Central banks remain in a coordinated hawkish phase, with the Fed holding at 3.75–4.00% this month but signalling a further 25bp hike in December following a hot September CPI print of 3.7% year-on-year. The ECB (deposit rate 2.50%), BoJ (1.25%), and RBA (4.60%) have all moved recently, with additional hikes priced into late 2026 across all four major institutions. Geopolitical risks centred on Middle East supply disruptions drove Brent crude as high as US$110 per barrel over the weekend, supporting energy equities globally while stoking further inflation concerns. Risk sentiment on Monday showed a constructive rotation back into technology and consumer discretionary after last week's AI-led sell-off, with the VIX falling 7.75% to 18.44 signalling a meaningful reduction in near-term fear.
For Asia-Pacific markets opening today, the combination of a softer VIX, a rebounding Nasdaq (+1.11%), and China's Q3 GDP beat creates a broadly supportive backdrop, particularly for resource exporters and financials. The AUD firmed 0.16% to 0.6983 against the USD, aided by stronger China data and recovering iron ore prices above US$91 per tonne, which is a direct positive for ASX miners. However, the US 10-year yield holding above 5.09% and Brent crude near US$109 per barrel keep cost-of-capital and inflation pressures in focus, particularly for rate-sensitive ASX sectors such as REITs and utilities. The sharp fall in the Nikkei VIX (–10.96%) and ASX VIX (–10.83 to 10.83) underscores regional confidence improvement, though the busy US earnings calendar this week — Meta, Tesla, Netflix — introduces headline event risk overnight.