Central banks maintained a tightening bias overnight as inflation pressures from elevated energy costs and AI-driven demand kept policymakers hawkish across major economies. The Fed's September hike to a 3.75–4.00% target range left markets pricing a hold at the late-October meeting but flagging a possible December move, while the ECB raised its deposit rate to 2.50%, the BoJ to 1.25%, and the RBA to 4.60%. French 10-year OAT yields hit 5% for the first time since 2002 on fiscal concerns and protests, widening OAT-Bund spreads and adding a fresh sovereign stress signal to an already complex macro backdrop. Geopolitical tensions tied to Iran-related conflict and disruptions around the Strait of Hormuz kept Brent crude anchored near $109–110 per barrel, sustaining upward pressure on global inflation prints.
Across asset markets, the US 10-year Treasury yield pushed to 5.15% — up 6 basis points — as strong corporate earnings competed with bond market anxiety, while the VIX fell 3.64% to 16.68, suggesting equity markets are selectively embracing risk. For Asia-Pacific, the picture is bifurcated: the Nikkei 225 fell 1.30% and the HKEX dropped 1.32%, while Korea's KOSPI was the standout laggard, plunging 3.73%, offsetting optimism from Japanese export strength. The AUD held firm at $0.7025 — up 0.26% — providing a modest tailwind for Australian offshore earners, but rising global yields and stubborn commodity price volatility will dominate the ASX open this morning.