Geopolitical risk remains the dominant macro driver as the unresolved Strait of Hormuz standoff with Iran pushed Brent crude above $89/bbl — touching $90 intraday before partial de-escalation signals offered modest relief. The Fed held the funds rate at 3.50–3.75% but the 9-3 vote, the most hawkish split in nearly a decade, signals that the easing cycle is firmly over; Cleveland Fed President Beth Hammack has flagged more than one hike may be needed, reinforcing the higher-for-longer narrative that is now shared by the ECB (deposit rate at 2.25%) and the Bank of England (rate at 3.75%). Wednesday's US CPI print at 08:30 ET is the single most important data release of the week, with consensus expecting headline CPI at 3.4% y/y and core at 2.5% y/y — any upside surprise in the context of the oil spike could reprice Fed hike expectations sharply higher.
For Asia-Pacific investors opening their platforms this morning, the cross-asset picture is mixed but skewed cautiously negative for risk assets: US Treasury yields surged again overnight (10-year +7bp to 4.72%, 30-year at 5.25%), tightening the global discount rate backdrop and punishing rate-sensitive sectors including REITs and long-duration technology names. The RBA held at 4.35% in a decision read as hawkish, keeping domestic financial conditions tight, while the ASX 200 closed Tuesday at 9,250.6 — just off recent highs — supported by energy strength but capped by weakness in consumer and technology names that mirrored the US session; the ASX VIX at 10.37 suggests local implied volatility remains benign, though the CPI release tonight (AEST) is a live risk event that could reset the tone sharply.