In the world of finance, we often witness a delicate dance between uncertainty and opportunity. Geopolitical tensions are one of those variables that frequently cast shadows of doubt on the financial landscape. Today, we aim to explore how these tensions create fear in the marketplace and why investors often seek refuge in safe havens to protect their capital.

Economic Calendar: UK Jobs & PMI Data, AUD CPI Data, German and French Flash PMI Data, ECB Policy Decision.

Risk assets tumbled last night as geopolitical tensions saw more escalations. Talks of attacks on US Navy ships sent geopolitical jitters across markets boosting gold and oil prices.

Today, the financial markets continue to closely monitor the US 10-year Treasury yields as they edge closer to the 5% threshold. This ongoing climb in yields, which reached a new cycle high last night, has added further pressure to risk appetite.

China's data releases this morning showed some marginal signs of improvement, with retail sales, industrial production, unemployment, and Q3 GDP all printing better than expected. This gave the AUD a boost, and allowed traders to take some profit on AUDCAD longs from yesterday.

AUDNZD Jumps on Weak NZ CPI Data and Hawkish RBA Minutes

Crude oil prices have managed to sustain the gains observed last Friday, with market attention keenly focused on the unfolding events in the Middle East.

Markets are relatively quiet today as participants digest yesterday's risk off flows following the slightly better than expected US CPI and a weak 30-year treasury auction. WTI saw a big bounce trading to $85.37 as geopolitical issues remain in focus.

Equities continued their march higher today, with the S&P 500 trading at its highest levels in three weeks. The move higher happened despite a big beat in US PPI data yesterday, which showed that inflation is still stubbornly high.

If we see a big miss in the PPI data today, we could look for downside opportunities in the USD versus the AUD, EUR, and XAU (gold), as well as possible long opportunities in equities.

Equity markets continue to bounce following Friday's NFP report, with ES futures up over 3% from their lows. Bond yields drifted lower yesterday, with US10Y falling back below the 4.70% level.

The recent escalation of tensions between Israel and Hamas has raised concerns about stability in the Middle East. This has put the focus on three key risks: oil, gas, and inflation.