Risk sentiment firmed broadly on Monday as the VIX fell 3.59% to 15.57, equity markets rallied across most regions, and gold surged 1.6% to a new high above $4,178 USD/oz — signalling that investors remain simultaneously risk-on and defensively positioned. The macro backdrop is shaped by five consecutive OPEC+ monthly output increases pushing Brent near pre-conflict lows in the low-$70s, a hawkish-hold Fed under new chair Kevin Warsh who declined to submit his own dot-plot projections, and a nascent El Niño agricultural supply shock threatening to reignite food inflation just as central banks were counting on softer energy prices to do the disinflation work. China's rare earths export curbs on Japan remain an unresolved structural fault line, with Washington actively pressing Beijing to ease restrictions on materials critical to EV motors and precision defence systems. The IMF's World Economic Outlook Update drops Wednesday and FOMC minutes follow the same day, meaning this week's macro calendar is backloaded with event risk that could reprice rate expectations across the board.
For Asia-Pacific markets opening Tuesday, the dominant cross-asset read is cautiously constructive but regionally divergent — the Nikkei VIX spiking 37.87% despite the Nikkei 225 itself gaining 1.47% suggests options markets are hedging sharply against yen-intervention risk and BOJ policy volatility after the benchmark rate was raised to 1%. The KOSPI's extraordinary 5.76% single-session surge reflects AI and chipmaking enthusiasm that has largely bypassed the ASX in 2026. The AUD/USD at 0.6959, up 0.32%, offers modest support for Australian exporters, while copper's 2.31% gain and silver's 3.14% advance point to metals tailwinds for the ASX materials sector — partially offset by aluminium's steep 4.41% fall and iron ore's marginal softness at $98.25/t. The RBA decision expected today is the single most critical domestic catalyst, with markets broadly pricing a hold at 4.35% but watching for any hawkish language that could reprice the Q4 hike probability.