Brent back over $100. Yields and the dollar follow

Rundown · 2026-10-07

Tuesday's relief trade has reversed overnight, and oil is the cause again. Brent is $101.77, +$1.19 (+1.18%), back above $100 after Yemen's Houthis claimed missile and drone strikes on Riyadh's King Khalid airport and other Saudi sites, on top of a reported increase in Iranian attacks on tankers in Hormuz. The 10-year is 5.333%, +4.4bp, above Monday's 5.312% close, which was the highest since 2002. DXY is 102.28, +0.44%, and EUR/USD is 1.1192, -0.61%, as French yields jump 14bp. ES is 7,858.75, -15.25 (-0.19%), sitting on its overnight low, a session after the S&P 500 closed at a record 7,818.93. Gold is down $45 at $4,142.10. There is no US data at 08:30. The day is back-loaded: the 10-year auction at 13:00 and the FOMC minutes at 14:00.

Overnight

Against Tuesday's settles, as of about 06:40 ET (delayed, MarketWatch). ES (Dec) 7,858.75, -15.25 (-0.19%) from 7,874.00 · NQ 31,325.75, -157.50 (-0.50%) from 31,483.25 · YM 51,607, -209 (-0.40%) from 51,816 · RTY 2,833.2, -15.0 (-0.53%) from 2,848.2
Tuesday's settles reconcile with Monday's. ES +47.75 (+0.61%) from 7,826.25 · NQ +165.50 (+0.53%) from 31,317.75 · YM +258 (+0.50%) from 51,558 · RTY -19.6 (-0.68%) from 2,867.8. TradingView's daily bars match all four
Reference levels, and nothing more. Globex ranges so far (MarketWatch and TradingView agree): ES 7,856.75-7,884.50 · NQ 31,317.25-31,521.00 · YM 51,573-51,860 · RTY 2,831.9-2,850.9. All four are trading at or near the bottom of their ranges. Tuesday's RTH-session highs were records for ES at 7,897.50 and NQ at 31,616.50. Tuesday's ES low was 7,829.00
NQ is leading lower, down about 2.6 times as much as ES in percentage terms. Semis are soft pre-market: MU -2.8%, AMD -1.6%, AVGO -1.1%
Asia was lower. Nikkei 70,035.71, -648.27 (-0.92%), giving back most of Tuesday's gain. Hang Seng 24,130.50, -150.06 (-0.62%). Mainland China reopens on Thursday. Japan's coincident index fell to 118.7 from 120.6. The JGB 10-year is 3.113%, close to its 52-week high of 3.124%
Europe is down about 1%, and Germany is worst despite good data. DAX 25,109.51, -1.33% · CAC 40 7,779.51, -1.09% · STOXX 600 630.96, -0.89% · FTSE 100 10,467.60, -0.70% (mid-session, MarketWatch). German industrial production rose 2.0% in August against 0.5% expected (Destatis, via TradingView's calendar), after a 10.6% fall in factory orders on Tuesday. Equities are trading the oil and rates move, not the German data
Saudi Arabia and Yemen. The Houthis say they hit King Khalid International Airport in Riyadh, Abha airport and military sites in Khamis Mushait and Najran overnight (AP; Al Jazeera reports Saudi forces downed a missile near Riyadh). This follows a Saudi-backed offensive on Yemen's west coast. On Tuesday, the UK's maritime agency reported nine vessels targeted by Iran in recent days (Barchart)

The Dollar & FX

DXY 102.28, +0.44 (+0.44%) from Tuesday's 101.83 (ICE, via MarketWatch), range 101.89-102.33. The 52-week high is 102.54, from Monday. Tuesday's close was down 0.34 from Monday's 102.17 as oil fell. The dollar is rising for the same two reasons it rose on Monday: Europe, and oil feeding into rate-hike pricing. Trading Economics says markets price about 85bp of Fed hikes and 75bp of ECB hikes by the end of next year
6E is carrying the move. EUR/USD 1.1192, -0.0069 (-0.61%) from 1.1261, range 1.1180-1.1267. The 52-week low is 1.1162, from Monday's Asian session, a 17-month low. The French 10-year is 4.896%, +14.1bp from 4.755%, against 3.521% for the Bund (MarketWatch). That spread is about 138bp, up from about 126bp at Tuesday's close, so it has undone Tuesday's improvement. France's fiscal watchdog called the government's deficit-plan assumptions "optimistic", and Spain has called a snap election for 29 November (Trading Economics)
6B is following. GBP/USD 1.3218, -0.0058 (-0.44%) from 1.3276, range 1.3216-1.3280. The gilt 10-year is 5.474%, +9.2bp, close to its 52-week high of 5.538%. Higher gilt yields are not helping sterling today
6C is the steadiest major. USD/CAD 1.4227, +0.0017 (+0.12%) from 1.4210, range 1.4207-1.4235. Higher oil is offsetting most of the dollar's gain. The 52-week high is 1.4297
6J and 6A. USD/JPY 158.32, +0.21 (+0.13%) from 158.11, range 157.85-158.51. AUD/USD 0.6957, -0.0027 (-0.39%) from 0.6984, range 0.6955-0.6986, the risk-off move in FX
October hike odds have eased. Polymarket has a 25bp October hike at 16.5% and a hold at 82.5% (about 06:45 ET), down from 19.5% on Tuesday morning. December is still priced for a hike: 74.5% for 25bp and 3% for 50bp. The desk could not verify a current CME FedWatch reading this morning; it was 21.6% for October on Tuesday morning (Benzinga). The FOMC meets 27-28 October
What Fed officials said on Tuesday. SF Fed President Daly told Axios further hikes depend on whether the energy and trade shocks to inflation continue, and warned that AI-driven chip demand could add to inflation. KC Fed President Schmid said the Fed has "some work to do" on the short rate (Mace News)

Energy & Metals

CL: November settled $89.44, +$0.01 on Tuesday, reconciling with Monday's $89.43. Barchart confirms the settle. That flat close hides a reversal: WTI hit $86.86, a one-month low, before recovering. It is $89.84, +$0.40 (+0.45%) now, range $89.33-$90.61
Brent: December settled $100.58, +$0.26, reconciling with $100.32. MarketWatch and TradingView agree. It is $101.77, +$1.19 (+1.18%) now, range $100.76-$102.06. The Brent-WTI spread is about $11.90, wider than about $10.75 on Tuesday morning
The mechanism: supply is still recovering, but the shipping routes are under attack again. Tuesday's decline came from more supply: Kuwait is pumping about 75% of its pre-war level, Saudi Arabia says East-West pipeline flows reached 80% of capacity, and Yemeni government forces retook Mokha near Bab el-Mandeb. The recovery came from the opposite side, as reports of more Iranian attacks on tankers prompted short covering (Barchart). The Houthi strikes overnight add to that risk, because Saudi Arabia has been shipping most of its oil through the Red Sea since Hormuz closed. Tanker rates are rising (Dow Jones)
Inventories. API showed crude down 2.09M barrels for the week to 2 October, with Cushing up 866,000 and gasoline down 1.37M (Trading Economics). EIA is at 10:30, with a +1.9M consensus. A second draw would contradict the consensus
GC: December settled $4,187.10, +$30.30 (+0.73%) on Tuesday, reconciling with Monday's $4,156.80. TradingView's daily bar matches. It is $4,142.10, -$45.00 (-1.07%) now, range $4,135.00-$4,197.80. Silver is -1.9% at $60.40. Gold rose on Tuesday as yields and the dollar fell, and it is falling now as both rise. That is the same real-rate pattern as Monday and Tuesday. Gold is not trading as a haven against the Middle East news
Rates. 10-year 5.333%, +4.4bp from Tuesday's 5.289%, range 5.285%-5.336%. The 52-week intraday high is 5.353%. 2-year 4.812%, +0.6bp from 4.806%. 30-year 5.712%, a 52-week high. 2s10s is about 52bp, steeper than 46bp on Tuesday morning: the long end is doing all of the selling. Tuesday's 3-year auction came in at 4.932%, 46bp above September's 4.474%, with a bid-to-cover of 2.62 (TreasuryDirect)

Where We Left Off

Tuesday's RTH close, per AP: S&P 500 7,818.93 (+44.98, +0.6%), its first record since August · Dow 51,521.28 (+253.38, +0.5%) · Nasdaq Composite 27,599.79 (+122.48, +0.4%), a second straight record · Russell 2000 2,830.30 (-16.84, -0.6%). All four reconcile with Monday's published closes, and MarketWatch matches the S&P, Dow and Russell to the cent. The Nasdaq-100 rose 0.48% to 31,224.69. Utilities led all 11 sectors, +3.0%. Dow Transports fell 0.45%. The VIX closed at 15.34
Large caps rose and small caps fell. That is the result you would expect with long-dated yields above 5.25%: the Russell has fallen in a week when the S&P set a record. The rally was led by AI and power names after Google's nuclear deal with Constellation Energy
What carries over: Tuesday's rally depended on lower oil and lower yields. Both have reversed overnight. ES is about 39 points below Tuesday's record high, and the 10-year is back above its 2002-high close

Yesterday's Data

On The Calendar Today

Time ET · Event · Consensus · Prior · Hits

07:00 · MBA mortgage applications, w/e 2 Oct · n/a · -6.0% · USD

07:00 · MBA 30-year mortgage rate · n/a · 7.30% · USD

09:00 · Manheim used-car prices, Sep · n/a · -0.9% m/m · USD

10:00 · Fed's Waller, FRED Con (data topic) · n/a · n/a · USD

10:30 · EIA crude inventories · +1.9M bbl · +0.92M bbl · CL

11:00 · NY Fed 1-yr inflation expectations, Sep · 3.7% · 3.6% · USD · GC

11:30 · 17-week bill auction · n/a · 4.115% · USD

12:00 · Canada 2-year bond auction · n/a · 3.47% · 6C

13:00 · 10-year note auction · n/a · 4.834% · USD · ES/NQ · GC

13:00 · White House: Trump announcement, topic not given · n/a · n/a · ES · USD

13:30 · Fed's Jefferson, economy and policy · n/a · n/a · USD · ES/NQ · GC

13:30 · ECB's Vujcic · n/a · n/a · 6E

14:00 · FOMC minutes, 15-16 Sep meeting · n/a · n/a · USD · ES/NQ · GC

15:00 · Fed's Bowman, bank capital rules · n/a · n/a · USD

15:00 · Consumer credit, Aug · $15.0B · $18.06B · USD

The calendar was built from TradingView's economic calendar and cross-checked against Trading Economics. Both list the same US events. The 08:30 slot is empty in both: there is no US release at 08:30 today. Wednesday's fixed weekly releases are both included: MBA at 07:00 and EIA at 10:30. The Fed speakers are from the Federal Reserve's own October calendar; the ECB speaker is from TradingView. The NY Fed consensus is from Trading Economics. The White House schedule is from Mace News and does not say what the 13:00 announcement is about.

The fulcrum is the afternoon, not the morning. With nothing at 08:30, the open will trade on oil, yields and the overnight lows. At 13:00, the 10-year auction tests demand at the maturity that has been selling off most. Tuesday's 3-year came in 46bp above September, and the 10-year is now about 50bp above September's 4.834%. At 13:30, Jefferson is the only Fed speaker today with monetary policy in the title. At 14:00, the minutes will show how many officials favoured further hikes after September's increase, the first in about three years. A hawkish read would support December hike pricing near 75%; a cautious one would push against it. The minutes are three weeks old, and the oil and yield moves since then are not in them.

Index Movers

Ranked by index contribution. The Dow is price-weighted, so $1 in any constituent is worth about 5.9 Dow points (treat these as approximate). Closes and pre-market quotes are from MarketWatch, about 06:45 ET.

CAT $863.44, +$15.30 (+1.80%), worth about +91 Dow points, about a third of the Dow's gain. HD +$5.54 (about +33), CSCO +$5.12 (+4.54%) (about +30) and AMZN +$4.89 (+1.95%) (about +29) added most of the rest. CRM -$4.80 (-2.09%) took about -29 and BA -$2.90 (-1.50%) about -17. The desk could not source a catalyst for CAT. It is -1.41% pre-market, the largest pre-market move among Dow names
AVGO $375.81, +$13.30 (+3.67%) and AMZN +1.95% were the largest mega-cap gains for ES and NQ. MSFT +0.78%. NVDA +0.14% was flat, and META -0.41%. Pre-market, AVGO is -1.06% and MSFT -0.53%
CEG $300.40, +$32.78 (+12.25%), an S&P 500 name, after a 20-year deal with Google for 890 MW of new nuclear capacity from uprates at 11 reactors, backed by $4.3B of Constellation investment, plus a 15-year supply agreement for another 2,700 MW in PJM (Seeking Alpha). VST +10.77% followed. Together they drove utilities' +3.0%. CEG is -2.14% pre-market
STX $805.63, -$81.46 (-9.18%) and WDC -6.93%, both S&P 500 names. Seagate is competing with Toshiba to buy TDK's hard-drive heads unit, and investors are concerned about the cost (StockStory). Toshiba's plan to double its drive capacity is the other weight
STZ -4.85% pre-market after Constellation Brands' Q2 report last night. It is a small S&P 500 weight and a minor ES factor

What Would Change The Read

Scoring Tuesday's calls. We asked whether ES would clear 7,848.50. It did: 7,897.50, a record, and the S&P cash index closed at a record. We asked whether the 10-year would stay below Monday's 5.312% close. It did on Tuesday, closing at 5.289%, and broke above overnight. We asked whether French yields would keep falling. They did on Tuesday, to 4.755%, and reversed by 14bp overnight. We asked whether WTI would hold near $87. It broke briefly, to $86.86, then settled at $89.44
Whether the 10-year closes above 5.312%. That would be a new high close since 2002. The intraday 52-week high is 5.353%. The 13:00 auction is the main test
Whether ES holds Tuesday's range. The overnight low of 7,856.75 is inside Tuesday's 7,829.00-7,897.50 range. The S&P cash index closed at 7,818.93
Whether Brent holds above $100 into EIA. On Tuesday WTI traded a $3.19 range on supply news in the morning and attack news in the afternoon. A crude draw at 10:30 would add to the oil move
Whether EUR/USD tests 1.1162. That is Monday's 17-month low. French yields at 4.9% are the main driver; the French 52-week high is 5.028%

The Bottom Line

Tuesday's rally depended on oil falling and yields easing, and both have reversed overnight. The Houthi strikes on Saudi airports and attacks on tankers have put Brent back over $100, and the 10-year back above the highest close since 2002. The dollar is stronger, the euro is near its low, and gold has fallen with real yields. ES and NQ are only modestly below their records, but they are at their overnight lows. With no data at 08:30, the main tests are the 10-year auction at 13:00 and the minutes at 14:00, both on whether the bond market can absorb another hike.

_For informational purposes only. Not investment advice._