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Summary:
- Oil rose on escalating Saudi-Houthi hostilities and a storm heading for US Gulf oil regions
- Houthi claims of strikes on Riyadh’s main airport and other Saudi sites remain unconfirmed by Saudi authorities
- Gold slipped as the dollar and yields firmed. China’s central bank added to its gold reserves for a 23rd straight month in September
- The dollar gained across major currencies, with USD/JPY rising towards 158.50 and EUR/USD dipping below 1.1240
- FOMC minutes are due on Wednesday at 2:00 pm ET (18:00 GMT), and Chinese markets reopen on Thursday after the Golden Week holiday
- In company news, Elon Musk’s SpaceX is seeking to raise $40 billion, led by Apollo, to buy Nvidia AI chips, the FT reported, with about $10 billion in bank loans and $30 billion in investment-grade debt
Oil
Oil prices rose on Wednesday, with US West Texas Intermediate crude returning above $90 a barrel, as continued hostilities between Saudi Arabia and Yemen’s Iran-backed Houthis and a storm approaching US oil-producing regions raised concern about supply disruptions.
The storm forming in the Gulf of Mexico is expected to become the first Atlantic hurricane of 2026 and could affect offshore production and coastal refineries. Separately, the Houthis said they attacked Riyadh’s King Khalid International Airport, Abha Airport and an air base at Khamis Mushait. Saudi authorities had not confirmed those claims. Confirmed attacks on airports in Jazan and Najran on Monday injured three people.
Gains were capped by better supply news earlier in the week. Industry data from the American Petroleum Institute showed a drop in US crude stocks last week, and official Energy Information Administration figures are due at 10:30 am ET (14:30 GMT).
Gold
Gold edged lower as the dollar firmed and Treasury yields rebounded alongside oil. China’s central bank extended its gold buying to a 23rd consecutive month in September, official data showed. The People’s Bank of China’s holdings rose to around 77.5 million fine troy ounces at the end of the month from around 76.7 million in August.
China has kept buying despite sharp swings in prices this year. The value of its gold reserves fell to around $324 billion from around $350 billion a month earlier, reflecting a decline of more than 6% in gold prices during September.
Currencies and rates
The US dollar gained against major currencies. USD/JPY rose towards 158.50, while EUR/USD slipped back below 1.1240. Treasuries fell about seven ticks, with yields rebounding in step with oil prices as traders awaited the minutes of the Federal Reserve’s most recent policy meeting.
Asia-Pacific
In Japan, real wages rose for an eighth straight month in August, while a Reuters survey showed manufacturer confidence near a five-year high even as service-sector sentiment fell sharply. Bank of Japan board member Ayano Sato, who opposed September’s rate hike, said she supports raising rates gradually without a pre-set pace.
In Australia, internal Reserve Bank documents reported by Bloomberg showed staff modelling of the spending impact of a correction in AI stocks. Deutsche Bank said households are proving more resilient to rate hikes than expected.
The Reserve Bank of India announces its policy decision at 04:30 GMT, with most economists expecting a 25 basis point hike to 5.50%.
Ahead
FOMC minutes are due on Wednesday at 2:00 pm ET (18:00 GMT). Chinese markets reopen on Thursday, 8 October, after the Golden Week holiday.
This article was written by Eamonn Sheridan at investinglive.com.