In the Middle East, President Donald Trump stated that a decision must be made regarding whether to reach an agreement with Tehran or to proceed with attacks. He also noted that no attacks against Iran took place on Sunday.
Meanwhile, the threat from the Houthis persists, though Riyadh’s airport has reopened for commercial flights. These developments have slightly eased immediate concerns, yet the risk of disruptions to oil supplies and trade routes remains high.
Macro Sentiment: The market enters a week packed with central bank meetings and economic data. The Fed, the ECB, and the Bank of Japan are expected to keep interest rates unchanged; however, persistent inflation, high energy costs, and elevated bond yields are fostering a cautious tone.
Markets will be scrutinizing the language used by central banks for clues as to when the next rate hike might occur. The Fed meeting is taking place from October 27–28, with the decision scheduled for Wednesday (US time).
Key items to watch today:
EUR: The German Ifo Business Climate Index is scheduled for release at 5:00 PM MYT. The forecast is around 89.8, compared to the previous reading of 89.9; any surprise in the actual figure could move the euro.
USD: The Chicago Fed National Activity Index and the Dallas Fed Manufacturing Index are scheduled for 8:30 PM and 10:30 PM MYT, respectively. Also, keep an eye on the US two-year bond auction, which could influence bond yields and the dollar.
Oil and Iran–Houthi developments: Movements in oil prices could affect inflation expectations, bond yields, and demand for safe-haven assets. Monitor headlines and price shifts closely—do not assume that an initial dip in oil prices means the risks have subsided.
Looking ahead this week: The focus shifts to the Fed on Wednesday, followed by the ECB decision and US data on Thursday, and the Bank of Japan on Friday. Reduce position sizes or clearly define your risk if trading ahead of an announcement.
Key takeaway for today’s trading: Short-term signals remain mixed. A slight decline in oil prices could ease inflationary pressure, but geopolitical tensions and the approaching Fed meeting may trigger sharp volatility. Prioritize price reactions to data and news headlines; avoid chasing market movements before they are confirmed.
