TMGM Daily Market Breakfast: 23 September 2026

Morning Snapshot

• Oil prices extended a sharp retreat, with Brent falling below $99 a barrel and WTI trading near $89, as Saudi Arabia restarted its East-West pipeline, U.S.-Iran talks showed signs of progress and U.S. inventory data pointed to a 1.7 million-barrel crude build.
• Federal Reserve officials reinforced a restrictive policy stance after last week's 25 basis-point rate increase to a 3.75%-4.00% target range, while markets priced an 89.2% probability of another December hike and the U.S. Dollar Index rose to around 100.70.
• U.S. and Iranian officials held lengthy indirect talks on the sidelines of the UN General Assembly, with Washington describing the discussions as productive and both sides signalling further engagement through mediators.
• ECB Governing Council member Joachim Nagel said restrictive policy cannot be ruled out after high energy prices pushed inflation away from the central bank's 2026 target.
• The British pound weakened toward $1.33 after the UK's fiscal deficit exceeded market expectations, adding pressure ahead of the government's first budget.
• The Japanese yen softened and USD/JPY rose to around 157.60 after the Bank of Japan's recent rate hike was not followed by explicitly hawkish guidance, keeping intervention risks in focus.
• NEAR and Ondo announced a partnership to offer tokenized U.S. stocks and ETFs with confidential execution, adding to a broader expansion in on-chain real-world assets.

Market Developments

Energy

Brent fell below $99 a barrel and extended its losing streak to six sessions, while WTI traded near $89 and around two-week to nearly three-week lows as supply concerns eased.

Foreign Exchange

The U.S. Dollar Index climbed to around 100.70, its highest level since late July, while EUR/USD slipped below 1.1450, GBP/USD weakened toward 1.3310, USD/CHF rose to around 0.8220 and USD/JPY advanced to about 157.60.

Macroeconomics & Central Banks

Fed Officials Reinforce Restrictive Stance as Markets Price Another Hike

Federal Reserve officials continued to back a restrictive policy stance after last week's 25 basis-point increase lifted the federal funds target range to 3.75%-4.00%. Richmond Fed President Thomas Barkin said the increase was warranted because risks to inflation outweighed risks to maximum employment, while Boston Fed President Susan Collins said a somewhat more restrictive policy setting should help return inflation sustainably to the central bank's 2% target.

Barkin said last week's move would help restore price stability and that policymakers would assess whether further increases are needed. He also described the labour market as balanced rather than overheated, with consumer balance sheets and spending still holding up. Market pricing reflected that message, with the CME FedWatch Tool showing an 89.2% probability of a December rate increase.

The policy outlook supported the U.S. dollar, with the Dollar Index rising to around 100.70 and reaching its highest level since late July. The stronger dollar coincided with weakness in major counterparts including the euro, sterling, the Swiss franc and the yen.

ECB's Nagel Says Restrictive Policy Cannot Be Ruled Out

Bundesbank President and ECB Governing Council member Joachim Nagel said restrictive policy cannot be ruled out, underscoring concern that higher energy prices have pushed inflation away from the ECB's 2026 target. His remarks kept the focus on the euro area's inflation outlook as policymakers assess the impact of the latest energy shock.

Nagel's comments came as the euro traded below 1.1450 against the dollar, with the single currency also facing pressure from broader dollar strength and German political risks highlighted in market coverage during the session.

Bank of Japan's Guidance Keeps Yen Under Pressure After Recent Rate Hike

The Japanese yen remained under pressure after the Bank of Japan's rate hike last week was not followed by explicitly hawkish guidance. USD/JPY rose to around 157.60 in early Asian trading, extending the yen's decline as markets weighed the central bank's next steps.

The move kept official intervention risk in focus, with the currency's weakness unfolding even after the BOJ had already tightened policy. The broader backdrop of U.S. dollar strength added to pressure on the yen.

Geopolitics & Energy

Oil Extends Six-Session Slide as Saudi Flows Resume and U.S.-Iran Talks Progress

Oil prices fell sharply again, with Brent dropping below $99 a barrel and WTI trading near $89, as traders reassessed supply risks in the Middle East. Brent extended its decline to six straight sessions, its longest losing streak since August 2025, taking cumulative losses to more than 9.5%, while WTI hovered around two-week to nearly three-week lows and stood roughly 13% below last week's highs.

A key driver was Saudi Arabia's restart of the East-West pipeline, which bypasses the Strait of Hormuz and has capacity of around 7 million barrels a day. The route is expected to gradually restore export flows from the Yanbu terminal, easing some of the supply disruption concerns that had driven crude sharply higher earlier in the conflict.

Diplomatic developments also weighed on prices. President Donald Trump said recent discussions with Iranian officials were very productive, and U.S. Special Envoy Steve Witkoff said mediators had completed a lengthy round of indirect talks with the Iranian delegation on the sidelines of the UN General Assembly. Tehran also said it would be prepared to reopen the Strait of Hormuz within seven days if the U.S. lifts its blockade on Iranian ports, although no agreement was reached and both sides indicated further discussions would be needed.

U.S. inventory data added further pressure. API figures showed crude stocks rose by 1.7 million barrels last week, compared with expectations for a 578,000-barrel draw, while gasoline and distillate inventories each fell by 2.2 million barrels. The market was awaiting official EIA data for confirmation.

U.S. and Iran Hold Lengthy Indirect Talks at UN General Assembly

U.S. and Iranian officials held lengthy indirect talks through mediators on the sidelines of the UN General Assembly, marking the first such discussions since June. Steve Witkoff, the U.S. special envoy to the Middle East, said the talks were completed via mediators and described them as lengthy, while President Donald Trump said the meeting lasted three hours and was very productive.

No agreement was announced, but both sides signalled that further discussions are expected. The diplomatic contact became a central market focus because of its implications for Middle East shipping routes, sanctions pressure and broader energy supply risks.

Regional Developments

UK Fiscal Deficit Overshoots Expectations Ahead of First Budget

Sterling weakened toward $1.3310 after the UK's fiscal deficit came in above market expectations, worsening the fiscal backdrop ahead of the government's first budget. The softer pound reflected concern that the deterioration in the public-finance position will add pressure on Chancellor John Healey as budget planning intensifies.

The move left GBP/USD near the 1.3300 area in early European trading, with the broader rise in the U.S. dollar adding to the pressure on the currency.

Digital Assets & Market Structure

NEAR and Ondo Launch Tokenized U.S. Stocks and ETFs With Confidential Execution

NEAR Protocol and Ondo announced a partnership to let eligible users buy, trade and hold tokenized U.S. stocks and ETFs from the same account they use for crypto, with confidential execution built into the process. The service uses NEAR Intents to allow purchases of Ondo's tokenized real-world assets using crypto from 30 different networks without linking users' identities to their positions.

NEAR said its Confidential Intents framework keeps balances, trade sizes and activity hidden while settling on a private NEAR shard. Ondo is providing the tokenized equities, legal structure, compliance rails, broker-dealer infrastructure and links to traditional market liquidity.

The launch includes tokenized shares tied to companies such as Nvidia, Tesla, Apple, Alphabet, Meta, Microsoft and Amazon, as well as tokenized ETFs including SPDR S&P 500 and Invesco QQQ. Ondo said it has more than $3.66 billion in assets, while on-chain real-world assets have reached $46.3 billion and tokenized stocks added $591.9 million over the past 30 days.