Daily Updates

Financial market sentiment deteriorated further overnight as a sharp rise in oil prices, driven by escalating Middle East tensions, added to inflation concerns and reinforced expectations of further monetary tightening.

The selloff on Wall Street continued as escalating US-Iran strikes lifted oil prices further, intensifying inflation concerns and pushing US Treasury yields higher ahead of key US inflation data.

US equities fell overnight after Monday’s public holiday, as escalating Middle East tensions pushed oil prices higher. Short-dated US Treasury yields rose as higher oil prices added to inflation concerns and reinforced expectations that the Fed may need to lift rates further, while the 10-year yield was volatile but ended little changed.

With Wall Street closed for the Labour Day holiday, US physical equity markets were unchanged, although S&P 500 futures edged lower. The US Treasury market was also closed overnight, but yields moved higher when trading resumed this morning. Oil prices rose further, adding to concerns about renewed inflationary pressure.

US equities fell and Treasury yields rose after traders viewed the better-than-expected US employment report for August as increasing the probability of a Fed rate increase next week.

US equities rose again overnight as traders scaled back expectations for a September Fed rate hike following comments from Governor Christopher Waller.