Oil prices ignored Trump's comments, holding steady above $100; rising expectations of a Fed rate hike increased the likelihood of a disappointing meeting tomorrow; weakening risk appetite led to a continued dollar rally; gold prices continued their decline. Oil prices remain high, hovering in the triple digits, with the December WTI crude futures contract at $93. The latest price surge overnight triggered a response from US President Trump. His comments that the US-Iran conflict wouldn't last long—a complete reversal of his claims last week that the conflict would extend into the early November US midterm elections—and his announcement that Russia and Ukraine had agreed not to attack oil facilities (which, according to the Ukrainian president, remains only a proposal and has not yet been approved), seemed to cap the price rally. However, these comments failed to push prices down, as investors remained focused on the damaged Saudi Arabian oil pipeline—which, after repeated attacks, could take weeks to fully recover—and the fact that the Strait of Hormuz remains largely closed and riddled with Iranian mines, despite months of negotiations. Trump has suddenly become more anxious about oil prices as US consumers begin to feel the impact of rising energy costs. He won the 2024 presidential election by capitalizing on voters' anger over runaway post-pandemic inflation, but he now faces a similar problem that could be extremely costly. If the government loses its majority in either house of Congress (the focus is on the Senate), it will be truly on the back foot for the next two years. The dollar's rally continues . The dollar remained sought after after a strong start to the new week, as oil prices dampened risk appetite and U.S. stock futures gave back most of yesterday's gains. USD/JPY rose tentatively slightly today as investors prepared for Friday's Bank of Japan meeting; GBP/USD fell, despite relatively positive employment and income data released earlier in the day. Notably, risk-averse currencies such as the New Zealand dollar and Australian dollar underperformed. With a light U.S. data schedule today, coupled with the 20-year Treasury auction (a less favored maturity on the yield curve), investors will continue to focus on tomorrow's Federal Reserve meeting. Market expectations have been quickly priced in: the prospect of a 25 basis point rate hike tomorrow (Wednesday) is fully priced in, with similar hikes expected in December and March 2027. Despite the Fed's already aggressive repricing expectations, the ECB's rate hike expectations are even more hawkish—in addition to last week's rate hike, the market expects a cumulative tightening of nearly 70 basis points by March 2027. That said, despite continued hawkish comments from ECB officials, the euro/dollar exchange rate is still lower today, testing support formed by yesterday's low of 1.1522 and the 50-day simple moving average (SMA). If Warsh's hawkish expectations are met, the lower limit of the wide trading range formed since June 2025 may face another test at tomorrow's Fed meeting. Spot gold falls Spot gold continued its decline, falling nearly 9% from its late August high, awaiting the Fed meeting.