TMGM Daily Market Breakfast: 27 October 2026

Morning Snapshot

• WTI crude recovered above $101.00 per barrel on Tuesday as attacks on vessels attempting to cross the Strait of Hormuz continued despite regional diplomatic efforts.
• Japanese Finance Minister Satsuki Katayama said the government was prepared to take decisive steps in the foreign exchange market.
• UK Autumn Budget reporting points to £20.4 billion of additional investment through the National Wealth Fund and British Business Bank, according to Deutsche Bank economists.
• France’s fiscal and bond-market strains remained in focus, with the ECB’s policy rate at 2.50% following September’s 25-basis-point increase.
• The Saudi-led coalition said it intercepted and destroyed four Houthi drones targeting southern Saudi Arabia.
• Ripple CEO Brad Garlinghouse announced final OCC approval for the charter of Ripple National Trust Bank.
• Hyperliquid named Kraken parent Payward as its intended first CFTC-regulated deployer of perpetual futures markets on HIP-3, subject to regulatory approval.
• Standard Chartered raised its China current-account surplus forecasts to 4.0% of GDP for 2026 and 3.6% for 2027.

Market Developments

Foreign Exchange

The U.S. Dollar Index rose toward 102.00 on Monday. EUR/USD extended its decline to around 1.1170 early Tuesday, after reaching its lowest level since October 15 on Monday despite a better-than-forecast German Ifo survey. GBP/USD fell about 0.22% to 1.3342 on Monday and traded near 1.3335 early Tuesday; sterling nevertheless strengthened against the euro later Tuesday. USD/JPY rose from just above 156.50 to just above 157.50 on Monday and continued higher for a third consecutive session on Tuesday. AUD/USD slipped 0.26% to 0.7016 on Monday before recovering to around 0.7025 during Tuesday’s Asian session. USD/CAD snapped a seven-day losing streak on Monday and advanced for a second day to around 1.4020 on Tuesday.

Gold

Gold rose 0.6% on Monday and reclaimed $4,000 after finishing the previous week below that level. The metal retreated during Tuesday’s Asian session as the U.S. dollar firmed, but remained above $4,000.

Energy & Regional Security

WTI Recovers Above $101 as Hormuz Attacks Continue

WTI crude recovered above $101.00 per barrel on Tuesday, reversing an earlier decline to around $100.10 during Asian trading. The initial fall extended losses for a second consecutive day as renewed Middle East diplomacy raised hopes of preventing a wider escalation of the U.S.-Iran conflict.

The later recovery came as hopes of a peace deal faded and attacks continued on vessels attempting to cross the Strait of Hormuz. Diplomatic discussions nevertheless remained active: Iran, Saudi Arabia, Pakistan and Turkey agreed on Monday to continue security talks and enhance regional cooperation following high-level meetings in Tehran, Iranian broadcaster IRIB reported.

Government Policy & Central Banks

Japan Says It Is Prepared to Take Decisive FX Steps

Japanese Finance Minister Satsuki Katayama said on Tuesday that the government was prepared to take decisive steps in the foreign exchange market. She added that officials were monitoring market movements with heightened urgency, including at that moment.

The remarks expressed readiness to act rather than announcing an intervention.

UK Budget Reporting Points to £20.4 Billion Investment Expansion

Reporting by the Financial Times and The Times points to £20.4 billion of additional investment through the National Wealth Fund and British Business Bank, according to Deutsche Bank economists Sanjay Raja and Maui Brennan. The proposed expansion would be backloaded from 2028/29 and use public financial institutions to increase investment through financial transactions.

Deutsche Bank had previously assumed an £8 billion expansion in the Autumn Budget, followed by an equal increase in the following year’s Spending Review. The economists said the reported plans instead indicated roughly £20 billion of additional investment over five years.

Allowing for slightly higher HMRC savings, Deutsche Bank estimated that borrowing would increase by nearly £10 billion annually in the latter part of the Office for Budget Responsibility’s forecast horizon, with the gross financing requirement reaching just over £250 billion in 2030/31. Using OBR multipliers, the bank estimated a 0.5% addition to GDP by 2031/32. These are economists’ estimates based on reported plans, not announced Budget measures.

France’s Fiscal Strains Remain in Focus After ECB’s September Rate Increase

France’s fiscal difficulties and bond-market strains remained a focus for the euro area. Brown Brothers Harriman strategist Elias Haddad highlighted the French situation while noting that the ECB’s policy rate stood at 2.50% following a 25-basis-point increase in September.

Haddad said contained underlying euro-area inflation and tighter financial conditions gave policymakers scope to wait. France’s fiscal concerns also weighed on the euro against sterling on Tuesday.

Regional Security

Saudi-Led Coalition Reports Interception of Four Houthi Drones

The Saudi-led coalition said on Tuesday that its air defences intercepted and destroyed four drones launched by the Houthis toward southern Saudi Arabia, Reuters reported.

Digital Assets & Financial Regulation

Ripple Announces Final OCC Approval for National Trust Bank

Ripple CEO Brad Garlinghouse said in a Monday post on X that the Office of the Comptroller of the Currency had granted final approval to charter Ripple National Trust Bank, establishing a federally supervised institution.

The approval enables the bank to manage reserves backing Ripple USD, or RLUSD, and expands its digital-asset custody services. The trust-bank structure provides federal oversight for infrastructure supporting RLUSD, which is issued by Ripple’s Standard Custody & Trust Company.

Payward Plans Regulated U.S. Perpetual Futures on Hyperliquid

Hyperliquid named Payward, the parent of cryptocurrency exchange Kraken, as its intended first Commodity Futures Trading Commission-regulated deployer on HIP-3 markets. Hyperliquid said in a Monday post on X that Payward planned to use the infrastructure to establish perpetual futures markets for U.S. customers. The arrangement remains subject to regulatory approval.

Under the proposal, Bitnomial, Payward’s CFTC-regulated designated contract market and derivatives clearing organization, would create, own and administer the markets, while handling clearing and settlement.

HIP-3 introduces optional on-chain allowlists that enable deployers to restrict access while retaining independent control of their markets. Payward had previously outlined plans to bring perpetual futures models to individual stocks through Bitnomial’s regulated exchange and clearing services.

China’s External Accounts

Standard Chartered Raises China Current-Account Surplus Estimates

Standard Chartered economists Shuang Ding and Hunter Chan raised their forecast for China’s 2026 current-account surplus to 4.0% of GDP from 2.5%. They attributed the revision mainly to a larger-than-expected goods trade surplus and a smaller-than-expected services trade deficit in the first half of 2026.

The economists also increased their 2027 surplus forecast to 3.6% of GDP from 2.0%, saying they expected the structural drivers of China’s external-sector strength to persist. The figures are bank forecasts rather than official current-account results.

Upcoming Key Events

• Federal Reserve Policy Decision — 2026-10-28; time not supplied: United States: The FOMC concludes its meeting and announces its monetary policy decision.
• UK Autumn Budget — 2026-10-28; time not supplied: United Kingdom: The government presents its tax and spending plans.
• Bank of Canada Policy Decision — 2026-10-28; time not supplied: Canada: The central bank announces its interest-rate decision.
• European Central Bank Policy Decision — 2026-10-29; time not supplied: Eurozone: The ECB announces its monetary policy decision.
• Bank of Japan Policy Decision — 2026-10-30; time not supplied: Japan: The central bank announces its monetary policy decision.
• Australian Consumer Price Inflation — Australia: Consumer price inflation data are upcoming; the release date and time are unspecified.
• Canadian GDP Release — Later this week; date and time not supplied: Canada: GDP data are scheduled for release later in the week.