The dominant macro driver overnight was a sharp escalation in Middle East geopolitical risk, with Houthi attacks on Saudi energy infrastructure and ongoing US-Iran conflict pushing Brent crude to $99.06/bbl — its highest level since late July — and WTI to $94.02/bbl, both up nearly 2.9% on the session. This energy shock fed directly into inflation expectations, lifting the 2-year US Treasury yield 3bp to 4.37% and the 10-year 1bp to 4.78%, levels not seen in nearly three years, which in turn repriced Fed policy expectations with September rate-hike odds moving toward 60% ahead of this week's critical NFP print (forecast: 55K; prior: -23K) and subsequent CPI/PPI releases. Copper simultaneously hit record highs at $6.778/lb, up 2.74%, reflecting both AI infrastructure demand and supply disruption fears, while gold slipped 0.54% to $4,405.80/oz as real yields climbed.
For Asia-Pacific, the cross-asset pressure is concentrated across several fault lines simultaneously. The yen's move to 154.0/USD — a seven-month high reflecting BoJ normalization expectations rather than safe-haven demand alone — is a direct headwind for Japanese exporters, as evidenced by broad losses in Nikkei electronic components names including Murata Manufacturing (-7.83%), Taiyo Yuden (-7.92%), and Alps Alpine (-8.29%), even as the index itself closed up 2.12% led by domestic and energy names. The CNY firmed 0.17% to 6.6992 against the dollar, consistent with PBOC management amid strong August export data (+25% YoY), while the Korean won strengthened 0.24% to 1,340.39 as KOSPI surged 4.61% on chipmaker inflows. Australian energy names are the clearest regional beneficiary of the oil spike, with the ASX energy sector leading gains at +1.78%, though the broader ASX 200 was near flat at 9,010.9 as higher oil feeds domestic inflation concerns.