TMGM Daily Market Breakfast: 24 October 2026

Morning Snapshot

• WTI crude reached a 22-week high following attacks in Saudi Arabia and on ships leaving the Strait of Hormuz.
• TD Securities economists forecast an October Federal Reserve hold at 4.00%, followed by further policy tightening in December and March.
• RBC economists said Bank of Canada communications indicated greater willingness to act preemptively against inflation, while arguing that economic slack still justified waiting.
• Commerzbank economists forecast an unchanged ECB deposit rate of 2.50% in October and an increase to 2.75% in December.
• USD/CAD fell below 1.4000 to a one-month low, extending its decline to seven consecutive days.
• USD/CHF rebounded 0.56% to around 0.8250 after reaching a one-month low of 0.8191 on Thursday.

Market Developments

Foreign Exchange

USD/CAD traded below 1.4000 on Friday, reaching its lowest level in a month and extending its losing streak to seven consecutive days. USD/CHF rose 0.56% to around 0.8250, reversing the previous day's losses as the U.S. dollar and Treasury yields recovered; the pair had touched a one-month low of 0.8191 on Thursday.

Energy & Geopolitics

WTI Reaches 22-Week High Following Gulf Attacks

WTI crude rose to a 22-week high after two days of Houthi attacks in Saudi Arabia and strikes on ships leaving the Strait of Hormuz. Prices moved above the $95.00–$101.00 per barrel range that had held from Monday through Thursday.

Central Banks

TD Securities Forecasts Fed Hold at 4.00% in October

TD Securities strategists forecast that the Federal Reserve would leave its policy rate at 4.00% at the October FOMC meeting, revising an earlier expectation for continued tightening. They cited strong inflation and a labor market that remained in good shape as arguments that had supported their previous assessment.

The strategists retained a forecast for further rate increases in December and March. Those projections represent TD Securities' assessment rather than an announced Federal Reserve policy path.

RBC Says Bank of Canada Signals Greater Readiness to Act Against Inflation

Royal Bank of Canada economists Frances Donald and Nathan Janzen said recent Bank of Canada communications suggested a shift toward acting preemptively against inflation risks. They pointed to the September 2 rate decision and Governor Tiff Macklem's comments on the sidelines of the International Monetary Fund meetings as evidence of a change in the central bank's risk assessment.

The economists nevertheless argued that the case for waiting remained compelling: Canada's economy was improving but was not yet strong, and sufficient slack remained to restrain inflation pass-through. They considered a 25-basis-point October increase possible, while identifying December or January as alternatives.

RBC said the precise timing of that increase would not materially alter its medium-term economic outlook. Its baseline already incorporated 100 basis points of rate increases in 2027, contingent on a gradually improving economy.

Commerzbank Forecasts ECB Hold in October and December Rate Increase

Commerzbank economists forecast that the European Central Bank would leave its deposit rate at 2.50% in October before raising it to 2.75% in December in response to persistent eurozone inflation. They projected that the rate would then remain unchanged throughout 2027.

The economists said some ECB Governing Council members already regarded the current 2.50% rate as slightly restrictive. Based on policymakers' comments about the neutral interest rate, Commerzbank judged that a 2.75% deposit rate would also be considered slightly restrictive by a majority of the council. The bank cited higher bond yields and the restrictive effect of policy rates among the factors behind its forecast for a subsequent pause.

Upcoming Key Events

• Federal Reserve Interest-Rate Decision — United States: The FOMC interest-rate decision is scheduled for next week.
• Bank of Canada Interest-Rate Decision — 2026-10-28: Canada: The Bank of Canada is scheduled to announce its overnight-rate decision on Wednesday.
• European Central Bank Interest-Rate Decision — Eurozone: The ECB interest-rate decision is scheduled for next week.