Geopolitical Tensions Ease, But Caution Remains

• Risk sentiment improved as fears of wider conflict between Israel and Iran faded, with signs of possible diplomatic engagement helping settle markets.
• This week is central bank-heavy, with the Fed expected to keep rates steady. Focus will be on its updated projections and any signals from Chair Powell on policy timing.
• The US 10-year Treasury yield rose 5bps to 4.45%, still well-off last month’s highs, while Australia’s 10-year yield sits at 4.24%.
• Domestically it’s a quiet data day, but in the US, retail sales and industrial production data are due overnight—both key inputs to assess if tariffs are impacting the US economy.