TMGM Daily Market Breakfast for 24 October 2026

What Is Driving Markets This Morning?

• WTI crude climbed to its highest level in 22 weeks as attacks hit Saudi Arabia and ships departing the Strait of Hormuz.
• An October pause at 4.00%, followed by renewed tightening in December and March, is the Federal Reserve policy outlook envisaged by TD Securities economists.
• A stronger willingness to pre-empt inflation risks emerged from Bank of Canada communications, RBC economists said, although they argued that spare economic capacity continued to warrant patience.
• The ECB deposit rate is expected to stay at 2.50% in October before rising to 2.75% in December, according to Commerzbank economists.
• A seventh consecutive day of losses took USD/CAD beneath 1.4000 and down to its lowest level in a month.
• Having touched a one-month trough of 0.8191 on Thursday, USD/CHF recovered 0.56% to trade around 0.8250.

What Is Moving the Markets?

How Are Currency Pairs Trading?

Friday brought a seventh consecutive daily decline for USD/CAD, which slipped beneath 1.4000 to its lowest point in a month. By contrast, a recovery in the U.S. dollar and Treasury yields supported a 0.56% gain in USD/CHF to around 0.8250, reversing the previous day's losses. Thursday had seen the pair touch 0.8191, a one-month low.

How Is Geopolitics Affecting Energy? &

What Took WTI to a 22-Week High After Gulf Attacks?

After trading within a $95.00–$101.00 per barrel range from Monday through Thursday, WTI crude broke higher to reach a 22-week high. The advance followed two days of Houthi attacks in Saudi Arabia and strikes against ships departing the Strait of Hormuz.

What Lies Ahead for Central Bank Policy?

Why Does TD Securities Expect an October Fed Pause at 4.00%?

An earlier call for continued Federal Reserve tightening has given way to an October pause in the forecast of TD Securities strategists, who now expect the policy rate to remain at 4.00% at the FOMC meeting. Explaining their previous view, they pointed to strong inflation and a labour market that had remained in good shape.

Further increases in December and March remain part of their forecast. This is TD Securities' assessment of the outlook, rather than a policy trajectory announced by the Federal Reserve.

Does the Bank of Canada Signal Earlier Action on Inflation? RBC Weighs In

A shift towards pre-emptive action on inflation risks was evident in recent Bank of Canada communications, according to Royal Bank of Canada economists Frances Donald and Nathan Janzen. Their assessment drew on the September 2 rate decision and comments made by Governor Tiff Macklem on the sidelines of the International Monetary Fund meetings, which they viewed as signs that the central bank's risk assessment had changed.

Waiting nevertheless remained a compelling option in the economists' view. Although Canada's economy was improving, it was not yet strong, and remaining spare capacity was sufficient to curb inflation pass-through. They saw scope for a 25-basis-point increase in October, but also identified December or January as alternatives.

For RBC's medium-term economic outlook, the exact timing of the increase would make no material difference, the bank said. Subject to a gradual improvement in the economy, its baseline already factored in 100 basis points of rate increases in 2027.

Why Does Commerzbank See an ECB Pause in October Before a December Rise?

Persistent inflation in the eurozone underpins Commerzbank economists' forecast for a December increase in the European Central Bank's deposit rate to 2.75%, following an October hold at 2.50%. Their projections then show no change in the rate throughout 2027.

At the current 2.50%, the rate was already seen as slightly restrictive by some ECB Governing Council members, the economists noted. Commerzbank's reading of policymakers' remarks on the neutral interest rate suggested that a majority of the council would take the same view of a 2.75% deposit rate. In forecasting a pause thereafter, the bank pointed to factors including higher bond yields and the restrictive influence of policy rates.

Which Key Events Are Coming Up?

• Federal Reserve: Policy Rate Decision — United States: Next week, the FOMC is due to announce its interest-rate decision.
• Bank of Canada: Overnight Rate Decision — 2026-10-28: Canada: The overnight-rate decision from the Bank of Canada is due on Wednesday.
• European Central Bank: Policy Rate Decision — Eurozone: The ECB is due to announce its interest-rate decision next week.