Oil did the talking this week. Our weekly market sentiment read is that an energy-driven inflation scare, not the dollar, set the tone across every market.
Brent crude surged to $116.72, a six-month high, while gold fell below $4,000. That is an unusual pairing, and it tells you what drove the week.
We flagged the oil rally in last week’s market report, and this week it ran further as a wall of central bank decisions came into view.
Weekly Market Sentiment Dashboard
| Symbol | Rating | Reason |
|---|---|---|
| Currencies | ||
| GBP | 🟡 ⬆️ Weak Bullish | Hit a one-month high this week. |
| USD | ⚪ ➡️ Neutral | Flat on the week, mixed against majors. |
| EUR | 🟠 ⬇️ Weak Bearish | Weakest major, slipped against the dollar. |
| JPY | 🟡 ⬆️ Weak Bullish | Haven bid, strongest since September. |
| AUD | 🟡 ⬆️ Weak Bullish | Firmest major before Wednesday’s CPI. |
| NZD | 🟡 ⬆️ Weak Bullish | Firmed into Wednesday’s RBNZ decision. |
| CHF | ⚪ ➡️ Neutral | Haven bid left it flat. |
| DXY | ⚪ ➡️ Neutral | Held near 101.75 on the week. |
| Indices | ||
| Nasdaq | 🟠 ⬇️ Weak Bearish | Tech selloff dragged it lower. |
| ES | 🟠 ⬇️ Weak Bearish | Slipped with the cash index. |
| S&P 500 | 🟠 ⬇️ Weak Bearish | Fell as tech names led lower. |
| Dow Jones | 🟡 ⬆️ Weak Bullish | Second weekly gain on value rotation. |
| Commodities | ||
| Gold (XAU) | 🟠 ⬇️ Weak Bearish | Worst week since June, below $4,000. |
| Oil (Brent) | 🟡 ⬆️ Weak Bullish | Six-month high on Middle East supply. |
Geopolitical Spotlight
The week’s biggest geopolitical story was a fresh supply shock in Middle East energy. Houthi strikes on Saudi energy sites, attacks on shipping near the Strait of Hormuz, and a UAE oil spill all hit in the same few days.
Brent settled at $116.72, up +6.2% on the week, its highest close since April. The Houthis claimed hits on Aramco facilities and the Shaybah oilfield, and traders priced the risk of a wider disruption to Gulf flows.
The shock hit through inflation rather than the usual haven trade. Dearer energy lifts headline prices, so markets raised their bets on Fed rate hikes into year end.
That flipped the normal script. Gold fell hard instead of rising, and the dollar barely moved, because the fear this time was inflation, not recession.
The desk at City Traders Imperium is watching the Gulf for the next headline.
The Gulf stays the swing factor for oil and for inflation into the next two weeks. More damage to Saudi or Gulf energy sites would push Brent higher and keep the rate-hike talk alive.
A calmer stretch would let ample supply elsewhere pull prices back. Watch Brent at $120, the level HSBC says a stalemate could reach.
What would change our view: a clear de-escalation around Saudi and Gulf energy sites that strips the supply premium back out of Brent.
Sources: Reuters, The Star, Euronext.
Forex Markets
The dollar went nowhere as a whole, but the moves beneath it were not even. DXY ended little changed at 101.75, down -0.1% on the week, firmer against Europe and softer against everything else.
GBP/USD led the majors, up +0.4% to 1.3378 and a one-month high, even after UK retail sales fell -0.4% in September. The pound shrugged off the soft data and leaned on a steadier risk mood.
EUR/USD was the laggard, down -0.3% to 1.1202 as the euro slipped against a firmer dollar. The havens did better, with USD/JPY down to 156.81, the yen’s strongest since September, and USD/CHF at 0.8243 as the franc held a bid.
The commodity currencies firmed with oil. AUD/USD rose +1.1% to 0.7023, the week’s best major, and NZD/USD added +0.7% to 0.5687 ahead of its own central bank.
Currencies to Watch
NZD/USD. The kiwi sits at 0.5687 into Wednesday’s RBNZ decision.
Markets price a 25bp hike to 3.00%. A hold, or dovish guidance, would undo the kiwi’s recent gains.
AUD/USD. The Aussie led the majors into Wednesday’s third-quarter CPI.
Headline inflation is seen at 4.2% year over year. A hot print would firm the case for the RBA to stay on hold for longer.
USD/JPY. The pair trades at 156.81, back near the zone that has drawn official pushback.
The BoJ decides on Friday. A surprise on rates or guidance would move the yen fast.
Four central banks report in four days, so the majors take their lead from the calendar, not the charts. The Fed on Wednesday, the ECB on Thursday, and the BoJ on Friday all land inside the next two weeks.
A hold is expected from the Fed, but the oil-led inflation scare has pushed December hike bets higher. Watch DXY at 101.00, the floor that has held through the pullback.
What would change our view: a hawkish Fed on Wednesday that revives near-term hike bets and pushes DXY back above 102.50.
Sources: FXStreet, Morningstar, Yahoo Finance, Federal Reserve.
Indices
US stocks stayed split along the tech line. An AI and chip selloff kept the pressure on and dragged the Nasdaq down -0.7% to 25,955, with semiconductors taking the worst of it.
The S&P 500 fell -0.5% to 7,624, and the S&P 500 E-mini future (ES) settled near 7,660, back below 7,700. A sharp Friday drop wiped out part of the week’s earlier steadiness.
The Dow Jones went the other way again. It added +0.4% to 52,215 for a second straight weekly gain, as money kept rotating into value and defensive shares.
The oil spike and higher rate-hike bets added to the caution. Wall Street’s fear gauge pushed above 20 for the first time since June.
Tech still sets the tone for the broad market into the next two weeks, and a heavy run of earnings lands alongside the Fed. If the chip selloff deepens, the S&P 500 and Nasdaq have more room to fall even as the Dow holds up.
A steadier bond market and a calm Fed would let buyers step back in. Watch the Nasdaq at 25,500, the level that would confirm a deeper pullback.
What would change our view: a bounce in the AI and chip leaders that pulls the Nasdaq back above 27,000 and restores the risk-on tone.
Sources: Investomine, Yahoo Finance.
Gold and Oil
Gold had its worst week since June. It fell -4.1% to $3,996, broke below $4,000, and touched a three-month low along the way.
The cause was the oil surge, not a change in the dollar. Dearer energy lifted inflation worries, Fed hike bets rose, real yields climbed, and that combination is poison for a metal that pays no yield.
Oil was the week’s big mover. Brent rose +6.2% to $116.72, its highest close since April, after Houthi strikes on Saudi energy sites and attacks near the Strait of Hormuz.
The supply premium, not demand, is doing the work. That keeps oil at the mercy of every headline out of the Gulf.
Oil leans on the supply story more than demand into the next two weeks. Fresh disruption would push Brent toward $120, while calmer Gulf headlines would let it slip back.
Gold now hangs on the Fed and on yields. Watch gold at $4,000, the line it just lost and now needs to reclaim.
What would change our view: a dovish Fed on Wednesday that pulls real yields lower and lets gold climb back above $4,100.
Sources: CNBC, FXStreet, Reuters.
What happened this week
- Brent crude jumped +6.2% to $116.72, a six-month high, on Middle East supply risk.
- Gold fell -4.1% to $3,996, below $4,000 and its worst week since June.
- The dollar barely moved, with DXY down -0.1% to 101.75.
- An AI and chip selloff pushed the Nasdaq down -0.7% to 25,955.
- The Dow Jones rose +0.4% to 52,215 for a second straight weekly gain.
What to watch next week
- Wednesday 28 October, 00:30 GMT: Australia third-quarter CPI, seen at 4.2% year over year.
- Wednesday 28 October, 01:00 GMT: RBNZ cash rate decision, seen at 3.00%, a 25bp hike priced.
- Wednesday 28 October, 18:00 GMT: Fed decision, seen at 4.00%, a hold priced.
- Thursday 29 October, 13:15 GMT: ECB decision, seen at 2.65%, a hold priced.
- Friday 30 October, 02:30 GMT: BoJ decision, a hold priced.
For informational purposes only. Not financial advice.
