Crude oil traded near $86 per barrel on Tuesday after falling more than 4% in the previous session, reaching its lowest level since late August amid diplomatic efforts to end the Middle East conflict. President Donald Trump expressed optimism about a possible resolution, citing “momentum toward an end” to the conflict following his meeting with Qatar’s prime minister. Meanwhile, Congressional Democrats are considering using the Dec. 11 government shutdown deadline to pressure Trump into ending the war. However, tensions remain elevated as US forces reportedly launched another strike on Iran’s Qeshm Island, while US Secretary of State Marco Rubio tempered expectations for progress in negotiations. Tanker vessels also remained targets of attacks in the Strait of Hormuz, while clashes involving Saudi Arabia and Iran-backed Houthis continued. Elsewhere, investors are awaiting monthly oil market reports from the US EIA, OPEC and IEA for further insights into global supply and demand.

Japan’s household spending dropped 6.8% year-on-year in September 2026, deepening from August’s decline and market expectations of a 3.1% drop. It marked the tenth consecutive month of contraction and the steepest fall since September 2020, highlighting the impact of persistent inflation and higher borrowing costs. Spending weakened across most categories, including food (-2.5% vs -1.4% in August), utilities (-10.5% vs -5.2%), healthcare (-7.6% vs -1.9%), education (-23.5% vs -12.3%), furniture and household goods (-6.4% vs -6.3%), and culture and recreation (-8.7% vs -4.3%). Transport and communication spending also plunged (-9.1% vs 0.2%), while clothing declined more slowly (-3.6% vs -8.7%). Meanwhile, housing expenditure was flat after falling 5.8% in August. On a seasonally adjusted monthly basis, spending fell 2.8%, reversing August’s 0.1% increase and missing expectations of a 0.3% rise, marking its first decline in three months.

Median US inflation expectations for the year ahead were steady at 3.9% in October 2026, the same as in September, and holding at 2023-highs, according to the Federal Reserve Bank of New York’s Survey of Consumer Expectations. Median year-ahead expected price changes decreased by 0.6 pp to 4.2% for gas and were unchanged at 5.5% for food. In contrast, price changes increased by 0.1 pp to 9.3% for the cost of medical care, by 0.1 pp to 7.6% for the cost of college education, and by 0.9 pp to 7.7% for rent. Median home price growth expectations were unchanged at 3%, just below its 12-month trailing average of 3.1%. Meanwhile, expectations for the three-year and five-year horizons were also steady at 3.3% and 3% respectively. Elsewhere, earnings growth expectations remained unchanged at 2.6%, unemployment expectations rose by 1.4 pp to 45.3%, its highest reading since April 2020 and expected growth in household income declined by 0.1 pp to 3%.

Gold rose to $4,120 an ounce on Monday, its highest level since October 21, as falling oil prices eased inflation concerns, while investors awaited US CPI and PPI data this week for clues on the Fed’s policy outlook. The gain follows a 5% rally last week after Democrats won control of both chambers of Congress in the US midterm elections, raising hopes for an end to the US-Israeli war with Iran. Oil prices fell sharply on Monday after US President Donald Trump downplayed the likelihood of further strikes against Iran. Gold’s gains came despite a stronger-than-expected US employment report released on Friday, which reinforced expectations of higher interest rates for longer, supporting the dollar and Treasury yields. Markets currently price in an 81% probability of a Fed rate hike in December, according to CME FedWatch. Meanwhile, China’s central bank purchased 25.8 metric tons of gold in October, its largest monthly addition in three years, according to World Gold Council data.

Mexico’s annual inflation rate rose for the third month to 3.75% in October 2026, the highest level since May, up from September's 3.45%. The reading overshot market expectations of 3.65% and moved further above Banxico’s 3% target. Price increases were broad-based, with food and non-alcoholic beverages (3.55% vs 2.55% in September), of which fruit and vegetables (13.19% vs 8.78%) and housing & utilities (3.60% vs 3.33%) among the key contributors. Additional upward pressure also came from alcoholic beverages & tobacco (7% vs 7.31%); insurance & financial services (7.55% vs 5.88%) and restaurants & hotels (6.20% vs 6.19%). The core inflation edged up to 3.80% from 3.75% in September, broadly in line with forecasts of 3.78%. Monthly, the CPI rose by 0.65%, up from 0.42% in September and above market expectations of 0.55%. Fruit and vegetable prices grew by 2.35%, while energy prices and government-regulated tariffs rose by 2.13%, partly due to the end of summer electricity subsidies.

Germany’s exports rose 2% month-on-month to a record €141.1 billion in September 2026, following an upwardly revised 0.4% fall in the previous month and beating market expectations of a 0.5% gain. This was the fastest increase since February, driven mainly by a 3.5% rise in shipments to EU member states, which reached €80.8 billion. Exports to the euro area went up 2.4% to €55.8 billion, while shipments to the non-euro area increased 6.1% to €25 billion. Meanwhile, shipments to third countries edged up 0.1% to €60.3 billion, although exports to the US (-0.5%), China (-5.2%), and the UK (-4.7%) declined. On a yearly basis, German exports increased 7.7% in September. Over the January-September period, exports totaled €1,234.3 billion, up 4.3% from the same period a year earlier.