Fed and ECB hold rates, markets price a December hike as energy prices rise

Macro & central banks

• Fed: rates held in October. Chair Kevin Warsh pointed to tighter financial conditions as evidence that the September hike is working. The Fed did not commit on December. BofA now expects two more hikes, in December 2026 and March 2027, with a terminal rate between 4.25% and 4.5%.
• ECB: deposit rate held at 2.5%. The bank notes that energy prices keep rising, which weighs on inflation, while growth risks to the downside. Investors largely bet on a hike in December.
• Succession: Christine Lagarde will step down on February 7, 2027. Pablo Hernandez de Cos (Spain) and Klaas Knot (Netherlands) are cited as possible successors. Emmanuel Macron called for an orderly and balanced transition.
• Riksbank: UBS expects a 25 bp hike to 2.0% at next week's meeting, with 22 bp already priced in. A pause in December would follow.
• Egypt: a surprise 100 bp hike takes the deposit rate to 20%, the first increase since March 2024, while a poll of 13 analysts had expected no change.
• UK: John Healey's first budget reassured bond markets, with 10 year gilt yields down 2 bp. It defers hard choices, however: fiscal headroom fell to 14.5 billion pounds from 23.6 billion in spring.

Energy & geopolitics

• Iran: Donald Trump received a briefing on possible military options from Admiral Brad Cooper, who heads US Central Command. Washington is weighing new strikes while also seeking to revive talks with Tehran.
• Oil: nine very large crude carriers loaded on Wednesday at Saudi terminals in the Persian Gulf, the highest activity there since hostilities began in late February, with combined capacity of about 18 million barrels. A single day is not enough to confirm a sustained rise in exports.
• Gas: QatarEnergy is buying long term US LNG and supplies from other providers as a hedge against a disruption in the Strait of Hormuz, according to CEO Saad Sherida Al Kaabi.

Tech & power demand

• Norway: data centers consume 3 to 4 TWh, about 2.5% of demand, with 25 TWh projected by 2035 based on approved grid connections. A party is calling for an urgent parliamentary debate next week that could lead to a ban on new sites.

To watch today

• Any signal on talks with Tehran or on new strikes, which could weigh on oil and indices.
• Saudi loadings over the coming days, to confirm or not the recovery.
• The Norwegian parliamentary debate and the Riksbank decision, both due next week.
• The articles do not provide a calendar of releases for today's session.