⏱️ ~4 min read

📊 Today's Numbers

• Brent Crude ▲ $107.35/bbl (peak $108.83): highest since crisis began

• WTI ▲ $94.14/bbl: U.S. gasoline already above $5.90/gallon nationally

• RBA Cash Rate ▲ 4.60%: highest since 2011, war cited explicitly

• USD/JPY ■ ~157.40: rallied then retraced after Tokyo's warning

• U.S. 10-yr Yield ▲ 5.27%: first time above this level since 2007

• Shanghai Composite ▼ 3,859 (−0.80%): profits data hit a wall in August

🛢️ COMMODITIES

Trump Rejects Iran's Hormuz Plan. Brent Hits $108.83.

Iran offered seven days to reopen the strait. The White House said no. One-fifth of global oil and LNG supply stays choked off, and oil markets priced in the consequences instantly.

• Brent peaked at $108.83/barrel in Asian trading Monday before settling near $107.35, up more than 3% on the session

• WTI rose to $94.14, with U.S. retail gasoline already averaging above $5.90/gallon nationally before this move

• Saudi Arabia's East-West pipeline is back online after the Houthi attack, but Red Sea freight costs remain elevated for Asian importers, so the relief is partial at best

• Trump signalled strikes on Iran could resume after November's midterms, meaning the market can't price in a near-term diplomatic off-ramp

🏦 MACROECONOMIC

The RBA Just Raised Rates and Blamed the War

Australia's central bank lifted its cash rate to 4.60% on Tuesday, the highest since 2011. The statement didn't bury the lead: energy prices are "much higher than assumed in the August forecasts," and the Middle East conflict is the reason.

• A 25bp hike to 4.60% takes effect immediately, adding roughly AUD 50–80 per month to a typical AUD 500,000 variable-rate mortgage

• The RBA also flagged AI-driven tech goods inflation alongside energy costs, meaning the price squeeze is hitting from two directions at once

• AUD/USD held near $0.70, but with the Fed likely hiking again in October, the rate gap between the U.S. and Australia has narrowed enough that the Aussie dollar isn't going to cushion import prices much

💱 CURRENCIES

Japan Is One Bad Print Away From Intervention

Tokyo's top currency official told markets on Monday to take their warning "at face value." The yen briefly broke through 157 on the comments, then drifted back to 157.40 by Tuesday's Asian session. That retracement tells you everything about what the market actually believes.

• USD/JPY moved from ~157.50 to ~156.65 immediately after the remarks, then retraced to 157.40, showing how thin verbal intervention's grip is without a rate-gap to back it up

• The Bank of Japan is already at 1.25%, a 31-year high, and it hasn't been enough, because the Fed's funds rate is sitting between 3.75% and 4.00% and may go higher in October

• CME FedWatch put the probability of an October Fed hike above 70% as of Monday, meaning the U.S.-Japan yield gap isn't closing anytime soon, and traders know it

📰 Also Today

• U.S. 10-year Treasury yield hit 5.27% on Monday, up 11 basis points intraday and the highest since June 2007, as the rejected Hormuz deal stoked inflation fears and pushed the probability of an October Fed hike from 57% to above 70% in a single week.

• China's industrial profits grew just 4.2% year-on-year in August, down sharply from 11.2% in July and the weakest monthly reading this year, sending the Shanghai Composite down 0.80% to 3,859 and the Shenzhen Component down 2.10% to 13,033 on Monday.

• The Bank of Jamaica raised its policy rate 50 basis points to 6.0%, effective today, after headline inflation reached 7.9% in August — versus 1.2% a year earlier — with the MPC citing both the Middle East conflict and El Niño-driven crop failures compounding the squeeze on Jamaican consumers.

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Not investment advice. For informational purposes only.