Four central banks met this week, and not one of them moved. Our weekly market sentiment read is that policy stayed hawkish while the oil story kept running.
The Fed, the ECB and the Bank of Japan all held, and the RBNZ surprised with a hold too. Every one of them left the door open to a December hike.
We flagged the oil rally in last week’s market report, and this week it pushed Brent to a fresh six-month high. A sharp selloff in AI shares then rattled stocks into the weekend.
Weekly Market Sentiment Dashboard
| Symbol | Rating | Reason |
|---|---|---|
| Currencies | ||
| GBP | 🟡 ⬆️ Weak Bullish | Firming into Thursday’s BoE decision. |
| USD | ⚪ ➡️ Neutral | Flat as a bond bid capped it. |
| EUR | 🟠 ⬇️ Weak Bearish | Softest major after the ECB hold. |
| JPY | 🟠 ⬇️ Weak Bearish | Yen slipped despite a hawkish BoJ. |
| AUD | ⚪ ➡️ Neutral | Flat before Tuesday’s RBA decision. |
| NZD | 🟠 ⬇️ Weak Bearish | Fell on the RBNZ surprise hold. |
| CHF | ⚪ ➡️ Neutral | Franc little changed on the week. |
| DXY | ⚪ ➡️ Neutral | Held near 101.96, barely moved. |
| Indices | ||
| Nasdaq | 🟠 ⬇️ Weak Bearish | AI selloff drove it sharply lower. |
| ES | 🟠 ⬇️ Weak Bearish | Slid with the cash index. |
| S&P 500 | 🟠 ⬇️ Weak Bearish | Fell as tech names led down. |
| Dow Jones | 🟠 ⬇️ Weak Bearish | Caught in the broad risk-off. |
| Commodities | ||
| Gold (XAU) | 🟠 ⬇️ Weak Bearish | Yearly low on Fed hike bets. |
| Oil (Brent) | 🟡 ⬆️ Weak Bullish | Six-month high on Hormuz supply. |
Geopolitical Spotlight
The week’s biggest geopolitical story stayed in the Gulf. A record run of tanker attacks near the Strait of Hormuz, part of the wider Iran war, cut crude flows and kept a supply premium in the oil price.
Brent crude hit a six-month high during October, up +13.6% on the month. Gulf flows fell to 7.3 million barrels a day in the week to 28 October, from about 11 million normally.
The shock worked through inflation rather than the usual haven trade, because dearer energy lifts headline prices and feeds straight into what the big central banks must decide next. Markets then pushed their bets on a December hike higher.
That is why gold fell instead of rising, and the dollar barely moved. OPEC+ then kept its December output targets unchanged on 1 November, so the supply relief traders wanted did not come.
The desk at City Traders Imperium is watching the Gulf for the next supply headline.
The Gulf stays the swing factor for oil and for inflation into the next two weeks. More damage to Gulf energy sites would push Brent higher and keep the hike talk alive.
A calmer stretch, or real OPEC+ barrels, would let prices ease back. Watch Brent at $120, the level a deeper disruption could reach.
What would change our view: a clear de-escalation around the Strait of Hormuz that strips the supply premium out of Brent.
Sources: CNBC, Arab News, The National.
Forex Markets
The dollar ended the week almost flat. DXY sat at 101.96, up +0.2%, as a hawkish Fed was offset by a bond bid during the stock selloff.
The Fed held its target range at 3.75% to 4.00% on 28 October. Two policymakers dissented in favour of a hike, and markets now price a December move.
The ECB held its deposit rate at 2.50% the next day, and President Lagarde signalled an early departure. EUR/USD was the laggard, down -0.4% to 1.1158 as the euro slipped.
GBP/USD firmed +0.1% to 1.3392, holding near a one-month high as traders leaned into Thursday’s BoE decision. Sterling is the one major with a live rate rise on the calendar.
The yen could not hold its bid. USD/JPY rose to 157.56, so the yen slipped -0.5%, even though the Bank of Japan held at 1.25% in a hawkish 8-1 vote.
The kiwi was the worst major. NZD/USD fell -1.0% to 0.5631 after the RBNZ surprised markets with a hold at 2.75%, while AUD/USD held flat at 0.7032 and USD/CHF was little changed at 0.8250.
Currencies to Watch
AUD/USD. The Aussie sits at 0.7032 into Tuesday’s RBA decision.
Markets price a 25bp hike to 4.85%. A hike with hawkish guidance would lift the Aussie, while any hint of a pause would unwind those bets.
GBP/USD. The pound trades at 1.3392 before Thursday’s BoE decision.
A 25bp rise to 4.00% is priced. The reaction turns on the vote split and the tone of the guidance.
USD/JPY. The pair trades at 157.56, back near the zone that has drawn official pushback.
Governor Ueda speaks on Friday. Any hint on the timing of the next hike would move the yen fast.
The majors take their cue from two rate decisions and the US jobs report over the next two weeks. The RBA on Tuesday and the BoE on Thursday both look set to raise, while Friday’s payrolls test the Fed’s December path.
A hot payrolls print would harden the hawkish case and lift the dollar. Watch DXY at 102.50, the level that would signal the dollar is breaking higher.
What would change our view: a soft US payrolls number on Friday that pulls December hike bets lower and knocks DXY back below 101.00.
Sources: Trading Economics, Federal Reserve, European Central Bank, Bank of Japan.
Indices
US stocks fell as the AI selloff returned with force. The Nasdaq dropped -2.0% to 25,437, a third straight weekly fall that leaves the index well below the record high it set in early October.
Friday did most of the damage. Weak results from Intel and Amazon revived doubts about how much AI spending is paying off, and Intel fell -28.6% on the day.
The S&P 500 slipped -0.6% to 7,580, and its E-mini future, ES, settled near 7,614. The Dow Jones lost -0.9% to 51,770, so the selloff spread well beyond tech this week.
Higher hike bets and the oil premium added to the caution. By the close, risk-off had won.
Tech still sets the tone into the next two weeks, and the US jobs report lands on Friday. If the AI names keep sliding, the S&P 500 and Nasdaq have more room to fall.
A steadier bond market would let buyers step back in. Watch the Nasdaq at 25,000, the level that would confirm a deeper pullback.
What would change our view: a bounce in the AI leaders that pulls the Nasdaq back above 26,500 and restores the risk-on tone.
Sources: Reuters, Chartprofit.
Gold and Oil
Gold had another brutal week. It fell -3.0% to $3,876, a fresh yearly low, and is now down -7.0% across October after a second straight monthly decline driven by rising rate-hike bets.
The cause was the rate picture, not the dollar. Fed hike bets and firmer real yields punish a metal that pays no yield, and the Friday stock selloff forced more selling.
Oil told the opposite story. Brent‘s December contract expired at a six-month high of $117.64, up +0.8% on the week, while the new January contract leads near $113.43.
The supply premium, not demand, is doing the work. OPEC+ left December output unchanged, so every Gulf headline still moves the price.
Oil leans on the supply story more than demand into the next two weeks. Fresh disruption would push Brent toward $120, while a calmer Gulf would let it slip back.
Gold now hangs on the Fed path and on yields. Watch gold at $3,800, the floor it is testing after this week’s fall.
What would change our view: a soft US jobs print that pulls real yields lower and lets gold climb back above $4,000.
Sources: Trading Economics, FinanceFeeds, EnergyNow.
What happened this week
- The Fed, the ECB and the Bank of Japan all held, and the RBNZ surprised with a hold too.
- Brent crude hit a six-month high as tanker attacks near the Strait of Hormuz cut Gulf supply.
- Gold fell -3.0% to $3,876, a yearly low, on rising Fed hike bets.
- An AI selloff dragged the Nasdaq down -2.0% to 25,437, with Intel off sharply.
- The dollar held flat, with DXY at 101.96, as a bond bid offset the hawkish Fed.
What to watch next week
- Tuesday 3 November, 03:30 GMT: RBA cash rate decision, seen at 4.85%, a 25bp hike priced.
- Tuesday 3 November: US congressional midterm elections, with results overnight.
- Wednesday 4 November, 10:00 GMT: euro area flash CPI, seen at 4.0% year over year.
- Thursday 5 November, 12:00 GMT: BoE decision, seen at 4.00%, a 25bp hike priced.
- Friday 6 November, 13:30 GMT: US non-farm payrolls, seen at +63,000.
For informational purposes only. Not financial advice.
