Australia Stocks Set to Rise as Oil Prices Jump Amid Global Disruption

Australia's stock market is poised to rise as oil prices surge following attacks linked to Yemen's Houthi movement and Iran, as well as a shutdown of Saudi Arabia's key East-West pipeline.

The potential disruption to global oil supply has sent oil prices jumping, which can quickly translate into an inflation story. If the East-West pipeline remains offline, estimates suggest that up to 4% of global oil supply could be at risk, leading to higher fuel, transport, and freight costs.

This development puts a spotlight on the Reserve Bank of Australia (RBA), as investors await Assistant Governor Sarah Hunter's speech today for insight into how policymakers are weighing inflation risks versus a slowing economy. If markets conclude that higher energy prices will keep inflation sticky, they may push expected rate cuts further out, which could show up in higher Australian government bond yields.

Company news is also in focus, with FleetPartners Group receiving three revised takeover proposals and REA Group reaching a court-enforceable agreement with the Australian Competition and Consumer Commission over subscription offerings concerns.