20 October 2026: TMGM Daily Market Breakfast

2.5% WTI Gain: Morning Market Brief

• WTI crude gained 2.5%. Prices approached $100.50 a barrel, the highest in over a month, as Iran threatened to widen its maritime blockade.
• At 4.5% year-on-year, China’s third-quarter GDP growth beat expectations. RBA Assistant Governor Christopher Kent, meanwhile, said reasonable signs pointed to an increase in neutral interest rates.
• An October interest-rate hold and an upward revision to the inflation forecast were planned by the Bank of Japan, Reuters reported.
• A 13 basis point increase in French 10-year government bond yields accompanied protests and looting, according to Rabobank.
• As the rupiah gained for a second consecutive day, Bank Indonesia stepped up currency-stabilisation measures under a directive from President Prabowo Subianto.

Key Market Moves

Oil Markets

WTI futures gained 2.5% on Tuesday. Trading near $100.50 a barrel, they reached their highest level in over a month, following levels around $98.40 in Asian trading and $99.15 early in the European session. According to ING, ICE Brent traded at around $110 a barrel.

Currency Markets

A 0.51% daily gain took AUD/USD to around 0.6980 on Monday. During Tuesday’s Asian session, USD/IDR fell to around 18,040, extending its decline into a second consecutive day.

European Sovereign Debt

A 13 basis point rise in French 10-year yields on Monday outpaced increases of 8 basis points in Italy and 3 basis points in Germany, according to Rabobank strategists Joe DeLaura and Florence Schmit.

Oil & Geopolitical Risks

Monthly Oil High as Iran Threatens Broader Maritime Blockade

Tehran could widen its blockade to the Bab al-Mandeb Strait and the Suez Canal, Iran’s Islamic Revolutionary Guard Corps said, according to Monday’s Tehran Times report. It also said the Strait of Hormuz had not been completely closed. In a separate account, Rabobank cited an Iranian claim that marine mines had hit two tankers carrying up to 4 million barrels of crude. That claim had not been independently confirmed.

Sharp reversals marked Monday’s oil session. Following unconfirmed reports of fresh U.S. strikes on Iran, WTI rose from a session low just above $96.50 to just above $99.00. The earlier decline came after President Donald Trump waived Graham Act sanctions and tariffs on Russian energy; that news emerged after Friday’s market close. At the time of Rabobank’s Monday update, active Brent futures were $1.80 a barrel lower.

Despite the tensions, oil flows from the Persian Gulf remained relatively strong, according to ING strategists Warren Patterson and Ewa Manthey. Tanker freight rates, however, had hit record levels as Middle East developments reduced the efficiency of vessel use. The strategists said the United States was considering permitting sales of sanctioned tankers to increase capacity in the legitimate shipping market. Both the capacity involved and the timing remained uncertain.

Further insight into physical oil demand came from China’s September production and refining data. At 4.45 million barrels a day, domestic crude output was 0.6% higher month-on-month and 2.5% higher year-on-year. Refinery throughput reached its highest level since March at a little over 14 million barrels a day. That represented a 0.4% increase from August but an 8.4% decline from a year earlier.

Using these figures alongside trade data, ING put China’s crude inventory drawdown at a little more than 500,000 barrels a day, equivalent to 16 million barrels over September. Its estimate of apparent demand was 12.75 million barrels a day, a decline of 2.7% month-on-month and 15.2% year-on-year.

Economic Data & Monetary Policy

4.5% China Growth; RBA’s Kent Sees Signs of Higher Neutral Rates

China recorded third-quarter growth of 4.5% year-on-year. The expansion beat market expectations and accelerated from 4.3% in the previous quarter. As Australia’s largest trading partner, China is also a major source of demand for Australian commodity exports, including iron ore.

Reasonable signs suggested neutral interest rates were moving higher both in Australia and globally, RBA Assistant Governor Christopher Kent said. At the neutral rate, monetary policy neither supports nor constrains economic activity.

October Rate Hold, Higher Inflation Forecast Planned by Bank of Japan: Reuters

Citing four sources familiar with the Bank of Japan’s thinking, Reuters reported plans to keep interest rates unchanged at the October policy meeting while lifting the inflation forecast. The report concerns policy deliberations, not an announced decision.

French Borrowing Costs Climb Sharply Amid Unrest

Amid protests and looting, curfews were under consideration by French authorities, according to Rabobank strategists Joe DeLaura and Florence Schmit. Their account also covered unrest in Belgium and Italy after earlier peaceful protests in Spain and Portugal.

If France needed assistance, how the European Central Bank would respond remained a question for the strategists. They outlined a policy dilemma between intervention and risks to broader EU economic, political and financial stability. This was their assessment of potential policy options, rather than an announcement of ECB action.

Rupiah Stabilisation Measures Intensified by Bank Indonesia

Acting on President Prabowo Subianto’s directive, Bank Indonesia increased its efforts to stabilise the rupiah. The stronger stabilisation push coincided with a second consecutive day of gains for the currency.