Oil, dollar rise as Houthis hit Riyadh airport again

Oil prices rose in early Asian trading on Monday, Oct. 12, after renewed Houthi attacks on Saudi Arabia raised fears that the Middle East conflict could spread. Brent crude gained 0.4% to $105.10 a barrel, and the dollar edged higher against major currencies, Bloomberg reported. The gains come at the start of a busy week. US September inflation data and an appearance by Federal Reserve Chair Kevin Warsh could show how far policymakers are willing to keep raising interest rates.straitstimes

Riyadh airport under fire

The Iran-aligned Houthis hit Riyadh's King Khalid International Airport again on Oct. 11, a day after a missile strike there killed at least 12 people, including an American. RFE/RL reported that Saudi authorities later put the Oct. 10 toll at 13 dead and 309 injured, and said the Oct. 11 strike killed one person and injured 11. After the deadly attack, President Donald Trump said US forces "may" join Saudi Arabia in fighting the militants. The Houthis have since repeated their warnings to airlines and travelers to stay away from Saudi airports and airspace.RadioFreeEurope/RadioLiberty+2

Aviation tracker Flightradar24 listed 606 flights to and from Riyadh as canceled on Oct. 11. The US Federal Aviation Administration told American airlines to use caution over Saudi Arabia, warning of threats "at all altitudes". Meanwhile, Saudi Arabia is backing a counteroffensive near Bab el-Mandeb, the strait south of the Red Sea that links Asia and Europe, where roughly 12% of the world's oil passes.RadioFreeEurope/RadioLiberty+2

The airport strike was the latest in a series. Houthi attacks on airports in Riyadh and Abha on Oct. 6 and 7 killed three civilians, according to Saudi Arabia's aviation regulator. On Oct. 8, Brent jumped more than 5%, The New York Times reported.Arabian Gulf Business Insight+1

Inflation and rates in focus

Analysts say more supply disruptions could push up inflation and strengthen the case for higher rates. Last week the 10-year Treasury yield approached 5.4%, its highest level since 2002, as Brent held above $100. Cash Treasury trading is closed on Monday for holidays in the US and Japan.straitstimes

"In quieter conditions, geopolitical headlines can often have an outsized impact," Nick Twidale, chief market analyst at AT Global Markets, wrote to clients. He added that this week's data and earnings will leave "plenty for markets to digest".straitstimes

Stocks have held up so far. S&P 500 futures rose after the index closed 0.6% higher on Oct. 9, and the index remains close to the record it set on Oct. 6. Bloomberg Intelligence expects third-quarter S&P 500 profits to grow about 25% from a year earlier.straitstimes

Dollar's winning streak

Last week the dollar posted its fourth straight weekly gain, its longest run since early 2025. Investors have bought it as a safe haven during the war with Iran and the run of high oil prices. The euro, weighed down by France's fiscal problems and high energy costs, touched its lowest level since May 2025.straitstimes

"The case for US dollar to break out of its 15-month range is increasingly compelling," Barclays ↗ 0.48% strategists led by Themistoklis Fiotakis wrote. They cautioned that "stretched long positioning could interrupt the rally in the near term".straitstimes