Overview
- Renewed exchanges between U.S. and Iranian forces and reported attacks on ships near the Strait of Hormuz have heightened shipping risk and helped drive Brent crude above $100 per barrel.
- Global equities fell and benchmark government bond yields climbed to multiyear highs as investors reacted to the oil shock and related policy uncertainty.
- The U.S. Treasury announced a $6 billion long‑dated bond buyback that many traders found smaller than expected, which contributed to further selling in Treasuries and higher long‑term yields.
- The Japanese yen has strengthened sharply on expectations of faster BOJ tightening and repatriation flows, and markets are pricing roughly a 60% chance of a 25 basis‑point Federal Reserve hike at the mid‑September meeting.
- Beyond immediate market moves, analysts warn the oil premium could persist for months if Strait of Hormuz flows remain disrupted, raising costs for consumers and increasing the chance central banks will tighten policy further.