Daily Financial Breakfast 3 November 2026: 4.85% RBA Rate After Hike; US Strike on Qeshm Reported by WSJ

Market News Today: Major Developments at a Glance

• Monday brought a United States strike on Iran’s Qeshm Island, The Wall Street Journal reported. Iran said contacts aimed at ending the conflict were continuing.
• 4.85% is the Reserve Bank of Australia’s new cash rate following a 25 basis point increase approved by a 6-3 vote. Governor Michele Bullock said policy options remained open.
• Half of the ECB’s Executive Board is involved in a leadership reshuffle accelerated by Christine Lagarde’s planned early exit, Standard Chartered said.
• $800 billion is the U.S. Treasury’s estimated first-quarter borrowing requirement, against $618 billion in the fourth quarter, according to Danske Research.
• 55.5 was the October reading for the U.S. ISM manufacturing index, up from September’s 54.5 and above the 54.5 consensus forecast.
• $95.30 was the approximate level reached by WTI as it rebounded from Monday’s sell-off. TD Securities said Middle East oil flows had recovered even as onshore inventories declined.
• $6.3 billion was the size of the Binance exploit that U.S. allegations linked to North Korean hackers, a claim North Korea rejected. Binance said it had fully replenished the affected assets.
• $388 million in losses from Bitget’s September hack were absorbed by the exchange, CEO Gracy Chen said. She also outlined an overhaul of security controls.
• Following President Lula’s re-election, Brazilian equities and the real declined, according to HSBC. The bank also drew attention to opposition gains in Congress.

Markets in Focus

Currency Market Moves

0.25% was the decline in AUD/USD following the RBA decision. The pair moved to near 0.6975. AUD/JPY slipped to around 110.20, and AUD/NZD extended its decline into a second successive day, reaching around 1.2430. After trading near 0.8345 earlier, EUR/GBP stood around 0.8336, down 0.11%. GBP/USD was broadly unchanged around 1.3410 during European trading, having dipped to near 1.3405 in the Asian session. In Asian trading, the U.S. Dollar Index remained near 101.80 after modest losses the day before.

Geopolitical Briefing

Qeshm Island Strike: WSJ Reports U.S. Attack on Iran

Citing U.S. officials, The Wall Street Journal reported that the United States struck Iran’s Qeshm Island near the Strait of Hormuz on Monday. According to the newspaper, this was the latest of several limited attacks Washington had carried out secretly against Iran over recent weeks.

Alongside the military operations, diplomatic exchanges remained active. Reuters reported on Monday that Iran said talks with the United States to end their eight-month conflict were continuing. Negotiations involving Iranian officials and Qatari mediators over several days yielded revised proposals, but no major breakthrough.

Monetary Policy Briefing

4.85% Cash Rate: RBA Delivers Increase in Divided Vote

4.85% is the Reserve Bank of Australia’s cash rate after its fifth increase this year. On 3 November, the bank raised the rate by 25 basis points from 4.6%. With inflation still above target, the decision matched market consensus and secured approval in a 6-3 vote.

For the first time since June, the statement excluded a reference to possible further rate increases. Francesco Pesole of ING said the economic outlook had been revised sharply downwards. Falling house prices were weighing on consumers, while unemployment faced upside risks. Governor Michele Bullock told her press conference that earlier monetary tightening had yet to work its way through the economy.

Despite the change in wording, Bullock dismissed the suggestion that rate increases had ended. According to Nicholas Chia of Standard Chartered, she said the RBA was “preserving our options”. Upside inflation risks remained in the statement, which also recognised capacity pressures as tighter than previously assessed. Bullock added that both the non-accelerating inflation rate of unemployment and the neutral interest rate had increased, but supplied no estimates.

Nine-Month Early Exit: Standard Chartered Sees Faster ECB Reshuffle

Nine months ahead of schedule is when Christine Lagarde plans to leave the European Central Bank presidency. Her announcement has brought forward a wider leadership transition, according to Christopher Graham of Standard Chartered. Replacements are needed for half of the Executive Board, including Isabel Schnabel and Philip Lane.

Among the possible successors to the presidency, Graham considered former Dutch central bank governor Klaas Knot and Pablo Hernandez de Cos. He said the appointments mattered for policy beyond a straightforward hawk-dove classification, and that the other board selections were also significant. These succession possibilities remain prospective, not confirmed appointments.

U.S. Fiscal & Economic Indicators

$800 Billion: U.S. First-Quarter Borrowing Estimate

$800 billion is the U.S. Treasury’s first-quarter borrowing estimate. That compares with $618 billion for the fourth quarter, according to Danske Research’s account of the quarterly refunding estimates. The target cash balance at the end of the first quarter was set at $1,000 billion.

A slightly higher-than-expected opening cash balance led to a $10 billion reduction in the fourth-quarter borrowing estimate. The year-end cash balance target was held at $850 billion.

55.5: U.S. ISM Manufacturing Index Beats Consensus

55.5 was the October reading for the U.S. ISM manufacturing index. It rose from 54.5 in September, exceeding consensus expectations for an unchanged reading of 54.5. Danske Research said new orders edged up while production recorded a notable increase.

Activity appeared softer in a separate indicator. Revised down from an initial 55.9 to 54.9, the S&P Global manufacturing PMI continued to signal expansion, although at a slower rate than both the previous month and the preliminary estimate.

Energy & Commodity Markets

$95.30: WTI Rebounds After Diplomacy-Led Sell-Off

$95.30 was the approximate price of West Texas Intermediate crude in early Asian trading on Tuesday. In the preceding session, it had touched $94.30, its lowest level since 16 October. Headlines about U.S.-Iran diplomacy reduced fears of further supply disruption, driving Monday’s decline of more than 5%; a subsequent account placed the drop at 6.50%.

Conditions in physical supply remained mixed. Ryan McKay of TD Securities said Middle East flows via the Strait of Hormuz, the Gulf of Oman and bypass pipelines had recovered to pre-war levels. The tanker shuttle trade around Oman, however, was still costly and dependent on continuous U.S. Navy support. Ship-to-ship transfers also extended loading and journey times.

A crude surplus nearing 2–3 million barrels a day was indicated by TD Securities’ high-frequency estimates. Most of the build-up was in oil on water, while onshore commercial stocks kept falling. For petroleum products, the bank estimated a deficit of more than 2 million barrels a day. McKay said elevated prices reflected stronger demand, tight product markets and supply risks linked to Houthi attacks on Saudi infrastructure and IRGC attacks on tankers.

Crypto Security Briefing

$6.3 Billion Binance Hack: North Korea Disputes U.S. Attribution

$6.3 billion was the value of the Binance exploit that U.S. allegations attributed to state-backed North Korean hackers. North Korea denied the allegations. The FBI linked the attack to North Korean hackers operating under the TraderTraitor cyber activity designation.

Describing the accusations as a political provocation, Kim Yo-jong, sister of North Korean leader Kim Jong-un, said they sought to depict the country as a cybercriminal state. The Korean Central News Agency carried her statement, which Yonhap reported late Monday. Binance said all affected assets had been replenished and a new zero-knowledge proof-of-reserves snapshot completed.

$388 Million Hack: Bitget CEO Outlines Security Changes

$388 million was the loss from Bitget’s September hack. CEO Gracy Chen said the exchange chose within hours to absorb it rather than transfer it to users. Speaking to FXStreet, she described small unauthorised transfers at the start of the attack, followed by larger withdrawals across multiple chains.

According to the exchange, its security systems spotted the anomalies and halted withdrawals within minutes. An internal investigation traced the issue to a vulnerability in a third-party security product that affected transaction authorisation. Private keys and cold wallets were not compromised. Bitget then reorganised access to sensitive systems, added layered approvals for critical operations and strengthened monitoring.

The breach occurred against a backdrop of broader industry losses. CertiK estimated cryptocurrency security-breach losses for 2026 at approximately $8.65 billion to $8.98 billion.

Regional Politics Briefing

Brazilian Assets Fall After Lula Re-Election, HSBC Says

Following President Lula’s unexpected second-round election win, Brazilian equity indices dropped sharply and the real weakened against the U.S. dollar, HSBC strategists said. In the bank’s assessment, Brazilian assets underwent a significant repricing.

Opposition gains in Congress were another focus for HSBC. The bank argued that the resulting political split made restoring fiscal credibility more difficult and sustained an elevated fiscal risk premium for the country.

Key Events Ahead

• U.S. Midterm Election Vote (3 November 2026): United States: Tuesday is the scheduled day for midterm voting. According to Danske Research, tentative results were expected on Wednesday morning, but final outcomes could require weeks or longer.
• Bank of England Policy Decision: United Kingdom: The next Bank of England interest-rate decision is still ahead.