Global Market Daily: Two Fronts, One Ceasefire Announcement

Monday, October 12, 2026 | Daily briefing on Gulf escalation, energy ceasefire claims, CPI setup, and crypto ETF outflows.

Executive Summary

Our View: We are starting the week with a measured appetite for risk following a easing in oil prices, but the foundation of this relief remains fragile: neither party has yet confirmed the Russia-Ukraine energy ceasefire announced by Trump, and the Houthi attack on Riyadh airport has raised the risk of opening a second front in the Gulf. Trading volume is thin today due to holidays in Japan and a partial holiday in the US; the main movement will come with Wednesday’s CPI data and bank earnings starting tomorrow. Headline inflation is expected to show a sharp 0.6% increase due to energy, while core is expected to remain at 0.2%, leaving market reactions tied to the core figure. We would like to see the dollar remain near its 18-month high, gold supported as oil cools down, and bitcoin maintaining its average support near 80,200 before testing the 85,000 resistance.

• Trump declared an “energy ceasefire” between Russia and Ukraine. On Sunday, Zelensky met the agreement—described as “effective immediately”—by stating he had not yet seen the details, while Russia made no comment. Russia is expected to supply 300,000 tons of diesel to the US and global markets, adding another 500,000 tons in November.
• Oil declined: Brent at $103.44, WTI at $90.37. ICE gasoil futures fell by 3%. Goldman Sachs raised its December Brent forecast from $85 to $90 and calculates a risk premium of over roughly $20.
• Houthis struck Riyadh airport, killing 13 people. Saudi Arabia requested “urgent defense assistance” from the US; Trump said they are considering joining Saudi strikes against the Houthis. Two more tankers were attacked in the Strait of Hormuz over the weekend.
• This is CPI week. On Wednesday, headline inflation is expected to rise 0.6% due to energy, bringing the annual rate to 3.7%, while core is expected to remain at 0.2% and 2.5% annually. The probability of an October rate hike stands at 17–18%, and December at 85–86%.
• Earnings season begins tomorrow with the banks. Third-quarter earnings growth expectation for the S&P 500 is 29.6–30%; this will mark the fourth consecutive quarter of over 25% growth. However, according to AMP, all gains in the index since mid-September have come entirely from tech.
• Investment-grade credit spreads are at their highest level since the war began. AMP: widening spreads indicate investors are questioning whether AI revenues can keep pace with rising borrowing costs.
• Outflows from ETFs continue. Spot bitcoin funds saw a net $386.3 million leave during the first seven trading days of October; ether funds registered outflows for nine consecutive sessions since September 29, losing a total of $697.4 million.
• Today: IMF and World Bank annual meetings begin in Bangkok; Japan is on holiday, and the US is on a partial holiday. Tomorrow: IMF World Economic Outlook report and major bank earnings; Friday: Speech by Fed Chair Warsh.

Story of the Day

Two Fronts, One Ceasefire Announcement

Over the weekend, two developments unfolded in the Middle East that pushed the war into a new dimension. On Saturday, the Iran-backed Houthis claimed responsibility for an attack on Riyadh’s international airport; 13 people were killed and over 300 injured. According to Saudi officials, another attack on the same airport on Sunday caused additional casualties. The Kingdom requested “urgent defense assistance” from Washington, and Trump told reporters outside the White House on Saturday that they were considering joining Saudi strikes against the Houthis: “We might. We’ll see. We just heard about the latest attack. So we’ll make a decision. We move very fast.” This would pull the US into a second front in the Iranian war that began in February, further complicating the prospect of a lasting solution. That same weekend, Russian state media reported that Putin had passed a message from Tehran to Trump regarding ending the war; Commonwealth Bank of Australia analysts wrote that Iran confirmed receiving a US peace proposal through intermediaries, though they do not expect a breakthrough this week. The bank’s oil outlook aligns with this framework: they expect the Houthis to continue attacking Saudi energy assets, supporting both oil prices and the dollar.

The second development came from an unexpected angle. On Sunday, Trump announced an energy ceasefire between Russia and Ukraine “effective immediately”: “There is an ENERGY CEASEFIRE in the war between Russia and Ukraine effective immediately. Both sides have agreed. Do not break it!” However, confirmation is weak: Zelensky said he is still awaiting the details of the agreement, that Ukraine supports a ceasefire, and that it is important for Russia to support it too; Russia made no comment. On top of this came a diesel agreement. Under an understanding reached during a phone call with Putin on Friday, Trump announced that Russia would immediately supply over 300,000 tons—or roughly 2.25 million barrels—of diesel to the US and global markets, with another 500,000 tons added in November and 1 million tons shortly thereafter. For comparison: global daily diesel consumption is close to 29 million barrels according to the International Energy Agency, meaning these volumes alone won’t move the entire market, but the psychological impact was strong. The proposal also met opposition from both Republican and Democratic senators on the grounds that it could potentially be illegal.

Market reaction was fast but measured: Brent fell 1.2–1.65% to $103.01–$103.44, WTI dropped 1.6–1.9% to $90.09–$90.37; ICE gasoil futures dropped 3% to $1,436 per barrel. Tim Waterer, chief analyst at KCM Trade, draws the line: the announcements relieved some immediate supply pressure, but questions remain regarding the validity and longevity of such a ceasefire, and without clearer evidence that it will actually hold, the scale of any pullback will remain limited. Goldman Sachs, on the other hand, raised its December Brent forecast from $85 to $90; analysts led by Daan Struyven maintain their baseline scenario that eventual alignment of Middle Eastern supply will bring crude prices down, but note that a potential new escalation still carries significant upside risk, calculating the current risk premium at just above $20. The bank forecasts WTI to average $81 for December 2026 and $73 for 2027, attributing WTI’s unusually wide discount to Brent to high US-Europe shipping costs. In the Gulf of Mexico, Shell, Chevron, and BP are redeploying personnel and attempting to restore production following Hurricane Isaias making landfall on Saturday.

CPI Week: Headline Hot, Core Cool

This week’s main macro event is the US Consumer Price Index data to be released on Wednesday, making it one of the last major data points ahead of the Fed’s late-October meeting. Expectations are split: rising energy costs are anticipated to drive headline inflation up by a steep 0.6%, bringing the annual rate to 3.7%, whereas core inflation is expected to remain cooler at 0.2% monthly and 2.5% annually. Bruce Kasman, head of global economics at JPMorgan, summarizes the picture: oil prices remain higher than assumed because shipping costs have surged and product prices are even higher; inflation signals point to a harsh headline inflation jump that will squeeze purchasing power and a sticky core inflation that will keep central banks focused on near-term rate hikes. Producer prices and retail sales will be released on Thursday.

Pricing currently remains calm: the market assigns only a 17–18% probability to a Fed rate hike this month, while the probability for December is 85–86%. A month ago, the probability of holding rates steady in October was 51%; now it stands at 81%. Investors are also betting on rate hikes in the European Union, Japan, and the UK before the end of the year. Barclays analysts believe the dollar rally could pause in the near term with some pullback; their reasoning is interesting: sharp moves in bond markets have tightened global financial conditions, which—especially if CPI data comes in weak—could prompt Fed officials to adopt a more reassuring tone heading into the October meeting. Data released last week supports this direction: US consumer sentiment deteriorated further in early October due to elevated living costs driven by the Middle East conflict, dampening household economic outlooks. Additionally, the IMF and World Bank annual meetings begin today in Bangkok; the IMF will publish its World Economic Outlook and Global Financial Stability reports tomorrow, followed by a session on Friday featuring Fed Chair Kevin Warsh.

Earnings Season: Earnings Strong, Question is Borrowing Cost

Third-quarter earnings season starts tomorrow with major banks; Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo report this week. Expectations are strong: S&P 500 earnings are expected to increase over 30% in Q3 according to LSEG IBES, and 29.6% according to FactSet’s John Butters—marking the fourth consecutive quarter of 25%+ earnings growth for the index. On Thursday, TSMC, the world’s largest manufacturer of advanced AI chips, is expected to report its sixth consecutive record quarter. However, there are two caveats. First is concentration: most of the growth stems from the technology sector, and according to AMP economist My Bui, every gain in the S&P 500 since mid-September has originated from tech.

Second, and more importantly, financing. Bui notes in the same memo that investors are demanding higher yields to finance massive AI-related borrowing, providing a concrete indicator: the US investment-grade credit risk premium index, which tracks default insurance costs, rose sharply to its highest level since the US-Israel war with Iran began. Her commentary is direct: overall widening spreads show that investors are questioning whether AI revenues can keep pace with rising borrowing costs; corporate bond issuance to fund AI capital expenditure, combined with widening high-yield spreads, will drive up refinancing costs as current debt waves mature in the coming years. This represents the first tangible warning signal on the credit market side regarding the AI financing narrative we have been following for weeks. Brian Leonard, manager of the Keeley Gabelli Small Cap Dividend Fund, summarizes what investors are looking for this season: Can this company withstand current conditions, pass on costs, continue to grow margins, and will the near future look better than the recent past?

Market Wrap

Equities

Wall Street closed last week in positive territory: S&P 500 up 0.59% to 7,812, Dow up 0.83% to 51,655, Nasdaq 100 up 0.51% to 30,883, Russell 2000 up 0.46% to 2,807. VIX dropped 3.7% to 14.84. The Dow and S&P closed higher for two out of the last three weeks, while the Nasdaq Composite recorded its fourth straight weekly gain; the tech rally helped investors look past high oil prices and yields. At Friday’s close, Amazon rose 3.29% to $262, Microsoft gained 2.38% to $535, Tesla added 2.05% to $383; conversely, AMD fell 2.03% to $608, Apple dipped 1.11% to $337, and TSM slipped 1.02% to $453. Divergence within tech persists: cloud and platform names are being bought while chip supply chain names are sold off. US futures are slightly higher this morning; S&P up 0.12–0.3%, Nasdaq 100 up 0.24–0.4%. The US is observing a partial holiday today.

Asia was mixed on thin volume on Monday: Japanese markets were closed for holiday. South Korea’s KOSPI was the region’s weakest performer, falling 2.2–2.98% to 6.428; Taiwan dropped 0.21–0.5%, with Foxconn sliding 1.81% following news of a patent infringement investigation opened by the US International Trade Commission, despite reporting a 47% increase in Q3 revenue driven by AI demand. The MSCI Asia-Pacific ex-Japan index dipped 0.3%. China moved in the opposite direction: CSI 300 gained 0.1–0.38%, Hang Seng added 0.17–0.98%, with materials and healthcare sectors leading gains in Hong Kong. Australia gained 0.61–0.72% to 8,780, while India’s Sensex slipped 0.12%. European futures signal a strong open: Euro Stoxx 50 up 0.5%, DAX up 0.6%, FTSE up 0.4%; on Friday, the DAX had gained 1.13% to 25,087, FTSE added 1.06% to 10,552, and CAC 40 rose 0.95% to 7,803. Brazil’s Bovespa rose 1.38% to 209,067 into record territory, boasting a 12.9% monthly gain. BIST 100 rose 0.43% to 12,266, recovering for a third day; up 2.6% weekly, though monthly losses remain around 12%.

Foreign Exchange

The Dollar Index is near its 18-month high seen last week at 102.14–102.25, down 0.04% daily. Trading remains in a narrow band with thin liquidity across the region due to Japan’s holiday. Euro trades at 1.1201–1.1212, seeking stability after five consecutive weeks of declines; France’s fiscal health and political uncertainty ahead of the 2027 presidential election remain the primary sources of pressure. OCBC FX strategists remain cautious: it is too early to tell if high borrowing costs will force greater fiscal discipline on the French government; they expect EUR/USD to consolidate as the volume of French fiscal and political headlines is unlikely to sustain its intensity, but add that any rally in the euro will be capped by Europe’s structural challenges. Yen is at 158.16–158.30; intervention threats continue to deter speculators for now, preventing the dollar from advancing against the yen. Sterling is flat at 1.3245–1.3247, Australian dollar at 0.6984, New Zealand dollar at 0.5609–0.5614. The standout move of the day occurred in the South Korean won: the currency rallied to a two-year high against the dollar, reaching 1,332.88 and up 7.4% year-to-date; according to Bloomberg, heavy dollar selling by local corporates and falling oil prices were driving factors. Yuan is flat at 6.6913–6.6927. USD/TRY trades near its new high at 49.33. USD/MXN rose 1.18% to 18.40, making the peso the day’s weakest emerging market currency.

Commodities

Oil declined due to the dual narrative outlined above: Brent fell 1.22% to $103.44, WTI fell 1.61% to $90.37. International Energy Agency Director Fatih Birol stated on Sunday that all members should assess whether additional diesel releases are necessary and accelerate remaining committed release volumes, prioritizing diesel. Precious metals benefited from the easing in oil and a weaker dollar: gold rose 0.13–0.4% to $4,206–$4,222, reaching its highest level since October 2; silver gained 0.5–1.03% to $61.12–$61.30, platinum added 1–1.66% to $1,705–$1,707, and palladium increased 1.2–1.49% to $1,157–$1,162. Waterer from KCM Trade explains the mechanism: softer oil prices and a calmer dollar following Trump’s reported Russia-Ukraine energy ceasefire offered gold an upward window of opportunity to start the week; as oil cools, immediate inflation and rate concerns leave the market, benefiting non-yielding gold. Copper rose 1.56% to $6.75, nearing record territory. Natural gas dropped 1.71% to $3.17. In grains, wheat remains soft at 667.75, cocoa flat at $5,671.

Crypto

Bitcoin rose 1.1–1.35% on Monday to $83,850–$84,120, continuing its recovery from last week’s sharp sell-off; ether outperformed bitcoin, rising 1.5–2.3% to $2,542–$2,566. Total market capitalization rose 0.2% to $2.9 trillion; bitcoin dominance stands at 58%, ether at 10.7%. On the technical front, FXStreet analysis clearly outlines the levels: bitcoin trades above its 50-, 100-, and 200-day exponential moving averages, which are clustered between $75,700 and $80,200; the Relative Strength Index (RSI) at 55 points to steady but non-overextended upward momentum, while the MACD remains below the zero line, indicating recent gains reflect a correction of prior weakness rather than a momentum breakout. Initial resistance sits overhead at $85,000, with a daily close above opening the door for a more decisive continuation; immediate dynamic support lies at the 50-day average at $80,195, followed by the 100- and 200-day averages at $76,411 and $75,744. Ether closed at $2,543, above its 50-day average at $2,505; RSI settled to a neutral 45, with resistance overhead at $2,800 and $3,000, and support below at $2,500 alongside averages at $2,351 and $2,307. XRP trades at $1.417, holding just above its 50-day average at $1.399.

Institutional flows, however, do not yet confirm the recovery, marking today’s most notable crypto data point. According to Farside Investors data, US spot bitcoin funds saw net outflows of $386.3 million during the first seven trading days of October. The month opened with inflows of $102.7 million on October 1 and $189.9 million on October 2, followed by $89.8 million in outflows on October 5 and $118.8 million in inflows on October 6; primary selling hit midweek, with $484.9 million leaving funds on October 7 and $244.1 million on October 8. A modest $21.1 million inflow on October 9 brought the monthly total to its current standing. The picture is heavier for ether funds: zero net inflow days recorded since September 28, with a nine-session losing streak pulling $697.4 million through October 9—$635 million of which occurred in October alone, marking all seven trading days of the month negative. Concentration is notable: BlackRock’s IBIT fund single-handedly holds $66.3 billion of the total $105.84 billion in net assets (~63%). All of Friday’s $21.13 million inflow went to IBIT, Fidelity’s FBTC lost $3.58 million, and nine out of 12 funds recorded zero flows. Spot bitcoin funds hold 6.38% of bitcoin’s market cap, making their flows a proxy for institutional demand; without these funds, a rally requires alternative buyers. The Fear & Greed Index sits at 39 in the Fear zone. Among altcoins, Sonic (+29.81%), Algorand (+10.81%), ENA (+10.02%), XTZ (+8.41%), and AVAX (+7.19%) stood out; Monero was the only declining major.

Second Story: Korean Won Hits Two-Year High

Today’s most notable FX move took place in the South Korean won: the currency reached its strongest level against the dollar in two years at 1,332.88, gaining 7.4% year-to-date. According to Bloomberg, heavy dollar selling by local corporations and falling oil prices drove the movement. These two factors capture the structure of Korea’s economy this year. First, export revenues: Samsung reported last week that Q3 operating profit surged 783%, crossing the 100 trillion won threshold for the first time in history to 107.4 trillion won ($80.2 billion), driven by AI memory demand. Alongside SK Hynix, these two companies generate massive foreign currency income, strengthening the currency as funds are repatriated and converted into won. Second, energy: Korea is a net oil importer, so any easing in oil directly improves its current account balance.

The interesting contradiction is that currency strength is not translating to the equity market. The KOSPI fell 2.2–2.98% today to 6,428, making it the region’s weakest market; the index had also been heavily sold last week. The reason lies in the Korean stock market’s extreme concentration on the AI theme: a report published last week by the Asean+3 Macroeconomic Research Office highlighted that certain regional stock markets—particularly South Korea—are heavily concentrated in AI, leaving them vulnerable to sharp repricing. Thus, the same theme strengthens the currency while leaving equities fragile. The takeaway for domestic investors is that growth stories reliant on a single theme can cause FX and equity markets to move in opposite directions; Korea serves as a live example. Bank of Korea Governor Shin Hyun Song will be in Bangkok this week for the IMF/World Bank meetings, and his comments regarding FX will be monitored.

Key Levels to Watch

• US CPI, Wednesday: Headline expected at 0.6% MoM / 3.7% YoY; core expected at 0.2% MoM / 2.5% YoY. Market reaction hinges on the core reading; according to Barclays, a soft print could prompt the Fed toward a more comforting tone heading into its October meeting.
• Bitcoin, 85,000 / 80,195: FXStreet’s resistance and 50-day average support. A daily close above 85,000 opens the continuation path; MACD remains below zero, confirming this as a corrective recovery.
• Brent, 100 / 109.97: Psychological threshold and recent high. Without confirmation of an energy ceasefire and amid ongoing Huti attacks, upside risks dominate; Goldman calculates the risk premium at over $20.
• ETF Flows: October saw $386 million leave bitcoin funds and $697 million leave ether funds. Failure of flows to turn positive alongside price recovery indicates the rally lacks institutional confirmation.
• Credit Risk Premium: US Investment Grade index at its highest level since war began. The real test of AI debt lies within these spreads; sustained widening will challenge equity market optimism.
• EUR/USD, 1.1201: Consolidation expected following a five-week drop. According to OCBC, French headline intensity will fade, but structural issues will cap any rally.

Weekly Calendar

Date	Day	Event
Oct 12	Monday	IMF & World Bank annual meetings begin in Bangkok; Japan markets closed, US partial holiday
Oct 13	Tuesday	Earnings season begins: Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo report this week; IMF World Economic Outlook & Global Financial Stability reports
Oct 14	Wednesday	US Sept CPI (Headline expected 0.6% / 3.7% YoY; Core 0.2% / 2.5% YoY)
Oct 15	Thursday	US PPI and retail sales; TSMC Q3 earnings (expected 6th consecutive record quarter)
Oct 16	Friday	Fed Chair Kevin Warsh speaks at IMF meetings
Oct 28	Wednesday	FOMC (Hike probability at 17–18%)
Nov 3	Tuesday	US midterm elections; Dec 9 FOMC (Hike probability at 85–86%)