Brent crude holds above $100/bbl as Middle East conflict escalates

Investors are assessing the impact of elevated bond yields and higher oil prices, which are seen as the "new normal" amid an escalating Middle East conflict. Brent crude futures were perched above $100 a barrel for the first time since July, while long-term bond yields are at highs not seen since before the global financial crisis. The European Central Bank is expected to deliver a widely anticipated rate hike later in the day, with the Federal Reserve and the Bank of Japan also due to announce policy decisions next week. Investors will be closely watching for signals on future monetary policy. The euro was steady at $1.1637 ahead of the ECB decision, while European stock futures pointed to a muted open. The yen stood at 153.39 per dollar, up 4% this month, shrugging off the rise in oil prices as traders brace for a faster pace of rate hikes from the Bank of Japan. BOJ board member Kazuyuki Masu warned of broadening price pressures that have pushed underlying inflation "very close" to its 2% target, hinting at rapid rate increases. Data on U.S. producer prices are due later on Thursday, with consumer price inflation scheduled for Friday. Analysts expect the data to play a key role in whether the Fed hikes rates at its September 15 to 16 meeting. Fed funds futures traders are pricing in about 60% odds of a rate hike next week.