TMGM Daily Market Breakfast: The Market Briefing for 22 October 2026

Markets Rise and Retreat in Morning Trading

• Above $99 for WTI crude and $110 a barrel for Brent, oil prices rose in the wake of attacks on Saudi Arabia as Iran warned that its response could widen to U.S. bases.
• A 25-basis-point repo-rate increase accompanied the RBI’s shift to calibrated tightening, its October minutes showed, with inflation pressures and firm growth cited by policymakers.
• Third-quarter underlying inflation could exceed expectations, RBA Deputy Governor Andrew Hauser warned, with the bank’s 3 November policy meeting ahead.
• At 3.5%, UK inflation had picked up on higher energy prices, while markets put the likelihood of a November Bank of England rate rise at 95%.
• The 5% threshold was surpassed by France’s 10-year government bond yield for the first time since 2002.
• Inflation risks drew attention from a Bank of Japan deputy after this year’s two rate rises lifted the policy rate to 1.25% in September.
• Thursday’s fall took gold below $4,100, following Wednesday’s rebound above $4,130.
• Wednesday’s loss of more than 1.49% against the U.S. dollar marked a second consecutive day of weakness for the Mexican peso.

Gold and Peso Lose Ground

Gold Falls Below $4,100

Thursday brought gold below $4,100, even with the U.S. dollar weakening and U.S. Treasury yields declining. Wednesday had seen a recovery above $4,130: oil prices fell that day after the United States authorised the offloading of cargo from some blocked vessels.

Mexican Peso Extends Losses

Against the backdrop of the U.S.-Iran conflict, Wednesday’s fall of more than 1.49% against the U.S. dollar left the Mexican peso lower for a second consecutive day.

Geopolitical Tensions Shape & Energy Trading

Saudi Attacks Lift Oil as Iran Threatens Broader Response Against U.S.

An initial rebound to around $97.70 halted WTI crude’s three-day run of losses before Thursday’s advance took it above $99 a barrel. Fresh attacks on Saudi Arabia brought Brent above $110 a barrel again. A drone strike on Saudi Aramco’s Shaybah oilfield caused two casualties. Reporting further attacks, ING analysts Warren Patterson and Ewa Manthey cited strikes on Dammam’s international airport and the targeting of an oil-processing plant.

Should Washington continue urging vessels through a mined waterway, Iran’s Islamic Revolutionary Guard Corps navy warned that its response could reach U.S. bases in the region, according to Reuters. Seven vessels had been hit, the IRGC added. Bloomberg separately reported on Wednesday that Iranian Foreign Minister Abbas Araghchi said Washington must end its naval blockade and demonstrate a serious intention to bring the war to a diplomatic conclusion.

The conflict had not prevented substantial physical crude flows from Kuwait. ING cited Kuwait Petroleum Corp’s chief executive as saying that exports were as high as before the war, with output exceeding 2 million barrels a day. The executive said shipping refined products posed greater difficulties.

A 3.06 million-barrel fall in commercial crude inventories over the latest week came alongside a 300,000-barrel reduction in Strategic Petroleum Reserves, according to U.S. Energy Information Administration figures cited by ING. With hurricane activity in the U.S. Gulf of Mexico still affecting the data, estimated U.S. oil output was down by 410,000 barrels a day on the previous week.

Economic Conditions Guide & Central Bank Policy

RBI Raises Repo Rate by 25 Basis Points as Minutes Record Calibrated Tightening

Inflation pressures were rising while growth remained firm, prompting Reserve Bank of India policymakers to raise the repo rate by 25 basis points and adopt “calibrated tightening”, according to DBS economist Radhika Rao’s account of the October meeting minutes. Signs of inflation becoming more generalised were beginning to emerge, Governor Malhotra noted.

Members disagreed over the scale of further tightening. According to Rao, two external members stood out as the most hawkish, stressing the breadth of inflation risks and the need to act pre-emptively. Incremental rises had the backing of two other members, who nevertheless explicitly opposed signalling a protracted tightening cycle.

This month’s rise of around 1.5% in the rupee against the U.S. dollar came as Indian government bond yields remained high. Rao attributed the currency’s gains to foreign-exchange regulatory measures, IPO inflows and closer scrutiny of overseas investments. Elevated foreign-exchange forward premiums also persisted.

RBA’s Hauser Flags Potential Overshoot in Underlying Inflation

Wednesday’s comments from RBA Deputy Governor Andrew Hauser raised the possibility that third-quarter underlying inflation, on the trimmed-mean measure, could exceed expectations. They came after Assistant Governor Christopher Kent said on Monday that several factors pointed towards higher neutral interest rates, both in Australia and worldwide.

Four consecutive days of gains culminated in a one-month high for the Australian dollar on Wednesday. In the afternoon, AUD/USD was quoted at around 0.7025, up 0.42%; a later update recorded 0.7027, up 0.44%. The pair then retreated to around 0.7015 during early Asian trading on Thursday.

Energy Costs Push UK Inflation to 3.5%; Markets Price 95% Chance of November BoE Rise

Higher energy prices took UK inflation to 3.5%, with the market-implied likelihood of a November Bank of England rate rise reaching 95%. On Wednesday, geopolitical tensions lent support to the U.S. dollar, hampering further sterling gains and keeping GBP/USD below 1.3400.

Evidence of the energy shock spreading to other elements of the inflation basket was still scant, ING economist James Smith said. Separating the energy-driven rise in headline inflation from broader second-round effects, he also pointed to economic growth that had held up better than feared and a stabilising jobs market.

French 10-Year Government Bond Yield Breaks Above 5% for First Time Since 2002

Not since 2002 had France’s 10-year government bond yield exceeded 5%, a threshold it crossed on Wednesday. Trading just under 1.1250 against the U.S. dollar, EUR/USD reflected little reaction from the euro.

BoJ Deputy Warns of Inflation Risks Following Rise in Policy Rate to 1.25%

Inflation risks were highlighted by a Bank of Japan deputy as the yen held broadly steady near 158.00 per U.S. dollar. Despite core inflation undershooting the bank’s 2% target throughout the seven months through August, two policy-rate rises this year had lifted the rate to 1.25% in September.

RBA Meeting Leads the Upcoming Calendar

• Reserve Bank of Australia Prepares for Monetary Policy Meeting — 3 November 2026: The next monetary policy meeting of Australia’s central bank is due to take place.