Daily Financial Breakfast 22 October 2026: Iran's IRGC Warns US While WTI Rises to $99

Market News Today: Key Takeaways

• Iran's Islamic Revolutionary Guard Corps warned that its response could extend to US bases in the region and said seven vessels had been hit.
• WTI rose 1.40% to around $99 a barrel, near five-week highs, as attacks in Saudi Arabia renewed concerns about oil supplies.
• Gold slipped below $4,100 on Thursday after rebounding above $4,130 on Wednesday.
• RBI October meeting minutes reflected a 25-basis-point repo rate increase and a shift to calibrated tightening, DBS economist Radhika Rao said.
• UK inflation accelerated to 3.5%, driven by higher energy prices, while market-implied odds of a November Bank of England rate increase reached 95%.
• RBA Deputy Governor Andrew Hauser warned that third-quarter underlying inflation could exceed expectations.
• France's 10-year government bond yield rose above 5% on Wednesday for the first time since 2002.
• A Bank of Japan deputy highlighted inflation risks after the central bank's two rate increases this year took its policy rate to 1.25% in September.

Market Developments

Foreign Exchange

AUD/USD eased to around 0.7015 in early Asian trading on Thursday, after reaching 0.7027, up 0.44%, on Wednesday during its fourth consecutive day of gains. The Mexican peso lost more than 1.49% against the US dollar on Wednesday, its second straight day of declines. USD/JPY traded near 158.00, while EUR/USD was just below 1.1250 and GBP/USD remained below 1.3400.

Geopolitics & Commodities

Iran's IRGC Warns of Response Against US Bases

Iran's Islamic Revolutionary Guard Corps navy warned that its response could extend to US bases in the region if Washington continued urging vessels to cross a mined waterway, Reuters reported on Thursday. The IRGC also said seven vessels had been hit.

The warning followed a diplomatic demand from Iranian Foreign Minister Abbas Araghchi on Wednesday. Araghchi said the United States must lift its naval blockade and demonstrate that it was serious about ending the war through diplomacy, Bloomberg reported.

WTI Rises to Around $99 as Saudi Attacks Renew Supply Concerns

West Texas Intermediate crude traded around $99 a barrel on Thursday, up 1.40% and near five-week highs. It had traded around $97.70 during Asian hours as it halted a three-day losing streak. ICE Brent also moved back above $110 a barrel following fresh attacks in Saudi Arabia.

A drone attack on Saudi Aramco's Shaybah oilfield resulted in two casualties. ING analysts Warren Patterson and Ewa Manthey also reported drone strikes at Dammam's international airport and said an oil processing plant was targeted. The renewed rise in crude followed Wednesday's decline after the United States authorised cargo offloading from some blocked vessels.

Physical crude shipments from Kuwait continued despite the conflict. Kuwait Petroleum Corp's chief executive said the country was exporting as much crude as before the war and producing more than 2 million barrels a day, according to ING. Shipping refined products was more difficult, the executive said.

US Energy Information Administration data showed commercial crude inventories fell by 3.06 million barrels over the latest week, alongside a further 300,000-barrel decline in Strategic Petroleum Reserves. US oil production was estimated to have fallen by 410,000 barrels a day from the previous week, with the figures still reflecting hurricane activity in the Gulf of Mexico.

Gold Falls Below $4,100 After Wednesday's Rebound

Gold slipped below $4,100 on Thursday despite a softer US dollar and falling US Treasury yields. The decline reversed Wednesday's modest recovery, when the metal had rebounded above $4,130 as oil prices retreated.

Inflation, Central Banks & Sovereign Debt

RBI Minutes Detail 25-Basis-Point Increase and Calibrated Tightening

The Reserve Bank of India's October meeting minutes reflected a 25-basis-point repo rate increase and a change in stance to “calibrated tightening”, DBS Group Research economist Radhika Rao said. Members cited rising inflationary pressures and firm growth, while Governor Malhotra highlighted emerging signs that inflation was becoming more generalised.

Rao described two external members as particularly concerned about broadening inflation risks and the need for pre-emptive action. Two others supported incremental increases but explicitly rejected signalling a prolonged tightening cycle.

Indian government bond yields remained elevated, while the rupee had appreciated by around 1.5% against the US dollar during the month. Rao attributed the currency's strength to foreign-exchange regulatory measures, IPO inflows and tighter scrutiny of overseas investments; foreign-exchange forward premiums also remained elevated.

UK Inflation Accelerates to 3.5% as Energy Prices Rise

UK inflation accelerated to 3.5%, driven by higher energy prices. Market-implied odds of a Bank of England interest-rate increase in November reached 95%.

ING economist James Smith said evidence that the energy shock was spreading into other parts of the inflation basket remained limited. He also described economic growth as more resilient than feared and the labour market as stabilising.

RBA's Hauser Warns Underlying Inflation Could Exceed Expectations

Reserve Bank of Australia Deputy Governor Andrew Hauser warned on Wednesday that underlying inflation, measured by the trimmed mean, could exceed expectations in the third quarter. His comments added to discussion of further monetary tightening.

Earlier in the week, Assistant Governor Christopher Kent said several factors suggested neutral interest rates were rising in Australia and globally. The Australian dollar reached a fresh one-month high on Wednesday after recovering from below 0.6900 the previous week, when it had touched its lowest level since July.

France's 10-Year Bond Yield Tops 5% for First Time Since 2002

France's 10-year government bond yield rose above 5% on Wednesday, reaching that level for the first time since 2002. The euro showed little reaction to the increase in French borrowing costs.

BoJ Deputy Highlights Inflation Risks After Two Rate Increases

A Bank of Japan deputy highlighted inflation risks, with little immediate movement in the yen. The central bank had raised interest rates twice this year, taking its policy rate to 1.25% in September, although core inflation remained below its 2% target in each of the seven months through August.

Upcoming Key Events

• Reserve Bank of Australia Monetary Policy Meeting (3 November 2026): The Reserve Bank of Australia is scheduled to hold its next monetary policy meeting.