Markets Whiplashed by Hormuz Headlines

• The weekend delivered a sharp shift in tone, with conflicting updates around the Strait of Hormuz – initially seen reopening before reversing – driving volatility and pulling risk sentiment lower.
• The sequence of events reinforces how uncertain the backdrop remains, with no clear line of sight on a lasting ceasefire, and markets continuing to react to each new development.
• In rates, pricing for a May RBA move edged higher into Friday, with just under 20bps priced, after Hauser and Hunter struck a firmer tone in Washington. They pointed back to the inflation backdrop before the conflict as something relevant for the RBA decision making.
• The week ahead is relatively quiet locally, with attention turning offshore to US retail sales and University of Michigan sentiment, along with Japan CPI, while any updates out of the Middle East will remain front of mind for markets.