Fed Chair Kevin Warsh's keynote at the Jackson Hole symposium on Friday 28 August set the dominant tone for global markets, with Warsh explicitly stating the Fed would 'have work to do' if confidence in inflation moving toward the 2% target remained elusive — shifting market pricing to a 50–60% probability of a September rate hike. This hawkish pivot lifted US 10-year Treasury yields to 4.67% and the 30-year to 5.19%, pressuring rate-sensitive equities and reinforcing USD strength, even as blockbuster AI-driven earnings from NVIDIA, Salesforce, and CrowdStrike provided a partial offset in tech. Compounding the inflationary backdrop, reports of US-Iran exchanges in the Gulf pushed Brent crude toward the $90/bbl level, adding a geopolitical risk premium to global energy costs. European inflation data — notably Spain's headline CPI accelerating to 4.5% in August, the fastest since 2023 — reinforced the view that price pressures remain a global rather than purely US phenomenon.
For Asia-Pacific markets opening this Monday, the combination of elevated global yields, a firmer USD, rising oil prices, and residual risk-off sentiment from Warsh's remarks creates a cautious backdrop. The ASX 200 closed Friday down 0.98% and is opening into a week where domestic investors must weigh the RBA's 4.35% cash rate hold against still-sticky trimmed mean CPI of 3.6%, while commodity-linked names face crosscurrents — energy names may benefit from Brent near $90, but gold's sharp 2.85% decline to US$4,478/oz and copper's softness are headwinds for diversified miners. Asian equity benchmarks — the Nikkei, Hang Seng, and SGX — all finished Friday lower, and early Monday price action reflects ongoing caution as investors await further clarity on the Fed's September decision.