Oil Reclaims $100 as Conflict Escalates

• The Middle East conflict has moved into its second week, with rhetoric from Tehran intensifying. Iran’s Supreme Leader Mojtaba Khamenei said the Strait of Hormuz should remain closed and hinted the conflict could widen.
• Oil reacted quickly. Brent crude pushed back above $100/bbl after dipping below $95 earlier in the week. A plan by IEA members to release roughly 400mb from strategic reserves offered some relief, though markets largely shrugged it off.
• In rates, US Treasuries sold off as higher oil prices revived inflation concerns. The 10-year yield rose to around 4.26%, while the 2-year jumped about 10bps to trade above 3.70%, reflecting renewed uncertainty around the Fed’s rate path.
• Locally, Commonwealth Bank’s Household Spending Insights for February pointed to softer consumer activity, with the index recording its first monthly decline since September 2024.
• The pullback was broad-based, with spending falling across around half of the categories, early signs that households are becoming more cautious as cost pressures build.