Oil Price Rise Extends Further, Sending Market Interest Rates Higher
September 9, 2026
The Middle Eastern war has settled into a nasty game of chicken as both sides escalate their military attacks. Brent and West Texas Intermediate crude oil prices are each over 3.0% higher today alone at $101.15 and $96.37 per barrel. In turn, 10-year sovereign debt yields today so far have risen nine basis points in France and Italy, eight bps in the U.K., seven bps in Spain, six bps in the United States and Germany, and five basis points in Switzerland. In the U.S., the 30-year fixed mortgage rate climbed 6 basis points to 6.85% last week, its highest level since the week of June 20, 2025 and up from 6.09% in the first half of February. All things considered, the dollar today is showing some resilience, holding steady against the euro, sterling and Australian dollar and dipping just 0.2% relative to the Japanese yen. Canada has responded to the U.S. tariff increases tit-for-tat, yielding the dollar a 0.2% uptick against the loonie. One of the dollar’s largest move has been a 0.5% decline relative to the Indonesian rupiah.
With only few exceptions, Asian equity markets closed narrowly mixed including rises of 0.2% in Japan and 0.3% in China. But European and North American share prices are experiencing a rough session. The DOW, currently down over 400 points, is headed for its second 3-session consecutive decline since August 28 and is 2.4% below its closing last Thursday.
The price of silver spiked 2.5% so far today, while gold’s gain has been less than 1%.
None of the three central banks that announced interest rate decisions today made a change.
- The Bank of Thailand’s one-day repo rate was kept at 1.0%. Six 25-basis point reductions were previously made between late September 2024 and this past February to that accommodative level. CPI inflation in Thailand of 2.5% remains within the 1-3% target and was below zero percent as recently as March 2026.
- Officials at the National Bank of Georgia face a different situation, with 5.6% inflation, also double the 3% target. Their policy interest rate has been at 8.25% since a 25-bp hike done four months ago and which reversed the previous move, a 25-bp cut way back in May 2024. According to a statement today, “the moderately tight monetary policy stance aims to minimize risks related to inflation expectations and second-round effects, ensuring that inflation returns rapidly to the 3% target once the supply shock dissipates.”
- At Poland’s Narodowy Bank, the key interest rate was last changed in March. A 25-basis point cut at that time to 3.75% had followed 175 basis points of reduction in 2025. Polish inflation is within the 1.5-3.5% target corridor but just barely at 3.4% as of August. Growth has been ample and strengthened last quarter. “The outlook for global activity and inflation is subject to uncertainty, stemming, in particular, from the conflict in the Middle East,” according to the central bank’s statement.
Market attention is now directed at the release tomorrow and Friday of U.S. producer and consumer price figures. These will be the last price data before the FOMC’s interest rate decision a week from today, although monetary officials may then have advance notification of import price inflation, which also gets released on September 16.
Several other countries reported price statistics today, most notably China where consumer price inflation picked up to a 3-month high but still lower-than-desired 0.8% in August. Core CPI printed at a 2-month high of 1.0%, and producer price inflation in China exceeded expectations at a 2-month high of 3.8%.
Mexican CPI inflation last month was at a 2-month high of 3.26% and associated with a lower-than-forecast core CPI reading of 3.88%, a 17-month low.
Greek consumer price inflation of 3.8% last month represents a 2-month high but still well below April’s 5.4%.
In Lithuania, producer prices jumped 1.2% on month after a 2.3% increase the month before, which sent the on-year PPI inflation rate to a 41-month high of 13.6%. And in oil-producing Norway, producer price inflation of 30.1% in August was its highest in 47 months.
Other reported data of interest today featured French industrial production, which in July fell 0.4% on month and 0.5% on year, a far cry from the average 5.6% annual increase of output during 2025. Slovakian industrial production rose 2.4% on year in July (most in a half year). A 4.7% on-year increase in Malaysian industrial production was the least in four months but higher than its 2025 increase of 3.6%.
Consumer confidence in Indonesia rebounded 1.5% in August, but the reading of 118.5 was much closer to 115.0 floor than the 127.0 ceiling of readings during the past year.
Japanese machine tool orders in August exceeded their year-earlier level by 65.4%, the most in 58 months.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Bank of Thailand, Chinese CPI and PPI, Narodowy Bank, National Bank of Georgia, oil price elevation
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