FX-Commodity Link: AUD-Iron Ore, CAD-Oil, NZD-Dairy Correlations

US inflation data released May 13 showed core CPI and producer prices above expectations, driven by energy costs linked to the Iran-Middle East conflict; the hot print is lifting long-bond yields to 5% and forcing markets to price extended Fed rate-hold expectations, pressuring risk-on assets.

Iran-Israel conflict has severed oil flows through Strait of Hormuz, cutting global supply by 6 million barrels per day in Q1 2026. Energy importers face margin compression; crude prices rally while refineries struggle with feedstock shortages. Fitch downgraded Bangladesh outlook to negative citing Middle East vulnerability.

US CPI and producer prices exceeded expectations on May 13, with core inflation stickier than forecast and energy costs surging due to Middle East conflict. Markets repriced Fed rate-cut odds lower; investors now expect the central bank to hold rates through 2026 despite earlier pivot hopes.

Air New Zealand forecasts a full-year loss citing surging jet-fuel costs from the Middle East conflict, joining other carriers in facing severe margin compression. The energy shock is spreading across transport and logistics as crude supply disruptions ripple through global supply chains.

US producer prices jumped 6% year-over-year in April 2026, the fastest pace since 2022, driven by Middle East conflict-induced energy surges. Stickier-than-expected inflation is forcing the market to recalibrate terminal-rate expectations lower and pressuring long-duration bonds and equities.

The Iran war has cut crude and fuel flows through the Strait of Hormuz by nearly 6 million barrels per day in Q1 2026, a seismic energy shock that has reignited inflation fears and forced US long-bond yields above 5% for the first time since 2007. Energy importers face margin pressure, while producers, defence contractors, and hard asset beneficiaries see valuations reassessed upward.

US inflation data released May 13 came in hotter than expected, with the producer price index rising 6% year-over-year and energy costs spiking, pushing traders to price in prolonged Fed pause. Fed officials including Boston Fed's Collins signaled holding rates for an extended period, pressuring equities and lifting long-bond yields to 5% for the first time since 2007.

Crude oil and refined fuel flows through the Strait of Hormuz fell by nearly 6 million barrels per day (29%) in Q1 2026 following the Iran conflict, creating a structural energy shock that is lifting global inflation and pressuring growth outlooks in energy-importing nations including Turkey and Pakistan.

US producer prices jumped 6% year-over-year in April, the fastest pace since 2022, driven by energy costs tied to the Iran conflict. 10-year Treasury yields hit their highest level since July, forcing investors to re-price rate-cut expectations with Fed now seen on hold longer.

The May 13 producer price index print of 6% year-on-year inflation, fastest since 2022, and rising energy costs from the Iran conflict are pushing the 10-year Treasury yield to its highest level since July and delaying expectations for Fed rate cuts. Core inflation remains sticky, pressuring real yields and challenging soft-landing narratives.

Energy flows through the Strait of Hormuz fell nearly 30% in Q1 2026 following US-Iran escalation, pushing crude higher and inflation expectations upward. Global central banks now face stagflation risks as oil-importing economies face margin compression and geopolitical risk premiums.

US wholesale prices surged 6% year-over-year in April, the fastest pace since 2022, sending 10-year Treasury yields to their highest level since July. Core inflation remains sticky, forcing Fed pivot expectations to recalibrate and pressuring risk-asset valuations across equities.

US wholesale inflation accelerated to the fastest pace since 2022 in April, with the PPI rising 6% year-over-year as energy costs spiked. The 10-year Treasury yield climbed to 5%, the highest since 2007, as traders repriced expectations for delayed Fed rate cuts. This inflation shock ripples across equities, FX, and commodities as macro bets reset.

Fervo Energy Co. raised $1.89 billion in an upsized IPO and opened 33% above its offering price, capitalizing on investor hunger for clean energy alternatives amid Iran war-driven supply chain disruption and elevated crude prices.

US wholesale inflation (PPI) rose 6% year-over-year in April, the fastest pace since 2022, driven by surging energy costs. The 10-year Treasury yield jumped to its highest since July, signaling that market expectations for Fed rate cuts have been pushed back and stagflation risks are rising.

Fervo Energy raised $1.89B in a upsized IPO and shares opened 33% above offer price on May 13, as the Iran war-driven oil supply shock and rising energy prices propel institutional capital into renewable energy alternatives and infrastructure plays.

US wholesale inflation accelerated to the fastest pace since 2022 in April, with the producer price index up 6% year-over-year. Higher energy prices from the Iran war are pushing inflation expectations higher, forcing the Fed to extend the hold on rates and treasury yields to multi-month highs.

Morgan Stanley issued a bullish call on Ford Motor, highlighting the automaker's emerging energy storage business as a high-margin growth driver. Ford shares surged following the report, signaling investor appetite for diversified auto revenue streams beyond traditional combustion engines.

The Iran-Israel conflict has reduced crude flows through the Strait of Hormuz by nearly 30% in Q1 2026, the lowest quarterly level on record. This energy shock is pushing Brent crude above $95, straining global supply chains and forcing central banks to raise inflation forecasts, with consequences for consumer spending and geopolitical risk premiums.

US wholesale inflation (PPI) rose 6% year-over-year in April, the fastest pace since 2022, driven by surging energy prices tied to the Iran conflict. The 10-year Treasury yield jumped to its highest level since July, signaling traders are pricing in a delayed Fed pivot and sticky inflation that could keep rates elevated through 2026.

The Iran-US conflict has choked off Strait of Hormuz flows (down 6M barrels/day in Q1), pushing crude and energy input costs higher across automotive, industrial, and agriculture. Supply chain volatility reached its highest level since 2022 as firms stockpile to hedge against further price spikes.

US producer prices surged 6% year-over-year in April, marking the fastest pace since 2022, as energy costs spike from the Iran conflict. The 10-year Treasury yield climbed to its highest since July, signaling extended rate holds and delaying Fed rate-cut expectations.

Oil flows through the Strait of Hormuz fell nearly 6 million barrels per day in Q1 2026, the sharpest decline since the Iran conflict began, pushing crude prices higher and triggering margin compression for energy-importing nations. Pakistan, Bangladesh, Turkey and other emerging markets face inflationary headwinds and central bank policy tightening.

US wholesale inflation surged in April to its fastest pace since 2022 with PPI up 6% year-over-year, driven by energy shocks. The 10-year Treasury yield hit its highest since July, reaching 5%, as markets reprice expectations for Fed rate cuts and hold duration longer. Energy-driven inflation is pressuring USD and equity valuations.