Australian Stocks Slip Amid Oil Price Surge and High Inflation Fears

A surge in oil prices following a Houthi strike on Riyadh has put Australian stocks on the back foot at the open.

Brent crude is nearing $104 a barrel, which can have mixed effects on sharemarkets. On one hand, it benefits energy producers, but on the other, it raises fuel and transport costs, keeping headline inflation 'uncomfortably sticky'.US interest-rate expectations, still setting the tone globally, remain restrictive due to high inflation across all sectors.

According to Neel Kashkari, who leads the Minneapolis Fed, US inflation is too high. This reinforces the idea that rates may stay higher for longer, which in turn lifts bond yields and the 'discount rate' used to value future corporate profits.