for a 7.6% weekly gain and the real is up 4% this week after Flávio Bolsonaro led the first round of the presidential election, and hedge funds that bet on that outcome see room for more gains before the 25 October runoff (BBG).
Regarding the Fed, St. Louis Fed President Alberto Musalem said "more monetary policy firming will be required" and that, if a timely return to target means about 18 months, rates "ought to be going up further" in the next six to nine months (Reuters) (BBG). He said he had not prejudged the 28 October decision, that the labour market is balanced and stable, and that real yields have risen mainly on policy-rate expectations (BBG). Governor Christopher Waller said he anticipates additional hikes but that "there is some flexibility about when those hikes will occur", and that they need not come at consecutive meetings (Reuters). New York Fed research found that tariffs left the prices of 67 categories of goods 2.9 percentage points higher as of February than they would otherwise have been (CNBC).
In the euro area, President Christine Lagarde told finance ministers that the ECB has instruments to counter unwarranted, disorderly market dynamics, subject to clear eligibility criteria, and that there are no signs yet of inflation broadening (BBG). Governing Council members Primož Dolenc, Yannis Stournaras and Olaf Sleijpen said longer-term inflation expectations remain anchored, damping bets on a near-term rise (Reuters). The account of the September meeting showed that all members saw the risks to inflation tilted to the upside (Reuters). In Sweden, Riksbank Governor Erik Thedéen said the economy has performed better than expected, giving strong reasons to raise the policy rate in the near term (Investing.com). The NZZ profiles Martin Brown, the Swiss National Bank's new chief economist, whose staff prepare the groundwork for its rate decisions (NZZ).
In Japan, Prime Minister Sanae Takaichi said the government will keep scrutinising currency and price moves and respond appropriately, a day after saying it fully respects the Bank of Japan's independence (Reuters). The cabinet approved the bill to cut the consumption tax on food to 1% from 8% for two years from April (LS) (BBG), but Komeito leader Mitsunari Okamoto said his party may not support it, calling the cut an inefficient response to rising prices (Kyodo). The government plans to scrutinise unused funds of as much as 7 trillion yen to help pay for Takaichi's priorities, and Finance Minister Satsuki Katayama called the review essential (BBG).
Currently, STIR traders price 4 basis points of tightening for the Fed's October meeting, a 17% probability of a rate rise, and 24 basis points cumulatively by December. For the ECB, markets price 3 basis points for the October meeting, an 11% probability, and 21 basis points by December. For the Bank of Japan, markets price 3 basis points for the October meeting, a 10% probability, and 21 basis points by December. For the Bank of Canada, which faces today's jobs report, markets price 8 basis points for the October meeting, a 32% probability of a rate rise, and 27 basis points by December. For Norges Bank, markets price 4 basis points for the 5 November meeting, a 15% probability of a rate rise, and 15 basis points by December.
In currencies, the dollar index eased 0.1% to 102.00 (BBG). The euro rose 0.2% against the dollar to 1.123 and sterling 0.1% to 1.3239. The yen weakened 0.2% against the dollar to 158.17. The Australian dollar rose 0.4% against the US dollar to 0.6983. The yuan firmed 0.1% offshore to 6.6973 per dollar as hopes of de-escalation in the Middle East lifted Asian currencies, and the People's Bank of China rejected claims that the yuan is undervalued as trade talks with the European Union began (BBG). The Norwegian krone firmed 0.1% to 9.5539 per dollar, and the won was little changed at 1,341.92.
In bonds, Treasuries held yesterday's gains (BBG). The ten-year yield was little changed at 5.23% and the two-year at 4.76%, and the 30-year yield rose 1.0 basis point to 5.61%. Yesterday's 30-year auction drew a high yield of 5.618% and a bid-to-cover ratio of 2.54, above the 2.43 average of the previous ten sales (RTTNews). In Japan, the ten-year yield fell 7.6 basis points to 3.02% and the two-year 3.2 basis points to 1.92%. Japanese companies sold a record $91.8bn of foreign-currency bonds in the six months to September, and global banks are adding debt-market staff in Tokyo (BBG). Vishal Khanduja, who co-manages the Eaton Vance Total Return Bond Fund, is bullish on US debt for the first time in a decade and has raised the fund's duration above its benchmark (BBG). Congressional Budget Office Director Phillip Swagel said growth alone is unlikely to stabilise US debt, which would need annual growth of at least 5% with interest rates at 4% (BBG). The CBO estimates the fiscal-2026 deficit at $2.0 trillion, $218bn more than a year earlier (CBO). In Europe, Economic Commissioner Valdis Dombrovskis urged fiscal prudence "in the light of current bond market developments", pushing back on Italy's and Greece's calls for more leeway (BBG). A Move proxy rose 0.9 point to 101.8.
In commodities, oil extended its retreat in Asia and WTI fell 1.2% to 90.43 dollars (BBG). Iran's Fars news agency reported explosions in Hormuz as tankers struck mines, without independent confirmation, and Trump said 22 million barrels passed through the strait overnight, more than recent industry estimates (BBG). Kpler data show about 9.5 million barrels a day left Hormuz in the week to Tuesday, about 30% below pre-war levels (CNBC). Producers have shut in about 1.3 million barrels a day of US Gulf crude, more than 60% of the region's output, before Hurricane Isaias makes landfall late Friday or early Saturday (BBG). China approved a non-state crude import quota of 257 million tonnes for 2027 (LS), and will resume refined-fuel exports this month, with about 3.7 million tonnes approved (Reuters), and US refiners are set for record third-quarter earnings after diesel prices reached a record (WSJ). Gold rose 1.5% to 4,195 dollars as long-dated Treasury yields pulled back from their highest in more than two decades (BBG), and the People's Bank of China is expected to keep adding to its gold reserves (WSJ). Copper rose 1.3%. This year's El Niño is set to be the most intense on record, and heavy rain in Brazil is leaving sugar cane unharvested (BBG). Bitcoin rose 0.7% to 82,351 dollars and Ethereum 0.8% to 2,492 dollars. Citrini Research said agentic finance built on blockchains marks a "new paradigm" for crypto investing (BBG).
In geopolitics, Trump said the US naval blockade of Iran will stay in place (CNBC). A US Treasury official said Iran has stopped loading and offloading crude tankers because of the blockade, and Iran's Revolutionary Guards said they will use drones and missiles to guard the Strait of Hormuz (LS). The Pentagon has drawn up options for a three-day campaign against Iran's missile and drone arsenal and energy facilities, though Trump has vetoed five proposals for major operations in recent months (NYT). Iran's nuclear chief, Mohammad Eslami, said Tehran will not abandon uranium enrichment or hand over its stockpile (Dawn). EU governments expect the Irish presidency to cut the proposal for the bloc's next seven-year budget by €100bn to €200bn on Saturday, before next week's leaders' summit (Politico).
In corporate news, Apple has cut orders for the iPhone 18 Pro on soft demand, Nikkei reported (LS). SoftBank Group is seeking to raise as much as $100bn from Gulf investors to expand its bets on AI, the Financial Times reported (BBG). Nvidia-backed Australian data-centre company Firmus Grid abandoned its initial public offering (Slashdot) (BBG). Oracle's data-centre revenue may be deferred if some large projects are held up, with implications for its debt, and the company is trucking natural gas to server farms to avoid power delays (BBG). The Trump administration suspended Microsoft, Adobe and other companies from a worker-visa programme over alleged abuse, and SpaceX acquired low-band spectrum to turn Starlink into a mobile carrier (BBG).
In other news, this article caught my eye: China's AI race against the US hinges on harnessing its green-energy advantage (BBG). About 9% of China's wind and solar output was wasted in the first half for lack of grid capacity, and BloombergNEF estimates the country needs to invest $3.9 trillion in its grid through 2049.
Data and the day ahead: Japan's household spending fell 3.1% y/y in August, less than the 3.6% decline expected and after a 3.6% drop in July, a ninth straight fall (BBG). New home sales in 25 major Chinese cities rose 15% y/y during the National Day holiday (LS). Norway's inflation rate rose to 3.4% y/y in September from 3.3%, below the 3.6% consensus, and prices rose 0.5% on the month (Statistics Norway). The CPI-ATE core measure held at 3.0% y/y, below the 3.1% expected, and rose 0.2% m/m against a 0.3% consensus (Statistics Norway). Still to come: Switzerland's SECO consumer confidence index at 09:00 CET, where consensus looks for -31.5 from -32.8. Canada's labour force survey follows at 14:30 CET, where consensus looks for the unemployment rate to edge up to 6.5% from 6.4%, and the University of Michigan's preliminary October survey at 16:00 CET, where consensus looks for sentiment of 47.6 from 48.1. Speakers include the ECB's Cipollone at 12:15 and Schnabel at 15:30 CET, and the Fed's Collins at 22:00 CET. On Monday, US bond markets close for Columbus Day and Tokyo for a public holiday (InvestingLive).
Time Stamp: 9 October 2026, 08:03 CET