22 October 2026: TMGM Daily Market Breakfast

Morning Market Brief

• WTI crude moved above $99. Brent also traded above $110 a barrel after attacks on Saudi Arabia, as Iran warned of a broader response targeting U.S. bases.
• A 25-basis-point repo-rate rise and a move towards calibrated tightening featured in the RBI’s October minutes, as policymakers pointed to inflationary pressures and robust growth.
• Ahead of the RBA’s 3 November policy meeting, Deputy Governor Andrew Hauser cautioned that underlying inflation for the third quarter could come in above expectations.
• Higher energy prices pushed UK inflation up to 3.5%. Markets priced a 95% probability of a November interest-rate increase by the Bank of England.
• For the first time since 2002, the yield on France’s 10-year government bond moved above 5%.
• Following two rate rises this year that lifted the policy rate to 1.25% in September, a Bank of Japan deputy drew attention to inflation risks.
• After recovering above $4,130 on Wednesday, gold dropped below $4,100 on Thursday.
• Wednesday brought a second consecutive daily decline for the Mexican peso, which shed more than 1.49% against the U.S. dollar.

Market Moves

Below $4,100: Gold

Despite a weaker U.S. dollar and lower U.S. Treasury yields, gold dropped below $4,100 on Thursday. It had recovered above $4,130 on Wednesday as oil prices fell following U.S. authorisation for cargo to be offloaded from some blocked vessels.

Over 1.49% Lower: Mexican Peso

Against the backdrop of the U.S.-Iran conflict, Wednesday marked the Mexican peso’s second consecutive daily fall. The currency declined more than 1.49% against the U.S. dollar.

Geopolitical Risks & Energy Markets

Above $99: WTI Rises After Saudi Attacks; Iran Warns U.S. of Broader Response

On Thursday, WTI crude advanced beyond $99 a barrel, building on an earlier recovery to around $97.70 that had broken a three-day losing streak. Renewed attacks on Saudi Arabia also took Brent back above $110 a barrel. Two casualties resulted from a drone attack on Saudi Aramco’s Shaybah oilfield. ING analysts Warren Patterson and Ewa Manthey additionally reported strikes on Dammam’s international airport and said an oil-processing plant had been targeted.

According to Reuters, Iran’s Islamic Revolutionary Guard Corps navy warned that U.S. bases in the region could face a response if Washington kept encouraging vessels to pass through a mined waterway. Seven vessels had been hit, the IRGC also said. In a separate report on Wednesday, Bloomberg cited Iranian Foreign Minister Abbas Araghchi as saying that Washington must remove its naval blockade and show it was serious about a diplomatic end to the war.

Despite the conflict, substantial volumes of physical crude continued to flow from Kuwait. According to ING, the chief executive of Kuwait Petroleum Corp said crude exports matched pre-war levels, with production exceeding 2 million barrels a day. Refined-product shipments presented greater difficulties, the executive said.

Commercial crude stocks declined by 3.06 million barrels in the latest week, while Strategic Petroleum Reserves fell by 300,000 barrels, according to U.S. Energy Information Administration data cited by ING. Estimated U.S. oil output was 410,000 barrels a day lower than the previous week. Hurricane activity in the U.S. Gulf of Mexico continued to affect the figures.

Economic Outlook & Monetary Policy

25-Basis-Point Rise: RBI Minutes Set Out Calibrated Tightening Shift

DBS economist Radhika Rao said the Reserve Bank of India’s October meeting minutes recorded a 25 basis point repo-rate increase and a shift to “calibrated tightening”. Policymakers cited mounting inflation pressures and robust growth. Emerging indications of more generalised inflation were highlighted by Governor Malhotra.

Members differed on how far tightening should go. In Rao’s assessment, two external members were the most hawkish, stressing wider inflation risks and the need for pre-emptive action. Another two backed gradual increases while explicitly opposing any signal of a prolonged tightening cycle.

While Indian government bond yields stayed high, the rupee gained around 1.5% against the U.S. dollar this month. Foreign-exchange regulatory measures, IPO inflows and closer scrutiny of overseas investments were behind the appreciation, according to Rao. Foreign-exchange forward premiums also stayed elevated.

Third-Quarter Inflation: RBA’s Hauser Flags Upside Risk

Underlying inflation on the trimmed-mean measure could surpass third-quarter expectations, RBA Deputy Governor Andrew Hauser said on Wednesday. Earlier, on Monday, Assistant Governor Christopher Kent had pointed to several factors indicating that neutral interest rates were moving higher both in Australia and globally.

A fourth consecutive day of gains took the Australian dollar to a one-month high on Wednesday. An afternoon update put AUD/USD around 0.7025, a rise of 0.42%; a subsequent update quoted 0.7027, up 0.44%. Early Asian trading on Thursday then saw the pair ease to around 0.7015.

3.5% UK Inflation: November BoE Hike Probability Reaches 95%

Energy costs drove UK inflation higher to 3.5%, with market pricing indicating a 95% chance of a November Bank of England rate rise. Geopolitical tensions underpinned the U.S. dollar on Wednesday, leaving sterling struggling to build on its gains as GBP/USD traded below 1.3400.

So far, evidence that the energy shock was feeding into other components of the inflation basket remained limited, according to ING economist James Smith. He distinguished the energy-driven increase in headline inflation from wider second-round effects. Smith also said economic growth had proved more resilient than feared and that the jobs market was stabilising.

Above 5%: French 10-Year Government Bond Yield at First Such Level Since 2002

Wednesday saw France’s 10-year government bond yield cross above 5%, a level not exceeded since 2002. With EUR/USD trading just below 1.1250, the euro’s response was muted.

1.25% Policy Rate: BoJ Deputy Flags Inflation Risks

The yen was largely steady near 158.00 per U.S. dollar as a Bank of Japan deputy drew attention to inflation risks. Two policy-rate increases this year took the rate to 1.25% in September. This came despite core inflation staying below the bank’s 2% target in every one of the seven months through August.

Key Events Ahead

• Reserve Bank of Australia Policy Meeting — 3 November 2026: The next monetary policy meeting of Australia’s central bank is scheduled for this date.