Geopolitical tensions centred on the Middle East and risks around the Strait of Hormuz drove Brent crude to an intraday high near $112/bbl before it partially retraced to close around $108.90/bbl, keeping energy-led inflation in sharp focus for central banks. The ECB — having hiked its deposit facility rate 25bp to 2.50% in September — is now seen as likely to move again in December, while RBA Assistant Governor Christopher Kent flagged rising neutral rates and the Fed is expected to hold or hike modestly into year-end, reinforcing a global tighter-for-longer policy backdrop. US 10-year Treasury yields pushed another 6bp higher to 5.15% overnight, with the 30-year at 5.48%, reflecting persistent inflation anxiety rather than growth optimism. The VIX fell 6.13% to 17.31, suggesting near-term equity fear is subsiding, but elevated bond yields continue to act as a ceiling on risk appetite.
For Asia-Pacific investors opening today, the mixed Wall Street close — with the Dow and Russell 2000 outperforming while the Nasdaq barely held flat — signals a rotation away from pure-play technology and toward defensives, value, and small-caps, a theme that ASX investors should monitor closely in today's session. China's Q3 GDP print of 4.5% YoY, a modest beat on expectations, prompted the PBOC to hold benchmark rates steady rather than add stimulus, providing a muted rather than euphoric read-through for Australian resource exporters. The AUD caught a bid on both the China data and hawkish RBA commentary, lifting 0.43% to $0.7013, which offers some cushion for Australian investors but also reflects higher-for-longer domestic rate expectations. Iron ore's near-flat close at $90.95/t and BHP's weak Q1 copper output — down roughly 19% — are the two commodity signals most directly relevant to the ASX materials complex this morning.