Different Month, Same Oil Story

• US-Iran tensions escalated sharply, with both sides targeting vessels and energy infrastructure. Brent surged above US$100/bbl to a high of US$101.50, reviving concerns that a prolonged conflict could feed more broadly into inflation.
• US Treasury yields moved higher as oil and supply concerns pressured bonds. The 10-year yield rose around 4–5bps to 4.83%, with the long end also hit by disappointment over the Treasury’s smaller-than-expected US$6bn buyback.
• China’s inflation firmed in August, with CPI rising to 0.8% y/y and PPI to 3.8% y/y, largely driven by higher energy costs. For Australia, stronger regional cost pressures reinforce the risk that elevated oil prices keep imported inflation sticky.
• Ahead today: Australia’s Melbourne Institute inflation expectations will be closely watched for signs expectations remain anchored amid renewed energy pressures. CBA Wage and Labour Insights are also due over the coming days, with US PPI and weekly jobless claims due tonight.