This Week in Markets: Fed Decision, Big Tech Earnings and Oil Prices - 26.10.2026

The Australian dollar is trading near 0.7030 US dollars. Economists expect prices to rise 1.3% for the quarter and 3.9% over the year. Markets give better than a 60% chance that the Reserve Bank of Australia raises rates again on November 3. A higher inflation number would raise those odds and support the Australian dollar. The China dispute is a risk, because the Australian dollar falls when China–US tensions rise.

One euro buys about 0.837 pounds, close to the lowest level of the year. The pound is strong because markets see a 93.5% chance that the Bank of England raises its rate to 4.00% on November 5, and the euro is weak because of French government budget worries. The UK Budget on Wednesday is the main risk for the pound. If it raises doubts about UK government borrowing, the pound could fall. The ECB decision on Thursday is important as well.

The euro is trading near 1.12 dollars, dropped from 1.1699 in August. The euro is weaker because Europe depends on imported energy and oil is expensive, French finances are a worry, and US interest rates are high. The ECB is expected to keep its rate at 2.50% on Thursday. The euro could fall further if the ECB president, Christine Lagarde, does not signal a rate rise in December. 

One dollar buys about 156.9 yen. Yen has held steady because investors buy it when they are worried about growth. Bank of Japan raised its rate to 1.25% in September and is expected to keep it there. A hint of a December increase could strengthen the yen. A hint that the Fed will keep raising rates could weaken it again.

ASX 200 ended Friday at 8,795.2. On Monday it fell early but recovered to close 0.2% higher at about 8,810. Banks are the key group this week, because they react strongly to interest rate expectations. A high inflation number on Wednesday would increase the chance of a rate rise and could pressure bank shares. 

Dow fell 1.2% on Friday to 52,215.16. It still had its third weekly gain in a row. The Dow holds up better than the Nasdaq - fewer technology stocks. Friday’s fall shows that oil prices are now hurting other parts of the market. Boeing, Caterpillar, Visa and Coca-Cola report earnings this week. 

The index fell 0.3% on Friday to 10,690.36 and lost 1.8% for the week. UK retail sales fell more than expected, and consumer confidence dropped. Energy companies in the index benefit from high oil prices, but weak UK consumers are a concern. The Budget on Wednesday is the main event for UK shares.

Nasdaq fell 0.2% on Friday to 25,955.34. This was its second weekly loss in a row. Worries about how AI spending is paid for have caused much of the decline. Chip stocks steadied on Friday after a sharp fall on Thursday. Results from Alphabet, Microsoft and Amazon will decide the direction. Large technology companies are expected to spend about $800 billion on data centers this year. 

The Nikkei closed Friday at 62,693, it is well below its June record, and it fell sharply on October 22 when technology shares dropped. Japanese technology shares closely follow US AI stocks, so this week’s US earnings will play their role. The Bank of Japan decision on Friday is the other main event.

The index fell 0.5% on Friday to 7,623.68. The decline was broad, three of every four stocks in the index fell. Excluding AI-related stocks, the index has risen about 6.6% in October, while the full index is slightly down. Company profits remain strong, with third-quarter earnings on track to grow more than 32%. The index may be volatile around Wednesday’s Fed decision and the technology earnings. 

Brent settled Friday at $116.72, its highest close since April 29. It rose about 6% for the week. Saudi Aramco ordered its headquarters in Dhahran to be evacuated as fighting grew between Saudi Arabia and the Houthis. Brent fell on Monday but is still above $110. Traders worry mainly about attacks on Saudi oil facilities and about the Strait of Hormuz, which carries a large share of the world’s oil. Any new US strike on Iran would likely push prices higher. Any real progress in talks could push them lower. 

US WTI crude settled Friday at $103.27. The US Strategic Petroleum Reserve is at its lowest level since 1982. This leaves the US with less backup supply if disruptions get worse. WTI fell to near $101 on Monday after Trump ruled out an immediate attack. Oil above $100 is raising inflation fears, which is keeping interest rates high.

Bitcoin fell below $80,000 on Monday, it had traded between $80,000 and $86,000 for nearly two weeks. If Bitcoin falls below $79,000, the next level to watch is about $76,000. If it holds above $80,000, a move toward $82,500 to $85,000 is possible. The Fed decision on Wednesday is the main event. 

Ethereum is trading near $2,315, and it is weaker than Bitcoin. Funds that hold Ethereum have lost about $350 million over the past seven days, which shows investors are selling. Ethereum is down about 12% over the past month. A hawkish message from the Fed could push it lower, and a calmer message could help it recover toward $2,500.