Global markets are navigating a confluence of shocks heading into Friday: US-Iran tensions and tanker strikes in the Strait of Hormuz have driven Brent crude above $109/barrel, its highest since mid-2024, stoking fears of a sustained energy-driven inflation cycle extending well into 2027. The ECB responded on September 10 with a 25 basis point hike to a 2.5% deposit rate, with President Christine Lagarde explicitly flagging inflation as 'longer lasting' than previously anticipated, while the Fed faces its own hawkish reckoning with markets pricing a greater than 50% probability of a September rate rise following robust US jobs data. US Treasury yields continued to climb — the 10-year reached 4.83% and the 30-year 5.28% — compressing risk appetite across equities globally, with the VIX jumping 8.38% to 17.84, signalling a meaningful uptick in near-term uncertainty.
For Asia-Pacific markets opening today, the dominant cross-asset signal is one of caution: Wall Street closed broadly lower, European bourses fell to two-month lows, and rising oil costs threaten to reignite import-cost pressures across energy-dependent economies in the region. The AUD has weakened 0.84% to 0.716 against the USD, which provides a partial buffer for Australian resource exporters but adds to inflation import concerns for the RBA, already having hiked three times this year to 4.35%. ASX futures were pointing to a softer open, with iron ore holding near $99.37/t on restocking hopes offering some support to the materials complex, though a sharp 8.38% VIX spike and broad commodity sell-offs in metals like copper (-4.12%), silver (-5.68%) and platinum (-6.86%) suggest risk-off conditions will dominate the session.