Risk sentiment improved overnight as diplomatic signals around the US-Iran situation drove a sharp pullback in oil prices, with Brent briefly dipping below $100 per barrel and WTI trading around $93–96 on reports of Iran potentially reopening the Strait of Hormuz and Saudi Arabia restarting East-West pipeline flows. US Treasury yields eased modestly, with the 10-year settling near 4.96% — down 5 basis points — providing some relief from recent highs as lower energy prices reduce near-term inflation pressures. However, Fed speakers including Richmond Fed President Barkin cautioned that the economy is firming beyond AI and data centres into defence and manufacturing, and that further rate hikes remain possible following last week's 25 basis point increase. The Bank of England held rates at 3.75% in a narrow 5-4 vote, while the ECB maintained its data-dependent stance, keeping global policy uncertainty elevated.
For Asia-Pacific markets opening today, the combination of falling oil prices, easing US yields, and a strong Nasdaq print — up 0.45% to a record 27,244 — sets a constructive but selective tone. The VIX fell 4.44% to 14.21 and the ASX VIX dropped 3.35% to 11.54, pointing to subdued volatility expectations domestically. The AUD/USD held essentially steady at 0.7118, offering little currency headwind for exporters, while copper surged 3.18% and gold firmed 0.38% to $4,400.50 per ounce, providing tailwinds for ASX materials and gold miners. Energy names face pressure from the oil selloff, while technology and gold-exposed stocks stand to benefit most from the overnight cross-asset moves.