A Partial Rebound in Oil Prices and Several Central Bank Decisions
November 5, 2026
Aside from a further 0.4% advance against the Israeli Shekel, net dollar movement overnight was minimal. Israel’s currency has dropped 4.1% against the U.S. currency since October 27.
The Democratic congressional sweep and concerns about AI regulation depressed the South Korean Kospi index by 5.3% and Japanese Nikkei by 1.8%. Playing catch-up to Wednesday’s rallies in other regions, stock markets elsewhere in the Pacific Rim advanced 3.7% in Hong Kong, 2.2% in Indonesia, 2.6% in India, 2.6% in Australia and 2.2% in New Zealand. The Spanish IBEX and Paris CAC have risen by at least 1% as well so far today, and the German DAX and U.S. Dow futures are sporting 0.6% and 0.7% advances. Nasdaq futures are showing red, in contrast.
Ten-year sovereign debt yields have slipped by 7 basis points in Australia, four bps in Japan, three bps in France but remain unchanged in the United States, Germany, U.K., Canada and Spain.
Brent and WTI prices for crude oil have rebounded 2.6% and 1.7% from much steeper losses earlier this week. Gold and silver prices today are up around 1.5%, but Bitcoin’s price, in contrast, has declined 1.0%.
Latest developments in the Middle East conflict include several tankers struck in the Strait of Hormuz, an intercepted Houthi missile aimed at Saudi Arabia, and Qatari mediators awaiting U.S. and Iranian responses to the latest peace treaty proposals.
Confirmed Democratic seats in the House of Representatives after Tuesday’s election total 242 versus a majority threshold of 218, and the party’s estimated total when all tallies are in could be as high as 259. The Senate margin is 54-44 with the winners in Alaska and Mississippi still not called.
U.S. new jobless insurance claims fell 6k in the final week of October to match the 57-year low of 189k first experienced in the week of July 18th. U.S. nonfarm labor productivity growth accelerated to a 3.6% annualized rate last quarter, most in four quarters and faster than the average 2025 advance of 2.5%. Unit labor costs in 3Q 2026 actually fell 0.7% but were still 2.4% higher than in 3Q 2025. On 2025, unit labor costs posted an average 1.9% increase.
By a vote of 8-1, the Monetary Policy Committee of the Bank of England authorized a 25-basis point increase of the policy Bank Rate to 4.0%, marking the first hike August 2023. The rate had thereafter remained at 5.75% until an easing cycle that began in August 2024 and culminated at 3.75% after a 25-basis point cut last December. In commencing a rate hike cycle today, bank officials dealt with that fact that already elevated energy prices had by late October risen considerably further than when their previous quarterly Monetary Policy Report had been published. Noting an 11-month high 3.5% British consumer price inflation rate by September, they revised upward their forecast to 4.5% next quarter and 5% by the middle of 2027. While evidence of knock-on effects from higher energy prices to other prices or wages remains minimal, the committee felt that “the duration and scale of the energy price increase had generated sufficient inflationary pressures in the pipeline to warrant an increase in Bank Rate.” The sole dissenter in the decision, Catherine Mann, wanted today’s move to be an increase of 50 basis points, arguing that
From a risk management and credibility perspective, an activist approach was needed to prevent persistent inflationary dynamics becoming embedded as the economy reached thresholds that threatened to cause non-linear responses in price and wage-setting.
Central Bank interest rates were left unchanged at 13.75% in Brazil, 3.75% in Poland, 2.75% in Malaysia and 4.5% in Norway.
- CPI inflation of 4.6% in Brazil as of September had lately drifted up to the top of the 1.5-4.5% target corridor. Officials at the Central Bank of Brazil acknowledged a recent increase in expected inflation, expressed some concern regarding fiscal policy in the wake of Lula’s reelection, and the elusiveness of peace in the Middle East. But with their Selic interest rate is already so far above inflation, the argument made at this time was that any discussion of cutting the interest at beyond the 125 basis points done earlier this year needed to be put on hold.
- The National Bank of Poland‘s reference interest rate has been at 3.75% since a 25-basis point cut in March. That’s down from 6.75% from Septermber 2022 through September 2023. Polish economic activity slowed last quarter, and CPI inflation slowed in October to 3.5% and is now hovering at the top of a 1.5% to 3.5% target. Future rate decisions will be data dependent.
- Bank Negara Malaysia‘s overnight interest rate has stayed at 2.75% ever since a single 25-basis point cut was implemented in July of 2025. CPI inflation so far this year has averaged 1.8%, and core CPI was a bit below at 1.5%. Growth is solid and a tad above 5.0%. Officials anticipate more inflationary pressure developing in 2027 from energy and food-affecting weather.
- Norwegian CPI inflation of 3.4% remains above the 2.0% target, and rate hikes of 25 basis points this past July and September lifted the Bank of Norway‘s overnight interest rate to 4.5% from 4.0%. Officials felt a pause to assess the impact of these moves toward a tighter stance but a affirmed a commitment to hike the rate further if that becomes necessary to restore the inflation target in a reasonable time. “High inflation over time can make inflation stickier and harder to bring down again. At the same time, the Committee does not want to restrict the economy more than needed.”
Non-U.S. data release highlights this Thursday featured a greater-than-assumed acceleration of Euroland producer price inflation. The PPI leaped 2.5% on month in September following August’s increase of 2.0%, and this raised the 12-month rise to a 43-month high of 11.1% from 5.8% in July and -3.0% last February. The energy component was 30.8% greater than in September 2025.
Serbian producer price inflation of 10.6% in October constituted a 45-month high and contrasted with -0.3% back in January.
German industrial orders rebounded 4.4% in September after a 10.1% plunge in August. On average, third quarter orders were 0.2% above the second quarter’s level. French industrial production fell 0.6% in September and hasn’t posted a monthly rise since April. Output was 1.8% lower than in September 2025.
Construction purchasing manager indices in the U.K. and Euroland were very depressed in October. Where a score of 50 implies no growth up or down, Britain’s index fell to a 3-month low of 43.6. Euroland’s reading of 42.5 was at a 6-month low, including Germany’s 19-month low of 41.6, Italy’s 3-month low of 47.3 and France’s 2-month low and dreadful 38.2.
The Russian composite PMI in October fell to a 3-month low and stagnant 50.0. South Africa’s private PMI matched September’s 9-month low of 49.0.
Year-on-year GDP growth in Indonesia of 5.5% was its highest in a year and compares to calendar year growth rates of 5.1% in 2025 and 5.0% in 2024.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Bank Negara Malaysia, Bank of England, Central Bank of Brazil, Euroland PPI, German industrial orders, National Bank of Poland, Norges Bank
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