Geopolitical Tensions Fuel Oil Price Surge Ahead of US Inflation Data

Geopolitical tensions are on the rise as markets await key US inflation data. Oil and gold prices have climbed, while regional shares edged higher amidst the uncertainty.

The US and Yemen's Iran-aligned Houthis reported separate attacks on shipping, with four crew members killed in a Houthi strike on Tuesday. This marks the first fatalities from a Houthi attack since February 28.

North Korea fired a ballistic missile off the Korean Peninsula's east coast, coming days before major joint military exercises between Seoul and Washington.

The US consumer price index (CPI) data will be released later in the session, with markets expecting a 0.1% increase in July after falling 0.4% in June. Annual CPI inflation is forecast to slow to 3.4% from 3.5% a month earlier.

Market sentiment remains lukewarm amidst lingering geopolitical risk and expectations for a potential Federal Reserve rate hike, with some analysts predicting an early rate hike in Japan putting pressure on the nation's shorter-dated bonds.