Daily Financial Breakfast 20 October 2026: WTI Rises 2.5% to Near $100.50 While UK Jobs Data Lift Sterling

Market News Today: Key Takeaways

• WTI rose 2.5% to near $100.50 a barrel as Iran warned of a wider maritime blockade and tensions surrounding tanker traffic persisted.
• Stronger-than-expected UK labour-market data lifted sterling, with markets pricing a 95% probability of a Bank of England interest-rate increase.
• French 10-year bond yields rose 13 basis points on Monday amid protests and looting, Rabobank said.
• Reuters reported that the Bank of Japan plans to hold interest rates steady and raise its inflation forecast at its October meeting.
• China's third-quarter GDP growth accelerated to 4.5% year-on-year, while RBA Assistant Governor Christopher Kent said there were reasonable signs of rising neutral interest rates.
• Bank Indonesia intensified currency-stabilisation efforts under President Prabowo Subianto's directive as the rupiah strengthened for a second consecutive day.

Market Developments

Foreign Exchange

EUR/GBP fell 0.38% to around 0.8395 on Tuesday, a level last seen in May 2025. USD/IDR declined for a second consecutive day to around 18,040 during Asian trading. On Monday, AUD/USD gained 0.51% to around 0.6980.

European Government Bonds

French 10-year yields rose 13 basis points on Monday, compared with increases of 8 basis points in Italy and 3 basis points in Germany, Rabobank strategists said.

Energy & Geopolitics

WTI Reaches One-Month High as Iran Warns of Wider Maritime Blockade

WTI futures rose 2.5% to near $100.50 a barrel on Tuesday, their highest level in more than a month. Prices had traded around $98.40 during Asian hours and approximately $99.15 in early European trading. ING strategists Warren Patterson and Ewa Manthey put ICE Brent around $110 a barrel amid continuing Middle Eastern supply risks.

Iran's Islamic Revolutionary Guard Corps said on Monday that Tehran had not completely closed the Strait of Hormuz and could extend the blockade to the Bab al-Mandeb Strait and the Suez Canal, Tehran Times reported. Separately, Rabobank cited Iran's claim that marine mines had struck two tankers carrying up to 4 million barrels of crude.

Monday's trading included a WTI recovery from just above $96.50 to just above $99.00 amid unconfirmed reports of new U.S. strikes on Iran. Earlier, oil had weakened following news that President Donald Trump was waiving Graham Act sanctions and tariffs on Russian energy. Rabobank reported Brent futures down $1.80 a barrel during that earlier phase of trading.

ING said Persian Gulf oil flows remained relatively strong despite the tensions, while tanker freight rates had reached records as shipping became less efficient. The strategists said the United States was considering allowing sales of sanctioned tankers to expand capacity in the legitimate shipping market; the amount of capacity involved remained uncertain.

China's September figures added a separate supply-and-demand development. Domestic crude production reached 4.45 million barrels a day, up 0.6% month-on-month and 2.5% year-on-year. Refinery throughput was slightly above 14 million barrels a day, up 0.4% on the month but down 8.4% from a year earlier, and the highest since March.

Combining those figures with trade data, ING estimated that China drew down crude inventories by slightly more than 500,000 barrels a day, or 16 million barrels during September. The bank calculated apparent demand at 12.75 million barrels a day, down 2.7% month-on-month and 15.2% year-on-year.

European Economy & Policy

UK Labour Data Lift Sterling and BoE Rate-Increase Pricing

Stronger-than-expected UK employment data strengthened sterling on Tuesday and reinforced market expectations of tighter Bank of England policy. Markets priced a 95% probability of an interest-rate increase at the bank's next meeting.

French Unrest Accompanies Sharp Rise in Government Borrowing Costs

Protests and looting in France accompanied a sell-off in government bonds on Monday, with authorities considering curfews, Rabobank strategists Joe DeLaura and Florence Schmit said. They also described unrest in Belgium and Italy, following earlier peaceful protests in Spain and Portugal.

The strategists linked the increase in French borrowing costs to political uncertainty and questioned how the European Central Bank would respond to any need for intervention. Their discussion of possible support for France or measures to contain contagion was a policy assessment, not an announced ECB action.

Asia-Pacific Economy & Central Banks

Reuters Reports BoJ Plans Rate Hold and Higher Inflation Forecast

The Bank of Japan plans to leave interest rates unchanged and raise its inflation forecast at its October monetary-policy meeting, Reuters reported, citing four sources familiar with the central bank's thinking. The reported plans were not an announced policy decision.

China Growth Accelerates as RBA's Kent Points to Rising Neutral Rates

China's economy expanded 4.5% year-on-year in the third quarter, exceeding market expectations and accelerating from 4.3% in the previous quarter. The figures marked stronger growth in Australia's largest trading partner.

RBA Assistant Governor Christopher Kent said there were reasonable signs that neutral interest rates were rising in Australia and globally. The neutral rate is the interest-rate level at which monetary policy neither stimulates nor restricts economic activity.

Bank Indonesia Intensifies Rupiah-Stabilisation Efforts

Bank Indonesia stepped up currency-stabilisation efforts under a directive from President Prabowo Subianto. The action accompanied a second consecutive day of rupiah gains during Tuesday's Asian trading.

Upcoming Key Events

• Bank of England Monetary-Policy Meeting (5 November 2026): The Bank of England is scheduled to meet to decide interest-rate policy.