Trouble City So Long As Oil Price Rise Extends
September 15, 2026
The Brent and West Texas Intermediate crude oil prices climbed by a further 2.4% and 2.8% overnight. The Middle East’s stalemate keeps subjecting interest rates to upward pressure. The 30-year, 10-year and 3-month U.S. Treasury yields are 1, 1, and 2 basis points higher than yesterday, while ten-year sovereign debt yields in other economies have risen by five basis points in Japan, eight bps in Australia, four bps in Britain, France, Italy and Spain, and three basis points in Germany. The comparable Swiss yield, down 3 bps, has been an outlier. In the first four months of its war with Iran, the U.S. federal government reportedly spent more than $8 billion per month in that endeavor.
In addition to the stalemated war, if not more so, unrestricted and lightning-fast development of artificial intelligence is also feeding the anxious mood of world financial markets, weighing on equities, causing wild swings in crypto, but also lifting the dollar. The DOW and Russell 2000 indices are down around 1% already. Drops of around a similar amount this Tuesday were recorded in Hong Kong, South Korea, India, Singapore, Australia and Indonesia, but those in key European exchanges thus far have been limited to less than a half percent. Bitcoin’s price rose solidly Monday but is down about 3% today. Dollar gains today have been strongest against the Indonesian rupiah and South Korean won, followed by Japan’s yen. Precious metals like gold and silver show price declines of around 0.5%.
China released several economic indicators for August. Year-on-year growth in retail sales of 0.4% underwhelmed expectations and was a mere third of the average pace in the first half of this year. A 5.3% on-year rise of industrial production exceeded expectations and was on a par with the year-to-date average pace. House prices posted a 0.1% monthly dip and a 3.0% year-on-year decline, the smallest 12-month drop in nine months. China’s jobless rate rose to a 5-month high of 5.3%, and fixed asset investment in January-August sank 7.2% in contrast with a 0.5% uptick recorded in the first eight months of 2025.
Japan’s tertiary index, a gauge of the perceptions among service sector workers, rose 0.4% in July and were 2.3% above year-earlier levels were closely aligned with forecasts and the average 2.0% increase recorded in 2025.
Having decelerated from 20.3% in April 2022 to -3.5% by October 2023, German wholesale price inflation has rebounded to a 42-month high of 6.8% as of August.
French and Spanish consumer price inflation in August were left unrevised from preliminary estimates of 2.4% and 4.3%, respectively. Among other price data releases today, Slovakian consumer inflation eased to 3.1% last month from 3.3% in July; Bulgarian CPI inflation bounced higher to a two-month high of 5.1%; Polish consumer price inflation of 3.4% last month was its highest since mid-2025; Croatian CPI inflation climbed to 4.2%; Nigerian consumer price inflation held steady at 15.4%; Krygyzstani inflation increased a half percentage point to a 41-month high of 12.0%; and South Korean import prices recorded a smaller 15.6% 12-month rate of increase but remained in double-digit inflationary territory for a sixth straight month.
The August ZEW Institute monthly survey of investor sentiment toward Germany and Euroland yielded a lower-than-forecast German reading, a surprise lessening of sentiment regarding the whole euro bloc, higher inflation expectations, and less pessimistic perceptions of current economic conditions.
Euroland’s seasonally adjusted trade surplus widened to EUR 5.0 billion in July from just EUR 1.0 billion in June. In unadjusted terms, however, the year-to-date surplus of EUR 17.0 billion was substantially less than EUR 92.8 billion in January-July of 2025. This highlights both more expensive imported energy and the fallout of tariffs.
The Central Bank of Armenia’s refinancing rate has been increased to 6.75% from 6.50%, reversing a 25-basis point cut implemented last December. The rate had been as high as 10.75% in the first half of 2023. From a low point of -1.7% early in 2024, consumer price inflation has re-accelerated to 4.4%. Officials target medium-term inflation of 3%. Explaining today’s action, they note, “amid prolonged persistence and some broadening of regional conflicts, the risks of a further weakening in global demand conditions and, at the same time, intensifying inflationary pressures are gradually becoming more tangible.”
The National Bank of Angola’s policy interest rate was reduced today by a full percentage point to 14.75% in recognition of uninterrupted consumer price inflation decelerations every month since peaking at 31.1% in July 2024. At 8.8%, such is down to a 136-month low and well south of the new 14.75% central bank interest rate level, which had been as high as 19.5% from February 2025 until the first of six reductions then.
Day 1 of the Federal Open Market Committee meeting begins today. The meeting ends tomorrow with a likely announced interest rate cut and updated Fed macroeconomic forecasts.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Central Bank of Armenia, Chinese retail sales and industrial production, Euroland and German ZEW expectations index, Euroland trade surplus, National Bank of Angola
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