MPC Markets Morning Call — 8th September 2026: Oil Nears $100 as Hormuz Tensions Escalate, Rate Hike Bets Build
US equity futures slipped on a quiet Labor Day session as fresh tanker attacks in the Strait of Hormuz pushed Brent crude toward $98 a barrel — its highest in seven weeks. Markets are pricing a near 60% chance the Fed hikes rates on September 16, with Friday’s CPI print set to be the decisive catalyst. The yen surged to a seven-month high, copper hit an all-time record, and South Korean memory stocks rallied on OpenAI’s GPT-6 launch. ASX 200 futures point to a flat-to-lower open as the Australian dollar touches a four-month high.
Escalating US–Iran hostilities in the Strait of Hormuz dominated a thin, holiday-shortened session on Monday. Brent crude rose 1.3% to $97.50 a barrel — the highest in seven weeks — after US forces struck three Iranian tankers and the IRGC launched ballistic missiles at two US Navy warships. Tehran signalled plans to declare a restricted zone near the strait in coming days, with vessel traffic through the waterway collapsing to as few as two transits on Saturday versus a pre-war average of roughly 125 per day. S&P 500 futures fell 0.2% with cash markets closed for Labor Day, while Nasdaq 100 contracts edged higher. The ECB is widely expected to hike by 25bp on Thursday, and markets now price a 58–60% probability of a Fed hike on September 16, with UBS calling for two increases before year-end. The dollar fell 0.2% and the yen surged 1.2% to a seven-month high of 154.32, while copper hit an all-time record. ASX 200 futures were down 6 points or 0.1% to 8,991, with the Australian dollar at a four-month high.
S&P 500 futures fell 0.2% and Dow futures dropped 0.6% on Labor Day, while Nasdaq 100 futures edged up 0.1% — MSCI Asia Pacific rose 1.9% and the Stoxx 600 closed flat at 649.9.
US forces struck three Iranian tankers and the IRGC launched ballistic missiles at two US Navy ships, with Tehran planning a restricted zone near the Strait of Hormuz where transit has collapsed to single-digit vessels per day.
Brent crude rose 1.3% to $97.50 — highest in seven weeks — while WTI climbed 1.3% to a record high, and OPEC+ held production steady, pausing six months of output increases.
Markets price a 58–60% chance of a Fed hike on September 16, the ECB is expected to raise by 25bp on Thursday, and UBS forecasts two rate hikes before year-end — the 10-year Treasury yield held at 4.78%.
Copper surged to an all-time high, spot gold eased 0.6% to $4,404.13, and South Korean memory stocks rallied sharply on OpenAI’s GPT-6 release — Oracle and Adobe report Thursday as the next AI demand test.
ASX 200 futures dipped 6 points (0.1%) to 8,991, the Australian dollar hit a four-month high, and Friday’s US CPI print looms as the week’s pivotal event for domestic rate expectations.
Equities: Futures Drift Lower on Thin Holiday Volumes
US equity markets were closed for Labor Day, but futures trading told a cautious story. S&P 500 futures fell 0.2% as of 3:30 p.m. New York time, Dow Jones Industrial Average futures dropped 0.6%, while Nasdaq 100 futures managed a gain of 0.1%. The divergence reflected the AI-driven bid in tech names offset by energy-inflation anxiety weighing on cyclicals and industrials.
In Asia, the MSCI Asia Pacific index rose 1.9% and the MSCI Emerging Markets index gained 1.7%, led by South Korea’s memory chip heavyweights. The release of OpenAI’s GPT-6 model continued to fuel enthusiasm for the AI hardware supply chain, with the KOSPI among the session’s strongest performers. European shares were a different story — the Stoxx 600 closed flat at 649.9 as economically sensitive sectors bore the brunt of inflation concerns, while the Swiss SMI dropped 0.8% and the DAX slipped 0.2%.
JPMorgan strategists led by Mislav Matejka urged investors to buy any dips, arguing that the robust corporate earnings backdrop remains intact. “As corporate profits remain on an uptrend, any bout of weakness in equity prices would leave them cheaper,” they wrote. “We believe one should continue using the dips to add.” Oracle and Adobe report on Thursday, providing the next test of AI infrastructure demand.
Geopolitics: Hormuz Tanker Attacks Escalate, Iran Eyes Restricted Zone
The Strait of Hormuz crisis deepened over the weekend after the largest exchange of tanker attacks yet between US and Iranian forces. US forces struck and disabled three Iranian oil tankers in what Washington described as retaliation for an IRGC ballistic missile attack targeting two US Navy warships in the region. Tehran responded by signalling plans to declare a restricted zone outside the strait “in the coming days.”
The impact on shipping has been severe. Vessel traffic through the strait has collapsed — just two vessels transited on Saturday and six on Sunday. The 10-day moving average slipped to 10, compared with roughly 125 large commodity vessels per day before the war began in late February. Diesel prices hit record highs last week and are now around 90% above pre-war levels, feeding directly into food, transport, and manufacturing costs globally.
Separately, Iran and Oman were reported to be just days away from a deal to manage shipping through the strait, though the practical implications remain unclear given the ongoing military exchanges. Euro zone investor morale nonetheless hit a four-year high in September, while Q2 GDP came in above expectations at 0.6% quarter-on-quarter and 1.2% year-on-year.
“Markets will be adjusting their positioning heading into the Fed’s blackout period. The risk is the Fed turning hawkish and that will be reflected in equities. Bond markets will remain nervy and we remain focused on fixed-income volatility.”
In European politics, Germany’s far-right AfD surged into first place in the Saxony-Anhalt state election on Sunday with 44% of the vote, dealing a major blow to Chancellor Friedrich Merz. While the party fell short of an outright majority, its policy platform — including a withdrawal from the euro — raised longer-term questions about eurozone stability. XTB’s Kathleen Brooks warned: “This development is dangerous for the longer-term stability of the single currency.” The euro has fallen 1.1% year-to-date, making it the weakest-performing major currency against the dollar in 2026.
Energy, Commodities & FX: Brent Closes on $100 as Copper Hits Record
Brent crude rose 1.3% to $97.50 a barrel — its highest level in seven weeks — while WTI climbed 1.3% to $92.46, hitting record territory. Oil has surged roughly 35% since late February when the Iran war began, and last week alone Brent gained 8% and WTI nearly 10%. ING analysts noted the market “remains well-supported with little sign of a peace between the US and Iran,” though they added that “despite the escalation, oil continues to flow.”
OPEC+ announced after a meeting on Sunday that it will keep production steady in October, pausing a six-month run of output increases as the group shifts focus to determining new production quotas for 2027. The decision removes one potential supply-side buffer just as Hormuz disruptions intensify. Copper surged to an all-time high on tariff-related supply chain disruptions.
In precious metals and currencies, spot gold eased 0.6% to $4,404.13 an ounce. The 10-year Treasury yield was little changed at 4.78%, Germany’s 10-year rose 5bp to 3.39%, and Britain’s 10-year climbed 4bp to 5.18%. The Bloomberg Dollar Spot Index fell 0.2% to its lowest since May 8. The Japanese yen surged 1.2% against the dollar to 154.32 — a seven-month high — on mounting BOJ rate-hike expectations and intervention risk. The euro was flat at $1.1623, the pound rose 0.2% to $1.3540, and bitcoin fell 0.9% to $79,225.
Central Banks & Rates: Hike Expectations Build Globally
The energy-driven inflation shock is forcing central banks onto the front foot. The ECB is widely expected to raise rates by 25 basis points to 2.50% on Thursday, and Deutsche Bank now expects a follow-up quarter-point increase in December. While ECB policymakers have signalled little appetite for further tightening beyond September, traders are pricing in another increase by year-end and one more in 2027.
For the Federal Reserve, last week’s bumper payrolls report — 162,000 jobs added in August, well above expectations — has left markets pricing a 58–60% chance of a 25bp hike when it meets on September 16, with a 70% probability for a move by October. UBS analysts including Jonathan Pingle and Abigail Watt argued that Fed Chair Kevin Warsh’s Jackson Hole remarks — stressing the Fed “must be confident” inflation is falling “at sufficient speed” — leave him little choice but to act. UBS forecasts two quarter-point hikes before year-end, though they caution the view is “not high conviction” and a downside surprise in this week’s CPI could “undo this assessment.”
“Central bank patience through the energy shock has been supportive of asset prices and the credit cycle. However, central banks are now on the move.”
In Japan, markets are pricing a 75% chance the BOJ raises rates a quarter point at its September 18 meeting, with a 60% probability of another move by December. The convergence of global tightening expectations into a single week — ECB Thursday, Fed September 16, BOJ September 18 — creates an unusually concentrated period of central-bank risk.
ASX Outlook & the Day Ahead
Australian shares are set to drift lower at the open, tracking similar weakness across European bourses. ASX 200 futures were down 6 points or 0.1% to 8,991 at 6:30am AEST. The Australian dollar touched a four-month high, buoyed by elevated commodity prices and broad dollar weakness. Energy stocks should find support from the crude rally, but rate-sensitive sectors will be watching the global bond selloff closely.
The week ahead is dominated by a critical US CPI print on Friday that will likely determine whether the Fed hikes on September 16. The ECB meets Thursday with a 25bp hike all but certain. Locally, the ASX faces a busy week of global catalysts with thin local data.
- ECB Rate Decision (Thursday 12:15am AEST) — Widely expected to raise by 25bp to 2.50%. Watch the press conference for signals on December; Deutsche Bank now expects another hike then.
- US CPI (Friday 10:30pm AEST) — The pivotal print for September Fed pricing. A downside surprise could unwind hike bets; an upside surprise cements a September move.
- Oracle & Adobe Earnings (Friday AEST) — Both report Thursday US time. Key reads on AI infrastructure demand and the GPT-6 catalyst for the software sector.
- US Treasury Auctions (Midweek) — Will test demand for bonds with yields near multi-year highs, particularly after last week’s global bond selloff.
- BOJ Rate Decision (18 September) — Markets price 75% odds of a quarter-point hike. The yen’s 1.2% surge overnight signals positioning is already underway.
Corporate News
Novo Nordisk stopped two more trials for its experimental heart disease medicine, in a further blow to the drug’s prospects. Novartis suffered a second trial disappointment within a week after its potential blockbuster cholesterol drug failed in a final-stage study, sending Swiss shares down 3.2%. Jaguar Land Rover will slash some 4,000 jobs as Britain’s largest carmaker grapples with US tariffs, the fallout of a cyberattack, and intense competition.
ADNOC is in talks with the biggest refining companies in Thailand and Africa to invest in their businesses. Uber hired banks for a debut euro bond sale. Lottomatica surged 7.7% after providing details on its proposed merger with Spain’s Cirsa, with Cirsa up 6.1%. An Amazon cargo plane overran a runway at Miami International Airport on Sunday, killing at least five people and temporarily shutting down the airport’s runways.
