Monday's session was dominated by three interlocking forces: a sharp surge in US Treasury yields (the 10-year reaching 5.23%, its highest since 2007), renewed US-Iran geopolitical tensions after President Trump rejected Tehran's proposal to reopen the Strait of Hormuz, and a clutch of central bank decisions that left policy rates on hold but with diverging forward signals. The Bank of England held at 3.75% in a surprisingly narrow 5-4 vote — lifting March cut odds to nearly 50% — while the ECB kept rates unchanged and maintained its meeting-by-meeting, data-dependent stance amid eurozone inflation that has eased to 1.7% but growth that remains resilient. Risk sentiment deteriorated broadly, with the VIX jumping 8.07% to 16.07, though pockets of AI-related enthusiasm offered a partial offset. Boeing shares fell close to 7% after the FAA delayed certification of the 737 Max 10 on a software issue, adding single-stock weight to the broader risk-off tone.
For Asia-Pacific markets opening Tuesday, the combination of elevated US yields, oil price volatility (Brent briefly above $100/bbl before settling at $98.54), and a softer Wall Street close sets a cautious tone. The AUD held relatively firm at 0.7021 against the USD — up 0.17% — providing some buffer for local sentiment, but the ASX 200 faces headwinds from the US selloff and weakness in gold (down 3.83% to $4,155.90/oz), silver (down 4.83%), and lithium carbonate (down 5.11%), all of which bear directly on the resources-heavy local index. The dominant event for Australian investors today is the RBA's 14:30 AEST decision, where the cash rate is forecast to rise 25 basis points from 4.35% to 4.60%, which would reinforce the higher-for-longer rate narrative and place additional pressure on rate-sensitive ASX sectors including REITs, utilities, and consumer discretionary.