15/09/2026 – Daily Reports
Dollar Gains Momentum as Oil Shock Fuels Fed Rate Hike Bets
- The U.S. dollar climbed to a near two-week high as surging oil prices pushed Treasury yields higher and reinforced expectations for a Fed rate hike on Wednesday.
- Markets are now pricing in a roughly 93% probability of a Fed hike, which would be the first increase in more than three years.
- Brent crude rose toward $107 as renewed Middle East tensions and postponed Gulf-Iran talks intensified concerns over energy supply disruptions.
- The U.S. 10-year Treasury yield briefly breached 5% for the first time since October 2023 before easing back to around 4.99%.
- Strong U.S. jobs and inflation data have strengthened expectations for another rate hike by March, although analysts see limited room for further hawkish surprises.
- The yen weakened to around 154.72 ahead of Friday’s expected BOJ rate hike, despite speculative positioning turning net long JPY for the first time since February.
- The euro slipped to $1.1538, while sterling eased to $1.3494 as the stronger dollar weighed on major currencies.
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- Markets remain cautious ahead of the Fed meeting. Markets are pricing around a 90% probability of a 25bp rate hike tomorrow. The U.S. 10-year Treasury yield is approaching 5%, while the dollar remains firm. The key focus will be the Fed’s guidance on the future rate path.
- Oil prices are rising again. Renewed Houthi attacks on Saudi Arabia and supply concerns around the Strait of Hormuz pushed Brent toward $107 and WTI toward $102.7. Oil above $100 remains a major inflation and Fed policy risk.
- Gold remains under pressure from elevated Treasury yields and expectations for tighter Fed policy, trading around $4,300. Geopolitical tensions provide safe-haven support, but higher rates are limiting upside.
- U.S. equities remain cautious as higher oil prices and Treasury yields weigh on risk appetite. Recent weakness in AI-related stocks is also creating additional pressure on the Nasdaq. The key market drivers this week are the Fed decision, oil prices and Treasury yields.
