TMGM Daily Market Breakfast Covers 20 October 2026

Morning Markets: Oil Advances as Maritime Risks Grow

• A 2.5% rise took WTI crude towards $100.50 a barrel, a level last seen over a month ago, against a backdrop of Iranian threats to extend its maritime blockade.
• Third-quarter GDP growth of 4.5% year-on-year in China surpassed expectations; separately, RBA Assistant Governor Christopher Kent pointed to reasonable signs that neutral interest rates were increasing.
• An October policy meeting with no change in interest rates but a higher inflation forecast was planned by the Bank of Japan, Reuters reported.
• Against a backdrop of protests and looting, yields on French 10-year government bonds climbed 13 basis points, Rabobank said.
• The rupiah extended its gains to a second consecutive day while Bank Indonesia reinforced currency-stabilisation efforts in line with a directive from President Prabowo Subianto.

Markets Record Gains in Oil and French Yields

Crude Prices Move Higher

Near $100.50 a barrel on Tuesday, WTI futures were 2.5% higher and at levels not reached for over a month. Earlier prices had been around $98.40 during Asian trading and $99.15 at the start of the European session. ING reported ICE Brent at around $110 a barrel.

AUD/USD Rises as USD/IDR Extends Decline

With a daily increase of 0.51%, AUD/USD stood around 0.6980 on Monday. Tuesday’s Asian trading saw USD/IDR slip towards 18,040, its second consecutive day of losses.

French Government Bond Yields Outpace Peers

France’s 13 basis point increase in 10-year yields on Monday compared with rises of 8 basis points for Italy and 3 basis points for Germany, according to Joe DeLaura and Florence Schmit, strategists at Rabobank.

Energy Markets Face Geopolitical Risks & Maritime Tensions Persist

Oil Reaches Monthly High Alongside Iran’s Threat to Expand Blockade

Tehran Times reported on Monday that Iran’s Islamic Revolutionary Guard Corps had said the Strait of Hormuz was not completely closed, and that Tehran could extend the blockade to the Bab al-Mandeb Strait and the Suez Canal. In a separate report, Rabobank relayed a claim from Iran that two tankers carrying up to 4 million barrels of crude had been hit by marine mines. Independent confirmation of the claim was lacking.

Monday brought pronounced swings in oil prices, with WTI recovering from a session low just above $96.50 to just above $99.00 as unconfirmed reports emerged of further US strikes on Iran. Prices had initially fallen after President Donald Trump waived Graham Act sanctions and tariffs on Russian energy. The waiver became known after markets closed on Friday. In its update on Monday, Rabobank reported a fall of $1.80 a barrel in active Brent futures at that point.

Relatively robust Persian Gulf oil flows had continued despite the tensions, said Warren Patterson and Ewa Manthey, strategists at ING. Yet developments in the Middle East had impaired the efficiency of vessel use, driving tanker freight rates to record levels. According to the strategists, the United States was considering allowing sanctioned tankers to be sold, expanding capacity available to the legitimate shipping market. Neither the amount of additional capacity nor its timing was certain.

September figures for Chinese oil production and refining provided further evidence on physical demand. Domestic crude production reached 4.45 million barrels a day following increases of 0.6% month-on-month and 2.5% year-on-year. Refinery throughput, at a little over 14 million barrels a day, was the highest since March: 0.4% above August but 8.4% below the level a year earlier.

ING used the production and refining figures together with trade data to estimate a September reduction in China’s crude stocks of 16 million barrels, equivalent to a little more than 500,000 barrels a day. The bank’s calculation of apparent demand came to 12.75 million barrels a day, lower by 2.7% month-on-month and 15.2% year-on-year.

Economic Growth Developments & Central Bank Policy Outlook

China Growth Picks Up; RBA’s Kent Flags Signs of Rising Neutral Rates

A 4.5% year-on-year expansion in China’s third-quarter economy exceeded market forecasts, improving on the preceding quarter’s 4.3% growth. For Australia, China represents both its largest trading partner and a significant source of demand for commodity exports such as iron ore.

Reasonable signs of an increase in neutral interest rates were evident in Australia and worldwide, according to RBA Assistant Governor Christopher Kent. An interest rate is neutral when monetary policy provides neither stimulus nor restraint to economic activity.

Bank of Japan Set to Hold Rates and Raise October Inflation Forecast, Reuters Says

Four sources familiar with the Bank of Japan’s thinking told Reuters that the central bank planned an unchanged interest rate and an increased inflation forecast at its October policy meeting. This account relates to deliberations on policy; no decision has been announced.

French Borrowing Costs Rise Sharply Alongside Civil Unrest

As protests and looting unfolded in France, authorities were weighing the introduction of curfews, said Joe DeLaura and Florence Schmit of Rabobank. The strategists also reported unrest in Belgium and Italy, which followed peaceful protests earlier in Spain and Portugal.

A potential French need for assistance led the strategists to question the European Central Bank’s response. They framed the policy choice as a dilemma between intervening and the risks to economic, political and financial stability across the wider EU. Their discussion assessed possible policy responses and did not constitute an announcement of ECB action.

Bank Indonesia Reinforces Its Push to Stabilise the Rupiah

A directive issued by President Prabowo Subianto led Bank Indonesia to strengthen its rupiah-stabilisation efforts. Alongside that increased effort, the currency extended its gains into a second consecutive day.