Daily Financial Breakfast 16 October 2026: IEA Says Members Agree 100 Million-Barrel Release While Trump Rules Out Nuclear Use in Iran

Market News Today: Key Takeaways

• IEA members agreed to release an outstanding 100 million barrels of oil as Brent traded above $100 a barrel and WTI held near $96.
• US President Donald Trump said he would not use a nuclear bomb in Iran and did not envisage deploying US ground troops there, Reuters reported.
• European natural gas prices reached their highest level since December 2022 as Persian Gulf LNG flows remained about 80% below a year earlier.
• Bank of Japan board member Junko Koeda emphasised upside price risks and judged the neutral interest rate to be considerably above 1%, MUFG reported.
• US producer inflation accelerated to 6.3% in September from 5.6% in August, exceeding expectations of 5.3%.
• China's September exports rose 36.3% from a year earlier and its monthly trade surplus reached $133.5 billion, Commerzbank reported.
• Australia lost 39,300 jobs and unemployment rose to 4.72%, while the Australian dollar fell against the US dollar and most G7 currencies.
• US Treasury Undersecretary Erin Browne said Japan no longer faced deflation and that its currency level and monetary policy needed to adjust.
• Chicago Fed President Austan Goolsbee called September a disappointing month for inflation and warned about inflation pressure from AI demand.
• Cleveland Fed President Beth Hammack urged further monetary tightening and said lower-income Americans were struggling with inflation.

Market Developments

Foreign Exchange

GBP/USD rose 0.56% to 1.3267 on Thursday after touching 1.3184, reaching its highest level since October 6. On Friday, EUR/USD traded around 1.1230 during Asian hours, while GBP/JPY extended gains for a second day to around 209.80. USD/JPY rose to around 158.10 early in Asia before falling to near 157.85 in early European trading.

Energy & Geopolitics

IEA Says Members Agree to Release Outstanding 100 Million Barrels

International Energy Agency members agreed to complete the release of an outstanding 100 million barrels of oil from the intervention launched in March to ease fuel prices, Bloomberg reported, citing the agency. ING analysts Warren Patterson and Ewa Manthey said the release includes 20 million barrels of diesel intended to reach the market as soon as possible.

Oil prices remained elevated on Friday. WTI traded around $96.10 a barrel during Asian hours as its six-day winning streak halted, before holding near $96 in European trading with weekly gains intact. Brent remained above $100 a barrel. ING attributed the continuing risk premium to Middle East uncertainty and concerns about the sustainability of flows through the Strait of Hormuz.

Separately, US commercial crude inventories fell by 8.56 million barrels over the latest week, the largest weekly decline since February, according to Energy Information Administration figures cited by ING. The analysts said hurricane activity in the Gulf contributed to the draw.

Trump Rules Out Nuclear Bomb Use in Iran

US President Donald Trump said he would not use a nuclear bomb in Iran and did not see the United States deploying ground troops in the country, Reuters reported on Friday. He also said he had spoken with Russia and China about nuclear disarmament.

European Gas Reaches Highest Level Since December 2022

European natural gas prices traded at their highest level since December 2022 as Persian Gulf LNG flows remained about 80% below year-earlier levels, ING's Warren Patterson said. Unlike oil shipments, LNG flows from the region had not shown a similar recovery as the Northern Hemisphere heating season approached.

European gas storage was just under 75% full, compared with a five-year average of 89%. Germany instructed state-owned SEFE to buy and store an additional 8 TWh of natural gas by December 15.

Macroeconomics & Central Banks

BoJ's Koeda Emphasises Upside Price Risks

Bank of Japan board member Junko Koeda placed greater emphasis on upside inflation risks and still-accommodative financial conditions in her latest remarks, according to MUFG's Michael Wan. She judged the neutral interest rate to be considerably above 1% and warned more explicitly against excessive caution than in her previous speech.

MUFG said the remarks did not signal the timing of the next policy move. Overnight swaps implied around a 4% probability of a rate move in October and an 82% probability by December.

US Producer Inflation Accelerates to 6.3% in September

US producer prices rose 6.3% from a year earlier in September, up from 5.6% in August and above the 5.3% market forecast, the Bureau of Labor Statistics reported. Prices increased 1.3% on the month, compared with expectations of 0.5%.

Core producer prices, excluding food and energy, rose 0.7% from the previous month and 5% from a year earlier. Interest-rate pricing put the probability of an October Federal Reserve increase at 26% and a December increase at 92%.

Separate labour-market figures showed initial unemployment claims of 199,000 for the week ended October 10, compared with 198,000 previously and a forecast of 200,000. Continuing claims declined by 4,000 to 1.710 million.

China's Exports Rise 36.3% as Trade Surplus Reaches $133.5 Billion

China's exports increased 36.3% from a year earlier in dollar terms in September, accelerating from 25.0% in August and exceeding the Bloomberg consensus of 25.7%, Commerzbank's Henry Hao reported. Imports rose 31.0%, compared with 28.2% previously and expectations of 25.0%.

The monthly trade surplus widened to $133.5 billion, its largest in 20 months, taking the surplus for the first nine months of 2026 to $938 billion. Commerzbank also reported record bilateral surpluses with the United States and European Union.

Producer prices rose 5.0% from a year earlier, the fastest pace since 2022, compared with 3.8% previously and a consensus forecast of 4.4%. Commerzbank attributed the acceleration mainly to elevated oil prices and higher costs for AI-related goods.

Aggregate social financing expanded by CNY3.55 trillion, the largest monthly increase since June, supported by the strongest government bond issuance in more than a year. New yuan loans totalled CNY1.3 trillion, while household borrowing remained subdued.

The figures coincided with renewed EU-China trade friction. Germany was pushing to extend safeguard quotas to sectors including chemicals and mechanical engineering after an EU-China cap on hybrid vehicles agreed the previous weekend.

Australia Loses 39,300 Jobs as Unemployment Rises to 4.72%

Australia's employment fell by 39,300 and the unemployment rate rose to 4.72%. The Australian dollar declined against the US dollar and most G7 currencies following the jobs figures.

US Treasury's Browne Says Japan Must Adjust Policy After Deflation

US Treasury Undersecretary for International Affairs Erin Browne said on Friday that Japan no longer faced a deflationary environment. She said the level of the yen and Japan's monetary policy needed to change to reflect that shift.

Fed's Goolsbee Warns About Inflation Pressure From AI Demand

Chicago Federal Reserve President Austan Goolsbee described September as “a disappointing month for inflation” on Thursday. He also warned that demand linked to artificial intelligence could keep inflation elevated.

Fed's Hammack Urges More Tightening as Inflation Strains Households

Cleveland Federal Reserve President Beth Hammack urged further monetary tightening and said she was hearing that lower-income Americans were struggling with inflation. Her comments followed remarks three days earlier about early warning signs of a possible problem with inflation expectations.