SKILLO42

YESTERDAY I WARNED ABOUT WHAT COULD HAPPEN AFTER THE US MIDTERMS. NOW LOOK WHAT'S HAPPENING IN THE MIDDLE EAST. Saudi Arabia has come under attack. The US is pulling diplomatic personnel out. And oil has just surged above $111 a barrel. I think something VERY significant is developing here. Let me explain. We've got 12 days until the US midterm elections. Brent crude: $111.64. WTI crude: $99.39. US inflation: 3.7%. And now Reuters is reporting that Iran-aligned Houthi forces have struck targets in Saudi Arabia, including an airport and an oilfield. People have been killed. Washington has ordered non-essential diplomatic personnel and their families to leave Saudi Arabia. Think about what's happening here. For weeks, markets have been trading on the possibility of a US-Iran peace deal. Every positive headline has brought hopes of lower oil prices. Every setback has pushed energy prices back up. But something has changed. WE'RE NO LONGER JUST TALKING ABOUT THE STRAIT OF HORMUZ. We're talking about attacks on infrastructure inside one of the world's largest oil-producing countries. And that's a potentially MUCH bigger problem for energy markets. Because even if Washington and Tehran eventually reach an agreement, what happens if attacks on infrastructure and shipping continue elsewhere in the region? A peace agreement doesn't automatically remove every risk to global energy supplies. Now, here's where this gets interesting. Donald Trump has an election in 12 days. Iran knows the political pressure he's under. Reuters has already reported that Iranian officials see prolonging negotiations as a way of weakening Trump politically. And now we've got another escalation involving Saudi Arabia. The political clock is ticking. But I want to take this one step further. Because I think the BOND MARKET could be where the next major signal comes from. Remember what happened recently? US inflation came in at 3.7%. Treasury yields initially surged. The dollar rallied. Then something fascinating happened. Investors started buying US government bonds. Treasury yields reversed lower. Why.... Because inflation wasn't the only concern anymore. Investors were becoming increasingly worried about economic growth and what sustained high interest rates could do to the wider economy. Now throw another potential energy shock into that equation. If oil keeps climbing, inflation expectations could rise again. That creates more pressure on the Federal Reserve to keep monetary policy restrictive. Potentially supporting Treasury yields and the dollar. But there's another scenario. What if the escalation becomes so serious that investors start worrying MORE about economic damage than inflation? Equities come under pressure. Capital moves towards safer assets. Treasury demand increases. Bond prices rise. Yields FALL. And suddenly the market reaction looks completely different. That's what I think traders need to understand. THE SAME OIL SHOCK CAN PRODUCE VERY DIFFERENT MOVES IN THE DOLLAR, GOLD AND TREASURY YIELDS. It depends on what investors are most concerned about. I've spent 18 years following these markets, and I can tell you that understanding this distinction is incredibly important. Now here's my bigger concern. We're approaching November the 3rd. And instead of seeing a clear path towards de-escalation, we're now seeing attacks involving Saudi Arabia and the withdrawal of US diplomatic personnel. What happens if we reach the midterms without a peace deal? And what happens if the political calculations change AFTER the election? I'm watching three things very closely. OIL. TREASURY YIELDS. THE US DOLLAR. If oil continues higher and yields start climbing aggressively, renewed inflation fears could be taking control. If oil rises but yields keep falling, the market may be telling us something much more concerning about economic growth. And if negotiations suddenly produce a credible agreement, we could see a very sharp reversal in some of these moves. But here's my biggest thought. THE MARKET ISN'T JUST PRICING THE POSSIBILITY OF PEACE ANYMORE. IT'S HAVING TO PRICE THE RISK OF A WIDER REGIONAL ENERGY CRISIS. And with the US midterms just 12 days away, the timing could hardly be more significant. I don't think traders should underestimate what's developing here. Bookmark this. Because the next major move in oil, bonds and the dollar could tell us far more than the political headlines. And I want to ask you something.... Can Trump realistically deliver lower oil prices before November the 3rd while the conflict continues spreading across the region?

UK CPI Day + Brent at $110 | LIVE Trading GBPUSD, Oil, Gold | London Session w/ Ken & Joel teapawt.net/i/broadcasts/1vJpPNbDA…

US INFLATION JUST CAME IN HOT. SO WHY ARE BOND YIELDS COLLAPSING? This is where things get REALLY interesting. Yesterday, US inflation hit 3.7%, above the 3.6% expected. Gasoline prices surged 9.1% in September, accounting for over HALF the monthly inflation increase. The initial reaction made perfect sense. Dollar UP. Treasury yields UP. Rate hike expectations UP. The US 10-year yield briefly reached around 5.33%. Fast-forward to this morning. That same yield has fallen towards 5.09%. That's roughly a 24-basis-point reversal. Yet nothing about yesterday's inflation report has changed. So what's going on? The market has moved from worrying about INFLATION to worrying about what that inflation could BREAK. Think about it. Higher inflation raises the risk of more Fed tightening. Higher rates mean higher borrowing costs. And that's particularly dangerous for heavily indebted companies relying on cheap financing to fund growth. Look at the AI trade. CoreWeave plunged around 16% yesterday. Oracle and other AI-linked names were hammered. The Nasdaq lost almost 2%. Suddenly, the market wasn't just repricing interest rates. It was repricing RISK. And when investors start reducing exposure to risky assets, where can some of that money go? US Treasuries. More demand for bonds pushes their prices HIGHER and their yields LOWER. Meanwhile, Fed officials have pushed back against the urgency of another immediate hike, helping cool expectations for October. That's the important distinction. Yesterday's inflation data was the catalyst. But the subsequent sell-off in risk assets became a bigger driver of Treasury demand. And here's what traders need to understand: FALLING YIELDS DO NOT AUTOMATICALLY MEAN FALLING INFLATION. Sometimes yields fall because the economy looks healthier. Sometimes they fall because investors are getting nervous about what comes next. Those are two VERY different environments for stocks, currencies and gold. The market isn't necessarily telling you inflation has been defeated. It may be telling you that the cost of fighting inflation is starting to matter more than the inflation print itself. That's the shift I'm watching.

London Session LIVE! | E8 Markets | Oct 14, 2026 | Ken Chigbo & Joel teapawt.net/i/broadcasts/1NGaroNoA…

JAPAN HAS A SERIOUS CURRENCY PROBLEM. And today’s inflation figures tell you exactly why. Look at these numbers. Japanese wholesale prices: +6.8%. Import prices in yen terms: +24.5%. Imported petroleum, coal and natural gas prices: +43.6%. That’s in ONE YEAR. Meanwhile? The Bank of Japan has already raised interest rates to 1.25%. The highest level in 31 YEARS. Now think about what this actually means. Japan is heavily dependent on imported energy and raw materials. When the yen weakens, those imports become more expensive in local currency terms. Businesses face higher costs. Some pass those costs on to consumers. And suddenly the Bank of Japan finds itself dealing with inflationary pressure that a weak currency is helping to sustain. But here’s where FX traders need to pay attention. The Fed is sitting at 3.75–4.00%. Japan is at 1.25%. That’s still a 250–275 basis point policy rate differential. And that matters. Because even after Japan’s rate hikes, the dollar still offers a substantial interest rate advantage. This is why simply saying the BOJ is hiking, BUY YEN is far too simplistic. Currency markets don’t work like that. But there’s another side to this trade. What happens if the BOJ is forced to tighten further? What happens if US policy expectations start shifting in the opposite direction? That interest rate differential begins narrowing. And suddenly, traders positioned for continued yen weakness have a different calculation to make. Especially if price action starts confirming the change. Because the same carry trade that looks attractive when interest rate differentials are wide can become extremely uncomfortable when those expectations start reversing. Now, I’m not suggesting a massive yen rally is guaranteed. The dollar remains supported by its own fundamentals. But the pressure building in Japan is worth taking seriously. Wednesday brings US CPI. And the BOJ meets again on 29–30 October. For me, the interesting question is whether Japan’s imported inflation problem eventually forces a more aggressive policy response than FX markets currently expect. Watch USD/JPY. Watch AUD/JPY. Watch the relative yield differentials. Because when those relationships start changing, some of the biggest opportunities in FX can emerge. And some of the most crowded trades can suddenly become very expensive to hold.