Risk sentiment was restrained overnight as US-Iran negotiations over the Strait of Hormuz hit a fresh impasse, with Washington introducing new demands for Iranian compensation that derailed progress and sent Brent crude touching near $90 per barrel before settling around $89.29. The geopolitical uncertainty provided a clear tailwind for energy and defensive sectors while pressuring broader risk assets, with the S&P 500 slipping 0.32%, the Nasdaq off 0.60%, and the VIX easing modestly to 15.28 — suggesting contained but watchful anxiety. The RBA held its cash rate unchanged at 4.35% on August 11 in line with market expectations, reinforcing a cautious central bank posture that mirrors Fed Chair Kevin Warsh's commentary on sticky inflation pressures globally. US Treasury yields pushed higher across the curve — the 10-year adding 7 basis points to 4.72% and the 30-year reaching 5.25% — reflecting pre-CPI nervousness and ongoing energy-driven inflation concerns.
For Asia-Pacific markets opening Wednesday, the combination of elevated oil prices, higher US yields, and a still-unresolved Hormuz situation creates a mixed but energy-positive backdrop. The ASX 200 faces modest pressure from Wall Street's softer close, though the AUD/USD holding near 0.7065 and iron ore ticking up 0.11% to $94.55 per tonne provide some support for resource exporters. The Nikkei's strong prior session gain of 2.08% and the Nikkei VIX collapsing 16.37% to 24.99 signal a sharper recovery in Japanese risk appetite, while Hong Kong and Shanghai both closed higher — SSE up 0.67% and HKEX up 1.05% — offering a constructive regional read-through. The critical event for Australian investors today is tonight's US CPI print at 22:30 AEST, with consensus expecting headline CPI at 3.4% year-on-year and core at 2.5%, which will materially shape the near-term rate and risk narrative.