Week 11 CY26, Wrapped: Oil meme trade steals gold thunder; Iran scarier than thought; RBA hikes locked in

This finance journalist has a confession to make to kick off this week’s wrap: he has never known what the hell an ‘ide’ is, let alone the Ides of March. But he now has a better idea.

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Since hitting a record high of 9,200pts in the ancient history of within the last fortnight, the XJO in Friday arvo trades sits in the 8,600pts range. Why? After the US and Israel attacked Iran on – let’s be honest – dubious grounds (read apparent nuclear weapon readiness), Iran has shown that it can flex on the West.

Don’t make me include a Brent Crude price chart. But check out the NYSE-listed Breakwave Tanker Shipping ETF over the last three months (which to be fair looks a lot like the Brent chart the last two weeks.)

All it had to do was piss off every single country that neighbours it, lay sea mines in a vital shipping corridor, and set tankers ablaze offshore Iraq. It also forced Qatar to shut down a mega gas plant, and even attacked a Thai cargo ship, because apparently they deserved it.

(This finance journalist wonders what Thailand has done wrong in recent history, apart from needlessly provoke the glorious Kingdom of Cambodia.)

Long story short, that’s led to a surge in shipping insurance, the removal of oil flows through the Strait of Hormuz (even Saudi Arabia appear to be lost for strategy to retaliate against Iran), and now we’ve got a COVID-style shipping crisis on our hands.

Add that in with a price of Brent above US$100/bbl, and you’ve got the makings of a global inflationary upward spiral – which is pretty much cemented in by Australia’s Big 4 banks (and a basket of US investment banks) all expecting the RBA to raise interest rates at its next monetary decision meeting next week.

When you put all of that together, one is left to wonder why on any god’s Earth Australian mattress company Koala is deciding to IPO next month with plans to expand globally. Selling furniture. In a cost of living crisis. Strange move if you ask me.

Especially seeing as high interest rates will make it harder to loan money at home, too. That’s before you even think about tariffs.

On the whole of it, this week has been oil-centric, and I’m bored of writing about it. Here’s a speed-run through other big ticket items this week.

• A Japanese-government-linked entity will buy thousands of tonnes of neodymium off Lynas Rare Earths each year into the late 2030’s at a price floor of US$110/kg.

• BHP Ltd‘s hostile negotiations with China over iron ore prices continues to deteriorate with a new class of products knocked out, similarly, Rio Tinto is grappling with Mongolia’s relatively new government which wants more money, long story short.

• More retail traders than at any point in history got involved in trading oil on Monday of Week 11 (when prices went over US$110/bbl for Brent and the ASX dipped -4% intraday); cementing oil as a meme trade as much as a legitimate one.

• If Goldman Sachs’ W10 predictions prove correct, the stock market will continue to suffer through next week as investors struggle to normalise the Iran situation – but by W13, the shock might be over.

• Gold prices have dipped this week everytime oil goes up, suggesting commodity traders are loving the fast-paced rotations.

• As of 3.10pm, the XJO was flat on Friday – suggesting that Australians might be ready to go our own way, Iran be damned. That said, Trump does his best work on weekends, and Iran clearly has more levers than the market realised.

Another exciting week in these our modern times. Good news for prediction markets, though.

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