US strikes on Iran push oil and yields higher

• The US military says it is bombing Iranian military targets around the Strait of Hormuz, as President Trump declared the ceasefire with Iran over, sending Brent crude briefly above US$80/bbl.
• Concerns over a prolonged conflict flowed through to rates, with the US 10-year Treasury yield rising 5bps to 4.58% and the 2-year adding 6bps to 4.22%.
• FOMC minutes, showed some members saw a case for hiking in June before ultimately backing the decision to hold, with the tone echoing caution on the inflation outlook; markets have a full hike priced by the October meeting.
• Domestically, only 65% of an RBA hike is priced, signalling that while there may be one hike to go, the path from here remains uncertain and we may well have reached the top of the cycle.