Daily Financial Breakfast 3 November 2026: RBA Lifts Rate to 4.85% as WSJ Reports US Strike on Qeshm

Market News Today: What Is Driving the Key Developments?

• Efforts to end the conflict remained under discussion, Iran said, even as The Wall Street Journal reported a United States strike on Iran’s Qeshm Island on Monday.
• Policy choices remained open, Governor Michele Bullock said, after a 6-3 vote saw the Reserve Bank of Australia lift its cash rate by 25 basis points to 4.85%.
• An ECB leadership transition affecting half of the Executive Board is moving faster following Christine Lagarde’s planned early exit, according to Standard Chartered.
• First-quarter U.S. Treasury funding needs are estimated at $800 billion versus $618 billion in the fourth quarter, Danske Research reported.
• An October reading of 55.5 took the U.S. ISM manufacturing index above both September’s 54.5 and the consensus projection of 54.5.
• A rebound towards $95.30 followed Monday’s WTI sell-off; TD Securities, meanwhile, noted that onshore inventories were declining despite the recovery in Middle East oil flows.
• Binance said it had restored all assets affected by the $6.3 billion exploit, while North Korea denied U.S. allegations attributing the attack to its hackers.
• The $388 million loss from Bitget’s September hack was borne by the exchange, CEO Gracy Chen said, alongside changes to its security controls.
• Losses in Brazilian equities and the real followed President Lula’s re-election, according to HSBC, which also pointed to a stronger opposition presence in Congress.

What Is Shaping Markets?

How Are Currency Pairs Trading?

Following the RBA announcement, a 0.25% decline left AUD/USD near 0.6975. The Australian dollar also weakened against the yen, taking AUD/JPY towards 110.20, while AUD/NZD reached around 1.2430 on its second consecutive day of losses. Having earlier traded near 0.8345, EUR/GBP slipped 0.11% to around 0.8336. European trading saw GBP/USD broadly steady near 1.3410, following an Asian-session dip towards 1.3405. After a modest decline the day before, the U.S. Dollar Index stayed close to 101.80 during Asian hours.

What Is Changing on the Geopolitical Front?

What Has WSJ Reported About the U.S. Strike on Iran’s Qeshm Island?

Diplomatic engagement continued against the backdrop of another U.S. attack on Iran. Citing U.S. officials, The Wall Street Journal said the United States targeted Iran’s Qeshm Island, near the Strait of Hormuz, on Monday. The report placed the operation within a series of limited strikes carried out covertly by Washington against Iran over recent weeks.

Reuters reported on Monday that Iran said discussions with the United States aimed at ending their eight-month conflict were still under way. Iranian officials and Qatari mediators had spent several days negotiating. Those exchanges resulted in revised proposals, although a major breakthrough remained elusive.

What Are Central Banks Signalling?

Does the RBA’s Divided Vote Leave More Tightening Ahead?

With inflation continuing to exceed its target, the Reserve Bank of Australia delivered the market-expected increase on 3 November. A 6-3 vote lifted the cash rate from 4.6% to 4.85%, a rise of 25 basis points and the fifth increase this year.

For the first time since June, the policy statement no longer referred to the possibility of additional rate increases. According to ING’s Francesco Pesole, a sharp downgrade to the economic outlook reflected pressure on consumers from declining house prices, alongside risks of higher unemployment. Governor Michele Bullock used her press conference to emphasise that the effects of earlier monetary tightening had not yet fully reached the economy.

The revised language did not signal an end to rate increases, Bullock maintained. Standard Chartered’s Nicholas Chia reported her description of the RBA as “preserving our options”. Risks of higher inflation remained a feature of the statement, which also recognised that capacity pressures were tighter than earlier assessments suggested. Without offering estimates, Bullock added that the neutral interest rate and the non-accelerating inflation rate of unemployment had both moved higher.

How Is Lagarde’s Early Departure Reshaping the ECB Succession?

A broader change of leadership at the European Central Bank has been brought forward by Christine Lagarde’s decision to step down as president nine months early, according to Standard Chartered’s Christopher Graham. The transition requires replacements for half of the Executive Board, among them Isabel Schnabel and Philip Lane.

Potential candidates to succeed Lagarde discussed by Graham included Pablo Hernandez de Cos and former Dutch central bank governor Klaas Knot. In his assessment, a straightforward division between hawks and doves did not capture the appointments’ full policy implications; the remaining board selections mattered too. These are possible succession outcomes, with no appointments confirmed.

What Do U.S. Fiscal Policy & Economic Data Indicate?

How Do U.S. First-Quarter Borrowing Needs Compare at $800 Billion?

The U.S. Treasury expects to borrow $800 billion in the first quarter, against $618 billion in the fourth quarter, Danske Research said in its review of the quarterly refunding estimates. It also reported a target cash balance of $1,000 billion at the close of the first quarter.

A slightly larger opening cash balance than anticipated allowed the fourth-quarter borrowing projection to be cut by $10 billion. No change was made to the year-end cash balance target of $850 billion.

What Lies Behind the U.S. ISM Manufacturing Rise to 55.5?

Stronger production and a marginal improvement in new orders accompanied the rise in the U.S. ISM manufacturing index, Danske Research noted. October’s reading reached 55.5, compared with 54.5 in September, whereas consensus had anticipated no change at 54.5.

The picture was less firm in another activity gauge. A downward revision took the S&P Global manufacturing PMI from its preliminary 55.9 to 54.9. Although the index still pointed to expansion, the pace was weaker than both the prior month and the initial estimate.

What Is Moving Energy & Commodities?

Can WTI’s Recovery Towards $95.30 Offset the Diplomacy-Led Decline?

WTI regained ground in early Asian dealings on Tuesday, with West Texas Intermediate crude around $95.30 after the previous session’s low of $94.30, a level last seen on 16 October. News of U.S.-Iran diplomatic efforts had reduced concerns over additional supply disruptions, pushing Monday’s loss beyond 5%. A subsequent account recorded the decline at 6.50%.

The recovery in physical supply was not uniform. According to TD Securities’ Ryan McKay, Middle East oil flows using the Strait of Hormuz, the Gulf of Oman and bypass pipelines were back at pre-war levels. Yet shuttling tankers around Oman continued to carry high costs and depended on uninterrupted U.S. Navy support. Ship-to-ship transfers, moreover, lengthened both loading and voyage times.

A surplus of crude approaching 2–3 million barrels a day emerged from TD Securities’ high-frequency estimates. Oil on water accounted for most of that accumulation, even as commercial stocks onshore kept shrinking. By contrast, the bank put the petroleum-products shortfall at more than 2 million barrels a day. McKay linked high prices to improving demand and tight product markets, as well as supply threats posed by Houthi strikes on Saudi infrastructure and IRGC attacks on tankers.

What Do the Cryptocurrency Security Incidents Show?

Why Is North Korea Disputing U.S. Claims Over the $6.3 Billion Binance Exploit?

U.S. claims that state-backed North Korean hackers carried out the $6.3 billion Binance exploit drew a denial from North Korea. In attributing the attack, the FBI identified North Korean hackers associated with the TraderTraitor cyber activity designation.

The allegations were a political provocation intended to depict North Korea as a cybercriminal state, said Kim Yo-jong, sister of the country’s leader Kim Jong-un. Yonhap reported her comments late Monday after the Korean Central News Agency carried the statement. For its part, Binance said the affected assets had been restored in full and that it had completed a fresh zero-knowledge proof-of-reserves snapshot.

How Did Bitget Change Its Security After the $388 Million Hack?

Rather than transfer losses to users, Bitget resolved within hours to cover the $388 million lost in its September hack, CEO Gracy Chen said. Speaking to FXStreet, she explained that small unauthorised transfers had marked the start of the attack, which then developed into larger withdrawals across several chains.

According to Bitget, its security systems picked up the irregularities and halted withdrawals in minutes. An internal review traced the issue to a flaw in a third-party security product that affected transaction authorisation, without compromising private keys or cold wallets. The exchange later changed how sensitive systems could be accessed, added multiple approval layers for critical operations and strengthened monitoring.

The attack added to broader losses across the industry. CertiK estimated that cryptocurrency security breaches in 2026 had caused losses of approximately $8.65 billion to $8.98 billion.

How Is Regional Politics Affecting Markets?

Why Did Brazilian Assets Fall After Lula’s Re-Election, According to HSBC?

A substantial repricing of Brazilian assets followed President Lula’s surprise victory in the second round of the election, HSBC strategists said. Stock indices posted sharp declines, while the real weakened against the U.S. dollar.

At the same time, HSBC pointed to gains by the opposition in Congress. The bank argued that this political split made rebuilding fiscal credibility more difficult and left Brazil’s fiscal risk premium elevated.

Which Key Events Are Next?

• What Is the U.S. Midterm Election Timeline? (3 November 2026): United States: Tuesday is the scheduled day for midterm voting. According to Danske Research, provisional results were expected on Wednesday morning, but definitive outcomes could require weeks or longer.
• When Is the Bank of England’s Next Rate Decision?: United Kingdom: A further interest-rate decision from the Bank of England is still ahead.