Geopolitical Tensions Fuel Inflationary Pressures

The conflict in Iran is contributing to a rise in crude oil prices toward $100 a barrel, sparking fresh inflation fears. Advisers have suggested the conflict could be prolonged, though President Trump has stated the war could end after the US midterm elections and remains open to talks.

Global Central Banks Maintain Hawkish Outlook

Amid rising inflation worries, the European Central Bank is expected to implement an interest rate hike. Similarly, a recent poll indicates the Bank of Japan may raise its rates more quickly than previously anticipated, while markets await key inflation data for insight into the Federal Reserve's future policy.

Rising US Yields and Dollar Action Drive Markets

US 10-year Treasury yields have surged to their highest levels since 2023, a move that is underpinning the US Dollar against currencies like the New Zealand Dollar. Despite the broader trend of rising yields, gold rebounded to near $4,400, snapping a three-day losing streak as it found support from a temporary dip in the US Dollar ahead of producer price inflation data.