TMGM Daily Market Breakfast: What’s in Focus on 20 October 2026?

What Is Driving Markets This Morning?

• Oil prices hit their highest level in over a month as Iran threatened a broader maritime blockade, with WTI crude advancing 2.5% to nearly $100.50 a barrel.
• Stronger-than-expected growth in China accompanied comments on rising neutral interest rates from RBA Assistant Governor Christopher Kent, who said there were reasonable signs of an increase. China’s third-quarter GDP expanded 4.5% year-on-year.
• An unchanged interest rate and a higher inflation forecast were planned for the Bank of Japan’s October policy meeting, according to Reuters.
• Protests and looting were accompanied by a 13 basis point rise in French 10-year government bond yields, Rabobank reported.
• A second consecutive day of rupiah gains came as Bank Indonesia strengthened its currency-stabilisation efforts on the directive of President Prabowo Subianto.

Where Are Markets Moving?

How Are Energy Prices Trading?

After trading around $98.40 in the Asian session and $99.15 early in European trading, WTI futures reached nearly $100.50 a barrel on Tuesday. The 2.5% advance put prices at their highest in over a month. ING placed ICE Brent at around $110 a barrel.

What Has Changed in Foreign Exchange?

Monday’s 0.51% advance left AUD/USD trading around 0.6980. For USD/IDR, Tuesday’s Asian session brought a second consecutive day of declines, taking the pair to around 18,040.

How Do European Government Bond Moves Compare?

Monday’s rise in French 10-year yields, at 13 basis points, exceeded the 8 basis point increase in Italy and the 3 basis point increase in Germany, said Rabobank strategists Joe DeLaura and Florence Schmit.

Oil Markets & Geopolitical Developments

What Does Iran’s Wider Blockade Threat Mean as Oil Hits a Monthly High?

A blockade extending to the Bab al-Mandeb Strait and the Suez Canal remained a possibility, Iran’s Islamic Revolutionary Guard Corps said, adding that Tehran had not fully closed the Strait of Hormuz. Tehran Times carried the comments on Monday. Rabobank separately relayed an Iranian claim that two tankers carrying up to 4 million barrels of crude had been struck by marine mines. There was no independent confirmation of that claim.

Unconfirmed reports of new U.S. strikes on Iran helped lift WTI from Monday’s session low just above $96.50 to just above $99.00, in a session marked by sharp price swings. Before that recovery, prices had weakened following President Donald Trump’s waiver of Graham Act sanctions and tariffs on Russian energy. News of the waiver had surfaced after Friday’s market close. In its Monday update, Rabobank put the decline in active Brent futures at $1.80 a barrel.

Record tanker freight rates contrasted with relatively strong Persian Gulf oil flows despite the tensions, according to ING strategists Warren Patterson and Ewa Manthey. They attributed less efficient vessel use to developments in the Middle East. To add capacity to the legitimate shipping market, the United States was considering permitting the sale of sanctioned tankers, the strategists said. Uncertainty remained over both the capacity that could become available and the timing.

Physical oil demand came into further focus through China’s September production and refining figures. At 4.45 million barrels a day, domestic crude output showed increases of 0.6% month-on-month and 2.5% year-on-year. A little over 14 million barrels a day passed through refineries, the highest throughput since March. This was 0.4% above August’s level, though 8.4% below the year-earlier figure.

ING’s estimate, based on these figures and trade data, put China’s September crude inventory drawdown at 16 million barrels, or a little more than 500,000 barrels a day. Apparent demand, as calculated by the bank, stood at 12.75 million barrels a day. That represented declines of 2.7% month-on-month and 15.2% year-on-year.

Economic Indicators & Monetary Policy

What Do Faster China Growth and RBA’s Kent Signal on Neutral Rates?

An acceleration in China’s third-quarter expansion took year-on-year growth to 4.5%, above market expectations and the previous quarter’s 4.3%. Australia counts China as its largest trading partner, with Chinese demand playing a major role in Australian commodity exports, including iron ore.

Both Australia and the global economy showed reasonable signs of rising neutral interest rates, according to RBA Assistant Governor Christopher Kent. Monetary policy neither stimulates nor restrains economic activity when interest rates are at the neutral level.

Will the Bank of Japan Hold Rates and Lift Its October Inflation Forecast?

Reuters cited four sources familiar with the Bank of Japan’s thinking in reporting that its October policy meeting would keep interest rates unchanged while raising the inflation forecast. These are reported plans under policy deliberation, not a decision that has been announced.

Why Are French Government Borrowing Costs in Focus Amid Unrest?

Curfews were among the measures being considered by French authorities as protests and looting took place, according to Rabobank strategists Joe DeLaura and Florence Schmit. Their report described unrest in Belgium and Italy as well, after earlier peaceful protests in Spain and Portugal.

Whether and how the European Central Bank would respond to a French request for assistance was a question raised by the strategists. They set out a policy dilemma weighing intervention against risks to the EU’s broader economic, political and financial stability. This analysis concerned potential policy choices; it did not announce any ECB action.

How Is Bank Indonesia Reinforcing Rupiah Stability?

President Prabowo Subianto’s directive prompted Bank Indonesia to intensify its efforts to stabilise the rupiah. As those efforts were stepped up, the currency recorded gains for a second consecutive day.