TMGM Daily Market Breakfast: 21 September 2026

Morning Snapshot

• Federal Reserve officials said US inflation remains too high, with Chicago Fed President Austan Goolsbee citing strong demand, tariffs, energy and supply shocks and Minneapolis Fed President Neel Kashkari saying price pressures are still elevated across all parts of the economy.
• The Bank of Japan raised rates by 25 basis points to 1.25%, after which USD/JPY briefly climbed above 158 before retreating toward 157 as reports of a BoJ rate check signalled possible intervention if yen weakness deepens.
• WTI crude fell for a fourth straight day to around $93.50-$94.00, nearly 8% below last week’s highs, as stronger Saudi crude exports and record recent Strait of Hormuz shipments eased immediate supply fears despite fresh attacks on Saudi Arabia.
• US and Chinese officials opened high-level talks in New York on trade, artificial intelligence and critical minerals ahead of a planned Trump-Xi summit later this week, while Treasury Secretary Scott Bessent said engagement with China had been very successful.
• Iran’s Islamic Revolutionary Guard Corps warned that any new strike would prompt Tehran to change the geography and armaments of the conflict, adding to already elevated Middle East tensions.
• Ukraine launched a large overnight drone and missile attack on Moscow and the surrounding region, including an oil refinery, extending the war’s direct impact on Russian energy infrastructure.
• The Australian Dollar outperformed several peers as markets priced in another RBA rate increase next week, while AUD/JPY traded around 112.10 and AUD/USD hovered near 0.7120.
• The US Dollar Index held around 100.30 after two days of losses, while USD/CHF traded near 0.8230 and USD/IDR extended its advance to around 17,850 amid a firmer US dollar tone.
• Gold edged lower toward $4,365 after failing near $4,400 on Friday, with hawkish Fed signals and geopolitical tensions supporting the US dollar.

Market Developments

Foreign Exchange

The US Dollar Index traded around 100.30 after two days of losses. USD/JPY briefly rose above 158.00 after the Bank of Japan decision before retreating toward 157.00, USD/CHF traded around 0.8230, USD/IDR extended an eight-session advance to around 17,850, AUD/USD hovered near 0.7120 and AUD/JPY traded around 112.10.

Energy & Metals

WTI crude traded around $93.50-$94.00, extending a four-day decline and leaving prices nearly 8% below last week’s highs. Brent had eased to around $105 per barrel on Friday, while gold edged lower toward $4,365 after failing near $4,400.

Macroeconomics & Central Banks

Fed Officials Say Inflation Pressures Remain Broad and Persistent

Federal Reserve officials reinforced a firm inflation message at the start of the week. Chicago Fed President Austan Goolsbee said strong demand, tariffs, energy and other supply shocks are all fuelling US inflationary pressures, and said there is “no ambiguity” about how the Fed would respond if demand is overheating.

Goolsbee said supply shocks are proving persistent and must be accounted for in monetary policy, adding that without evidence that supply-driven inflation is fading it is hard to see a credible path back to the Fed’s 2% target. Minneapolis Fed President Neel Kashkari separately said inflation remains too high in “all aspects” of the US economy, not only in oil-related prices, underscoring concern that price pressures remain broad-based.

BoJ Rate Hike to 1.25% Triggers Yen Volatility and Intervention Watch

The Bank of Japan’s latest policy move remained a central market focus after it raised rates by 25 basis points to 1.25%. Despite the increase, markets interpreted the meeting as relatively dovish, and USD/JPY climbed from the 156 area to above 158 immediately after the decision.

The move then partially reversed after reports that the BoJ conducted a rate check during the New York session, a step widely read as a signal that officials are prepared to intervene again if yen weakness accelerates. USD/JPY subsequently retreated toward 157.00. Reports said the rate check helped cap expectations for how far the yen would be allowed to weaken in the near term as the pair moved closer to 160.00.

Australian Dollar Firms as Markets Price Another RBA Increase

The Australian Dollar outperformed several peers as expectations built for another Reserve Bank of Australia rate increase next week. AUD/JPY traded around 112.10, up 0.32% on the day, while AUD/USD hovered near 0.7120 in early trading.

The move reflected diverging policy expectations between Australia and Japan, with investors also awaiting Australian employment data and further comments from RBA Governor Michele Bullock. The firmer Australian currency contrasted with continued uncertainty over the pace of further tightening in Japan.

Geopolitics, Trade & Policy

US and China Open New York Talks Ahead of Trump-Xi Summit

US and Chinese officials began high-level talks in New York aimed at clearing the way for possible agreements on trade, artificial intelligence and critical minerals before a planned meeting between President Donald Trump and President Xi Jinping later this week.

Treasury Secretary Scott Bessent said he had a “very successful” engagement with China on trade and AI. The talks put economic and technology issues back at the centre of bilateral diplomacy at a time when markets are closely watching for any sign of progress between the world’s two largest economies.

Iran Warns of Broader Response as Gulf States Call for Coordinated Action

Iran’s Islamic Revolutionary Guard Corps warned that any new military strike would prompt Tehran to alter both the geography of the conflict and the weapons used, raising the risk of a wider regional confrontation.

Separately, Qatar’s Prime Minister Sheikh Mohammed bin Abdulrahman Al-Thani said Gulf states must work together to restore stability in the Middle East and help find a settlement between the United States and Iran. The comments highlighted parallel efforts to deter escalation while regional tensions remain elevated.

Ukraine Strikes Moscow Region Oil Infrastructure in Large Overnight Attack

Ukraine carried out a large-scale overnight drone and missile attack targeting Moscow and the surrounding region, including a Moscow oil refinery. The strike extended the conflict’s direct reach into Russian energy infrastructure and added to geopolitical risk around oil supply chains.

The attack came as energy markets were already balancing Middle East supply concerns against signs of stronger crude flows from Saudi Arabia and through the Strait of Hormuz.

Energy & Commodities

WTI Extends Four-Day Decline as Saudi Supply Reassures Market

WTI crude fell for a fourth consecutive day on Monday, trading around $93.50 to just below $94.00 and leaving the US benchmark nearly 8% below last week’s highs. The decline followed reports that Saudi Arabian crude exports increased significantly in September, easing concern over supply disruption.

CNBC, citing a JP Morgan report, said Saudi crude flows remained “surprisingly strong” despite disruption to the East-West pipeline. Admiral Brad Cooper, head of US Central Command, also said oil shipments through the Strait of Hormuz reached their highest levels in the last six months over the previous two weeks after US naval protection and mine-clearing operations in the waterway.

Even so, the market retained a geopolitical risk premium. Houthi forces claimed missile and drone attacks on Riyadh and an Aramco facility at Yanbu, while Saudi authorities said the attacks on Yanbu and several other locations were thwarted and that no fresh damage to oil infrastructure had been reported. Existing pipeline damage and disrupted Yanbu loadings continued to keep supply risks in focus.

Gold Slips Toward $4,365 as Firmer Dollar Offsets Haven Demand

Gold edged lower toward $4,365 at the start of the week after failing near $4,400 on Friday, stalling a short recovery from a six-week low touched last week.

The metal came under pressure as hawkish Federal Reserve signals supported the US dollar, even as geopolitical tensions in the Middle East remained elevated. The competing forces of a firmer dollar and persistent geopolitical risk kept bullion under close watch.

Currencies

Dollar Holds Firm Across Major and Emerging-Market Crosses

The US dollar remained broadly supported at the start of the week, with the Dollar Index holding around 100.30 after two days of losses. USD/CHF traded around 0.8230, while USD/IDR extended its winning streak to an eighth straight session at around 17,850.

The moves reflected continued support for the dollar from a firm Federal Reserve policy tone. In Indonesia’s case, the stronger dollar left the rupiah under pressure, while in Switzerland the franc gave back part of its recent recovery as attention also turned to the Swiss National Bank policy outlook.

Upcoming Key Events

• Trump-Xi summit — Thursday: A planned meeting between US President Donald Trump and Chinese President Xi Jinping follows current high-level talks on trade, artificial intelligence and critical minerals.
• Australian employment data — null: Investors are awaiting Australian employment data alongside further comments from RBA Governor Michele Bullock.