Investors are closely watching the latest updates in the hostilities between Israel and Iran to gauge how the situation might affect oil prices, as a rise in crude could put more pressure on inflation.

Uncertainty over tariffs had already led the central bank to adopt a wait-and-see approach to interest-rate decisions.

US President Donald Trump said Iran wants to talk about deescalating the deadly conflict with Israel but Prime Minister Benjamin Netanyahu signaled strikes will continue.

US Treasuries fell as an earlier surge in oil prices fanned concern about inflation, with tensions between Israel and Iran escalating over the weekend. Most Read from BloombergShuttered NY College Has Alumni Fighting Over Its FutureDo World’s Fairs Still Matter?

The Federal Reserve and Bank of England are among the central banks due to meet in the coming days as Israel’s attack on Iran adds to a series of geopolitical shocks, including Donald Trump’s trade war, that are clouding the outlook for growth and inflation.

Friday's selloff in U.S. government debt, sparked by inflation concerns stemming from the escalating conflict between Israel and Iran, sent Treasury yields up by the most in one week as oil prices surged.

Australians could see petrol prices rise as high as $2.20 a litre, as analysts warn the spike in oil prices fuelled by the Israel-Iran conflict will flow "directly to the pump". They fear a prolonged conflict could plunge the world into a global energy crisis that could last years rather than months,

At least eight people died overnight following Iranian missile strikes on Israel. Israel's defense minister accused Iran of targeting civilians and Iranian officials have also accused Israel of striking civilians.