TMGM Daily Market Breakfast: 20 October 2026

Morning Snapshot

• WTI crude rose 2.5% to near $100.50 a barrel, its highest level in over a month, as Iran threatened to extend its maritime blockade.
• China’s third-quarter GDP grew 4.5% year-on-year, exceeding expectations, while RBA Assistant Governor Christopher Kent said there were reasonable signs of rising neutral interest rates.
• Reuters reported that the Bank of Japan planned to keep interest rates unchanged and raise its inflation forecast at its October policy meeting.
• French 10-year government bond yields rose 13 basis points amid protests and looting, according to Rabobank.
• Bank Indonesia intensified currency-stabilisation efforts under President Prabowo Subianto’s directive as the rupiah strengthened for a second consecutive day.

Market Developments

Energy

WTI futures traded near $100.50 a barrel on Tuesday, up 2.5% and at their highest level in over a month, after earlier readings around $98.40 in Asian trading and $99.15 in early European trading. ICE Brent traded around $110 a barrel, according to ING.

Foreign Exchange

AUD/USD traded around 0.6980 on Monday, up 0.51% on the day. USD/IDR declined for a second consecutive day to around 18,040 during Tuesday’s Asian session.

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 Joe DeLaura and Florence Schmit said.

Energy & Geopolitics

Iran Threatens Wider Maritime Blockade as Oil Prices Reach Monthly High

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

Oil trading swung sharply during Monday’s session. WTI climbed from a session low just above $96.50 to just above $99.00 amid unconfirmed reports of new U.S. strikes on Iran. Earlier weakness followed President Donald Trump’s waiver of Graham Act sanctions and tariffs on Russian energy, news of which had emerged after Friday’s market close. Rabobank reported that active Brent futures were down $1.80 a barrel at the time of its Monday update.

ING strategists Warren Patterson and Ewa Manthey said Persian Gulf oil flows remained relatively strong despite the tensions, while tanker freight rates had reached record levels as developments in the Middle East made vessel use less efficient. They said the United States was considering allowing the sale of sanctioned tankers to expand capacity in the legitimate shipping market, but the amount of capacity involved and the timing remained uncertain.

China’s September production and refining figures added detail on physical oil demand. Domestic crude output rose 0.6% month-on-month and 2.5% year-on-year to 4.45 million barrels a day. Refineries processed a little over 14 million barrels a day, up 0.4% from August but down 8.4% from a year earlier, marking the highest throughput since March.

Combining those figures with trade data, ING estimated that China drew down crude inventories by a little more than 500,000 barrels a day, or 16 million barrels over 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.

Macroeconomics & Central Banks

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

China’s economy expanded 4.5% year-on-year in the third quarter, accelerating from 4.3% in the previous quarter and exceeding market expectations. China is Australia’s largest trading partner and a major source of demand for its commodity exports, including iron ore.

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 restrains economic activity.

Bank of Japan Plans October Rate Hold and Higher Inflation Forecast, Reuters Reports

The Bank of Japan plans to leave interest rates unchanged and raise its inflation forecast at its October policy meeting, Reuters reported, citing four sources familiar with the central bank’s thinking. The account describes policy deliberations rather than an announced decision.

French Unrest Accompanies Sharp Rise in Government Borrowing Costs

French authorities were considering curfews amid protests and looting, 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 questioned how the European Central Bank would respond if France required assistance, framing a policy dilemma between intervention and the risks to wider EU economic, political and financial stability. Their comments were an assessment of possible policy choices, not an announcement of ECB action.

Bank Indonesia Steps Up Rupiah Stabilisation Efforts

Bank Indonesia intensified efforts to stabilise the rupiah under a directive from President Prabowo Subianto. The currency’s second consecutive day of gains coincided with the stepped-up stabilisation effort.