24 October 2026: TMGM Daily Market Breakfast

Morning Market Brief

• 22-week highs were reached by WTI crude. The advance followed attacks in Saudi Arabia and on ships departing the Strait of Hormuz.
• A 4.00% October hold by the Federal Reserve is the forecast from TD Securities economists, who expect additional policy tightening in December and March.
• Bank of Canada communications showed increased readiness to tackle inflation pre-emptively, according to RBC economists. They nevertheless maintained that spare capacity in the economy supported waiting.
• A 2.50% ECB deposit rate in October, followed by a rise to 2.75% in December, is the forecast from Commerzbank economists.
• Below 1.4000, USD/CAD reached a one-month low as its run of daily declines stretched to seven consecutive days.
• A 0.56% recovery lifted USD/CHF to around 0.8250, following Thursday's one-month trough of 0.8191.

Market Moves and Policy Outlook

Currency Markets

1.4000 gave way in USD/CAD on Friday. The pair hit a one-month low, marking seven consecutive days of declines. A recovery in the U.S. dollar and Treasury yields helped USD/CHF reverse the previous day's losses, gaining 0.56% to around 0.8250. On Thursday, it had reached 0.8191, its lowest level in a month.

Energy Markets & Geopolitical Risks

22-Week High for WTI After Gulf Attacks

Two days of Houthi attacks in Saudi Arabia and strikes against ships departing the Strait of Hormuz pushed WTI crude to a 22-week high. Crude broke above the $95.00–$101.00 per barrel trading range in place from Monday through Thursday.

Monetary Policy Outlook

4.00% October Fed Hold Expected by TD Securities

An unchanged 4.00% policy rate at the October FOMC meeting is now the forecast from TD Securities strategists, replacing their earlier call for further Federal Reserve tightening. Elevated inflation and a labour market still in good shape had underpinned their previous assessment, they said.

Further rate rises in December and March remain in the strategists' forecast. These projections reflect the assessment of TD Securities, not a policy path announced by the Federal Reserve.

Bank of Canada More Ready to Tackle Inflation, Says RBC

Recent communications from the Bank of Canada pointed to a greater willingness to address inflation risks pre-emptively, according to Royal Bank of Canada economists Frances Donald and Nathan Janzen. As evidence of a revised risk assessment, they highlighted the September 2 rate decision and remarks by Governor Tiff Macklem on the sidelines of the International Monetary Fund meetings.

Even so, the economists saw a compelling case for waiting. Canada's economy was recovering but remained short of strength, with enough spare capacity to limit inflation pass-through. An October rise of 25 basis points was possible in their view, with December or January also identified as potential dates.

Whether the increase came sooner or later would make no material difference to RBC's medium-term economic outlook, the bank said. Its baseline already allowed for 100 basis points of rate rises in 2027, conditional on gradual economic improvement.

2.50% October ECB Hold, Then 2.75% in December: Commerzbank

Persistent eurozone inflation would prompt the European Central Bank to raise its deposit rate to 2.75% in December after holding at 2.50% in October, Commerzbank economists forecast. They expected no further change to the rate throughout 2027.

Some ECB Governing Council members already viewed the current 2.50% rate as slightly restrictive, the economists said. Drawing on policymakers' remarks about the neutral interest rate, Commerzbank assessed that most council members would also regard a 2.75% deposit rate as slightly restrictive. Higher bond yields and the restrictive impact of policy rates were among the reasons the bank gave for expecting a pause thereafter.

Key Events Ahead

• Federal Reserve Rate Announcement — United States: Next week brings the scheduled FOMC interest-rate decision.
• Bank of Canada Rate Announcement — 2026-10-28: Canada: Wednesday is the scheduled date for the Bank of Canada's overnight-rate announcement.
• European Central Bank Rate Announcement — Eurozone: Next week brings the scheduled ECB interest-rate decision.