Brent near $97.5 as traders price ECB and Fed hikes this month
Oil and interest-rate expectations dominated Monday’s thin, holiday-skewed session: Brent pushed toward seven-week highs near $97–$97.5 a barrel while traders marked up odds of Federal Reserve and European Central Bank hikes this month.
The oil impulse
Reuters reported that Tehran said it would announce a restricted zone outside the Strait of Hormuz in coming days after U.S. forces hit three Iranian tankers and Iran’s Islamic Revolutionary Guard Corps fired ballistic missiles at two U.S. Navy ships. That escalation helped lift Brent after an almost 8% surge last week.
Central banks on the clock
“Central bank patience through the energy shock has been supportive of asset prices and the credit cycle,” JPMorgan’s Bruce Kasman told Reuters. “However, central banks are now on the move.”
For the Fed, August payrolls of 162,000 jobs left markets pricing a 58% chance of a September 16 hike and about 70% for October. This week’s U.S. consumer-price print is the near-term swing factor.
In Frankfurt, investors treat a Thursday ECB increase to 2.5% as nearly certain, with futures also pointing to 2.75% by December. The euro traded around $1.16. Bank of Japan hike odds for 18 September were also elevated, helping push the yen to a seven-month high against the dollar in Monday trade.
Equities were mixed: Asia’s tech-heavy benchmarks rallied on the jobs-growth read, while European stocks struggled and U.S. futures drifted on the Labor Day holiday. The message from the tape was less about growth collapse than about how much of the oil spike policymakers are willing to look through.