Middle East Tensions Fuel Oil Price Surge Amid Global Market Volatility
Oil prices surged overnight after fresh attacks on Middle East energy infrastructure, including reported US strikes near Iran's key export hubs at Kharg Island and Jask. This escalation has sparked concerns about global supply chains and sent oil prices climbing.
US crude gained over 1% while Brent crude approached USD100 a barrel, its highest level since late July. The increase follows similar gains in recent days, driven by tensions between the US and Iran.
The geopolitical uncertainty is not limited to oil markets, as global equities also took a hit. The Dow Jones dropped 0.8% while the tech-focused Nasdaq lost 0.6%. Meanwhile, bond yields continued to climb, with the benchmark 10-year Treasury yield reaching its highest level since October 2023.
The Australian and New Zealand dollars were among the currencies affected by the geopolitical jitters, with both AUD/USD and NZD/USD experiencing losses. The kiwi's recent sell-off continues, with NZD/USD falling 0.2%. In contrast, China's consumer inflation rose 0.8% y/y in August, driven by higher energy costs and firmer food prices.