UK CPI tests a near-priced BoE hike; WTI back at 100.21 after a quiet Asia

London Open, Wednesday, 21 October 2026. Published 06:00 UTC.

Quiet: The 24h tilt is mildly risk-on: indices average +0.61%, gold is -0.25% and JPY (-0.13) and CHF (-0.06) are soft, but Asia ranges stayed well below normal ahead of UK CPI.

In short

• Asia was quiet, with ranges well below normal: GBPUSD at 0.16x and EURUSD at 0.24x a typical day. Oil did most of the moving. WTI is up 0.93% since the last note to 100.21 after a diplomat called reports of a close US-Iran deal wrong, and an API crude draw of -4.93M (f/c -1.3M) added support.
• Japan's September trade deficit widened to -536.6B¥ against a -181B¥ forecast, and exports missed at 16.7% (f/c 20.1%). USDJPY barely moved at 158.18, while JP225 is 0.66% lower since the last note. Silver is down 1.02% on the day. Gold held above its 4110.84 D1 support at 4121.05.
• UK CPI lands at 06:00 UTC: f/c 3.4% y/y (prev 3.1%), core f/c 2.7% (prev 2.6%). A November BoE hike is 93-95% priced and cable sits at 1.33748 after the jobs rally, so the desk sees more room for a miss to move GBP than for an in-line print. ECB's Nagel (07:15 UTC) and Cipollone (08:00 UTC) follow.

Themes

UK CPI decides whether the GBP rally holds

Tuesday's jobs beat (unemployment 4.7% vs 4.9% f/c) took cable from about 1.3300 to just above 1.3400 and EURGBP to about 0.8395, near the 0.8393 year-to-date low. Cable has eased to 1.33748 and EURGBP sits at 0.83912. With a November hike 93-95% priced, an in-line print mostly confirms what is known, while a hot core reading is what would push pricing toward follow-up hikes.

Oil keeps steering the dollar and the metals

WTI is back at 100.21, close to its 100.49 day high, as US-Iran talks continue but Washington adds conditions. The desk links firmer oil to revived US inflation fears and Fed-hike bets, with an October pause ~84% priced and December the live debate. That is the pressure on gold at 4121.05 and silver at 57.405, and it is also what has supported CAD near one-month highs.

EUR boxed under 1.1250 before the ECB speakers

EURUSD is at 1.12236, still below the 1.1250 cap it has topped five times this month without a sustained break. The French fiscal and protest premium and a soft ZEW offset hawkish ECB repricing. Nagel, Cipollone and the Buba report fill the morning, with Lagarde at 16:30 UTC the swing factor after this window.

What moved

• XTI/USD +0.93% Crude recovered after a diplomat called the 'close deal' reports wrong and Iran's Araghchi said indirect talks via Pakistan and Qatar continue, with the API draw of -4.93M (f/c -1.3M) adding support.
• XAG/USD −1.02% Silver slipped below $57.50 in Asia as firmer oil revived US inflation and Fed-hike concerns, though it stays inside its one-week range.
• AUD/NZD +0.43% AUD remains the strongest major (0.47) after RBA Deputy Governor Hauser said the inflation outlook looks worse than forecast, while NZD, the weakest (-0.29), softened below 0.5700 ahead of Q3 CPI.
• JP225 −0.66% No single clear driver in our news feed.

Releases

• JPY Merchandise Trade Balance Total -536.6B¥. The desk reads it as a mild yen negative, but USDJPY is only 0.01% higher on the day at 158.18, with its range at 0.43x normal.
• JPY Imports (YoY) 18.9%. There was no visible FX reaction, and USDJPY held inside its 158.041–158.39 day range.
• JPY Adjusted Merchandise Trade Balance -704B¥. The narrower adjusted gap offset some of the headline miss, and the yen crosses stayed tight, with EURJPY 0.08% lower on the day.
• JPY Exports (YoY) 16.7%. Export growth missed clearly, yet the yen was little changed; JP225 fell 0.66% since the last note, though our feed does not tie the move to this print.

Levels to watch

• GBP/USD 1.3371 H4 support at the top of the broken multi-week range; price is sitting just above it into CPI.
• GBP/USD 1.3400 H4 resistance at the swing high where the post-jobs uptrend stalled.
• EUR/USD 1.1250 H4 resistance at the cap of a compressing consolidation, inside a broader D1 downtrend.
• AUD/USD 0.7015 D1 resistance at the top of the three-week 0.6894–0.7015 range, now being pressed with H4 RSI at 72.

Ahead

• 06:00 UTC GBP Consumer Price Index (YoY) The forecast is 3.4% vs 3.1% previously, and with a November BoE hike 93-95% priced, a miss has more room to move GBPUSD, EURGBP and GBPJPY than an in-line print.
• 06:00 UTC GBP Core Consumer Price Index (YoY) The 2.7% forecast (prev 2.6%) is the cleanest test of MPC member Greene's view that wage disinflation has stalled, and the print most likely to shift follow-up hike pricing for GBP.
• 06:00 UTC GBP Consumer Price Index (MoM) The forecast is 0.3% after 0.5%, which feeds the same BoE read for sterling crosses and UK100 into the London open.
• 06:00 UTC GBP Retail Price Index (YoY) The forecast is 3.9% vs 3.4% previously, a secondary inflation gauge released alongside CPI for GBP.
• 06:00 UTC GBP Producer Price Index - Output (MoM) n.s.a The forecast is 0.7%, unchanged from previous, giving a read on pipeline price pressure behind the CPI numbers.
• 07:15 UTC EUR ECB's Nagel speech This is the first of the morning's ECB voices, and any clear tightening signal would test EURUSD's 1.1250 cap before Lagarde speaks at 16:30 UTC.
• 08:00 UTC EUR ECB's Cipollone speech A growth- or fragmentation-focused tone would meet less resistance in EUR than hawkish talk, given the French fiscal premium capping rallies.
• 10:00 UTC EUR German Buba Monthly Report The Bundesbank's take on German growth and inflation is a medium-impact input for EUR and the ECB debate before the Oct 29 meeting.

UK core CPI against the 2.7% forecast, and how cable trades around 1.3371 H4 support afterwards, is the thread to follow until the next briefing, with no US data scheduled in this window.