- The RBA is the main focus heading into tomorrow’s decision, with markets pricing around an 85% chance of a hike. A move would mark the fifth hike this calendar year and take the cash rate to 4.85%, although market pricing for the terminal rate implies no further hikes beyond this.
- Tech led a sell-off on Friday, with the Nasdaq falling 2.9% on concerns over ambitious AI investment plans among hyperscalers amid declining free cash flow.
- Safe haven demand supported Treasuries as risk-off sentiment took hold, although higher oil prices capped gains. The 2yr yield fell 6bps to 4.59%, while the 10yr eased just 1bp to 4.93%.
- Brent futures settled at US$118/bbl as oil pushed higher last week on the prospect of further supply disruptions. President Trump has repeatedly threatened to restart strikes on Iran after the US midterm elections, and Persian Gulf nations were notified last week to prepare for a short, intense military campaign in the region.
