Risk sentiment improved markedly on Tuesday as softer US jobs data pushed back Fed rate hike odds — CME FedWatch now prices just a 22% chance of an October hike — allowing long-dated Treasury yields to retreat from multi-decade highs, with the 10-year settling around 5.31% after earlier touching levels last seen in 2002. Oil prices stabilised with WTI near $89.82 and Brent above $101, while gold held firmly above $4,190 per ounce, reflecting residual geopolitical and fiscal risk premia tied to Middle East supply dynamics and France's sovereign debt stress, where OAT-Bund spreads had briefly spiked to 15-year highs near 150-158 basis points before partially narrowing. The euro rebounded from 17-month lows near $1.127 as French bond jitters eased, and the VIX fell 3.29% to 15.01, signalling a broadly constructive near-term backdrop. Fed minutes from the September meeting are due Wednesday, which will be the next key directional input for rates markets globally.
For Asia-Pacific markets, the overnight Wall Street record closes — S&P 500 at 7,818.93 and Nasdaq at 27,599.79 — alongside a softer VIX and a firmer AUD/USD at 0.6985 provide a positive handover, particularly for resource and financial names on the ASX. The Nikkei's 2.40% surge to 69,946 reflects strong tech momentum, though BOJ Governor Ueda speaks at 17:35 AEST today and any hawkish commentary on the yen — currently at 158.16 versus the dollar — could introduce intraday volatility across Japanese and regional equities. Iron ore at $91.45 per tonne remains under seasonal and inventory pressure from China's Golden Week period, which is a near-term headwind for Australian bulk commodity exporters, though UBS has raised its long-term iron ore forecast above consensus at $93 per tonne. Copper's 1.09% gain to $6.6575 per pound and gold's 0.90% advance are constructive signals for the broader ASX materials complex heading into Wednesday's open.