TMGM Daily Market Breakfast: 13 October 2026

Morning Snapshot

• The IMF raised its 2026 global growth forecast to 3.1% from 3.0%, saying stronger AI investment is offsetting the energy shock from the Middle East war, while leaving its 2027 forecast unchanged at 3.4%.
• Oil remained volatile as Middle East supply risks, including stepped-up Houthi attacks on Saudi Arabia and Gulf of Mexico disruptions, competed with the impact of a new U.S. move to allow Russian diesel imports.
• Cleveland Fed President Beth Hammack said further policy tightening is needed, arguing that inflation remains too high, the neutral rate is likely higher and the question is how fast to make policy more restrictive.
• The U.S. Dollar Index touched an 18-month high before easing below 102.50, while the euro fell below 1.1200 as hawkish Federal Reserve rhetoric and geopolitical tensions supported the dollar.
• Asian equities sold off sharply, with South Korea’s KOSPI under pressure as weakness in U.S. technology shares and concerns over Chinese chip competition weighed on regional markets.
• Reserve Bank of Australia minutes showed policymakers saw a case for acting promptly to keep inflation expectations anchored.
• Bank of Japan Governor Kazuo Ueda said long-term interest rates are determined by markets and that the central bank will continue to closely monitor bond-market developments.
• India’s September CPI rose 5.54% year on year, with food inflation at 7.74% and core inflation at 4.2%, as the RBI also introduced fresh measures aimed at reducing U.S. dollar demand.
• Bank Indonesia Governor Destry Damayanti reaffirmed the central bank’s monetary-policy autonomy, supporting the rupiah during Asian trading.
• Ripple-backed Evernorth began trading on Nasdaq under ticker XRPN after completing its merger with Armada Acquisition Corp. II, listing with 473 million XRP and $300 million in gross cash proceeds.

Market Developments

Foreign Exchange

The U.S. Dollar Index reached a fresh 18-month high before slipping back below 102.50 in Asian trading, while EUR/USD fell below 1.1200. USD/CNY and USD/CNH both fell to 6.69 last week, and AUD/USD traded around 0.6965, down 0.24% on the day at the time cited.

Commodities

WTI crude traded in a wide range, rising above $92 earlier in the period before pulling back toward $91.00-$91.50, while Brent settled 1.8% higher just shy of $107 per barrel, its highest close since mid-September. Gold fell about 1.49% during Monday trading.

Equities

Asian stock markets fell sharply in Tuesday trading, with South Korea’s KOSPI hit particularly hard as regional sentiment tracked weakness in U.S. technology shares and concerns over intensifying Chinese chip competition.

Macroeconomics & Central Banks

IMF Lifts 2026 Global Growth Forecast to 3.1%

The International Monetary Fund raised its forecast for global real GDP growth in 2026 to 3.1% from 3.0% in July, while leaving its 2027 projection unchanged at 3.4%. The revision points to stronger AI-related investment offsetting the energy shock linked to the Middle East war.

The update underscores how resilient capital spending in technology-related sectors is helping cushion the broader global economy even as higher energy costs remain a drag. The IMF did not change its 2027 outlook, indicating that the near-term upgrade has not yet altered its medium-term baseline.

Fed’s Hammack Says More Tightening Is Needed

Cleveland Fed President Beth Hammack said further policy tightening is needed, arguing that inflation remains too high and that more economic restraint is required. She said she is hearing signs that inflation expectations are becoming a concern and added that the neutral rate for the federal funds rate is likely higher.

Hammack said the key question for the Federal Reserve is how fast to make policy more restrictive, while also reiterating that she remains open to adjusting the pace of rate increases. Her remarks added to the hawkish tone around the U.S. policy outlook during the reporting window.

RBA Minutes Show Readiness to Act Promptly on Inflation Expectations

Minutes from the Reserve Bank of Australia’s September policy meeting showed policymakers saw a case for rates to act promptly to keep inflation expectations anchored. The account reinforced the central bank’s focus on preventing price pressures from becoming more entrenched.

The minutes were released as markets continued to assess how major central banks are balancing persistent inflation risks against slowing growth in parts of the global economy.

BoJ’s Ueda Says Long-Term Rates Are Market-Determined

Bank of Japan Governor Kazuo Ueda said long-term interest rates are determined in markets and reflect various factors, adding that the central bank will continue to closely monitor bond-market developments.

The remarks kept the focus on how the BoJ is framing its role in an environment of shifting global yields, while stopping short of signalling any immediate policy change.

India Inflation Accelerates as RBI Moves to Reduce Dollar Demand

India’s September consumer price inflation rose 5.54% year on year, with food inflation at 7.74% and core inflation at 4.2%, pointing to broader price pressures. Inflation has now risen every month since January and remained above the Reserve Bank of India’s 4% target for four consecutive months.

Societe Generale said the data signal strengthening corporate pricing power, sticky services inflation and a negative ex-post real policy rate. Against that backdrop, the RBI’s recent 25 basis-point rate increase was described as the possible start of a broader tightening cycle, with the central bank projecting inflation at 6.0% in 3QFY27 and 5.7% in 4QFY27.

Separately, the Indian rupee extended gains after the RBI announced fresh U.S. dollar-related measures aimed at lowering demand for the greenback and supporting the domestic currency.

Bank Indonesia Reaffirms Monetary-Policy Autonomy

Bank Indonesia Governor Destry Damayanti reaffirmed the central bank’s rate-setting autonomy, helping support the rupiah in Asian trading. USD/IDR was quoted around 17,950 after the currency gained against the U.S. dollar.

The comments signalled that Bank Indonesia intends to retain flexibility in responding to domestic conditions rather than mechanically following external policy moves.

Geopolitics, Energy & Commodities

Oil Swings as Middle East Supply Risks Offset Russian Diesel Deal

Oil markets remained dominated by competing supply signals. West Texas Intermediate rose above $92 earlier in the reporting period, including around $92.05 in early Asian trade, before retreating toward $91.50 and then $91.00 as traders weighed a U.S. decision to allow Russian diesel imports against escalating geopolitical risks. Brent settled 1.8% higher just shy of $107 per barrel, its highest close since mid-September.

Supply concerns in the Middle East remained central. Saudi Arabia said it was still facing drone and missile attacks as Iran-backed Houthi militants stepped up strikes after a deadly attack on Riyadh’s airport, prompting several countries to issue travel warnings. ING said the market was more focused on risks to Persian Gulf oil flows than on the Russia-Ukraine energy ceasefire or the U.S.-Russia diesel arrangement.

Additional supply-side strain came from the Gulf of Mexico, where offshore producers had shut in almost 605,000 barrels a day of oil production, equivalent to nearly 30% of total U.S. Gulf of Mexico output, according to the Marine Minerals Administration. Saudi Energy Minister comments also pointed to plans to expand the kingdom’s pipeline export capacity to 10 million barrels a day from 7 million barrels a day.

The U.S. diplomatic backdrop also shifted. U.S. special envoy Jared Kushner said the decision to allow Russian diesel exports was part of an effort to draw Russia back into negotiations after earlier attempts to launch sustained talks failed.

Gold Falls as Oil Shock and Hawkish Fed Tone Lift the Dollar

Gold fell about 1.49% on Monday as higher energy prices, a stronger U.S. dollar and firmer expectations for tighter monetary policy weighed on bullion. The move came as escalating Middle East hostilities pushed oil prices higher and reinforced inflation concerns.

The decline in gold unfolded alongside a broader shift into the dollar and other defensive positioning as markets absorbed both geopolitical tensions and hawkish Federal Reserve rhetoric.

Currencies & Markets

Dollar Hits 18-Month High as Fed Tone and Geopolitics Support Safe-Haven Demand

The U.S. Dollar Index climbed to an 18-month high during the reporting period before easing back below 102.50 in Asian trading. The move came as hawkish Federal Reserve rhetoric, elevated U.S. bond yields and geopolitical tensions supported demand for the dollar.

EUR/USD fell below the 1.1200 level as the greenback strengthened, while the earlier market reaction to President Donald Trump’s statement that Russia and Ukraine had agreed to stop striking each other’s energy sites faded. Brent had dropped below $103 a barrel when markets reopened after that announcement, but the ceasefire effect proved short-lived as Middle East tensions reasserted themselves.

Elsewhere, the Australian dollar traded around 0.6965, down 0.24% on the day at the time cited, as Fed policy expectations and renewed Iran-related tensions weighed on risk-sensitive currencies. In China, Commerzbank said Beijing’s new trade agreement with Brussels and a previously reported U.S.-China 30-for-30 tariff reduction framework modestly improved the external backdrop, while both USD/CNY and USD/CNH fell to 6.69 last week.

Asian Equities Slide as Tech Weakness and Chip Competition Hit Sentiment

Asian stock markets fell sharply in Tuesday trading, tracking weakness in U.S. technology shares seen during the Columbus Day session. South Korea’s KOSPI was singled out for particularly heavy pressure as investors reacted to intensifying competition from China in semiconductors.

The sell-off highlighted how technology-sector concerns and cross-border industrial competition were spilling into broader regional equity sentiment.

Corporate & Digital Assets

Ripple-Backed Evernorth Starts Trading on Nasdaq

Ripple-backed digital asset treasury company Evernorth began trading on Nasdaq under the ticker XRPN after completing its business combination with Armada Acquisition Corp. II. The company entered public markets with approximately 473 million XRP and $300 million in gross cash proceeds.

Evernorth said its XRP holdings were valued at about $639 million at current prices, below the $1 billion in funding initially announced for its XRP treasury strategy. The company bought XRP at $2.37 when the deal was signed, indicating a decline of roughly 40% from that level.

About 80.3% of Armada Acquisition Corp. II public shareholders redeemed their shares, withdrawing roughly $195 million before the merger closed.