Bonds and Stocks Fall as Iran Tensions Lift Oil - Asia Market Wrap
Bonds and stocks fell as renewed US-Iran tensions pushed oil higher and reduced expectations for near-term rate cuts. Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, while Tehran maintained its conditions for reopening the waterway, despite both sides signalling talks could continue. Shorter-dated Treasuries led losses, with the US two-year yield rising around 5 bps to 4.90%, while the 10-year yield advanced about 4 bps. Higher energy prices have added to inflation concerns, with markets increasingly focused on the risk that elevated oil costs could keep rates higher for longer. The average yield on a global bond gauge has climbed above 4% for the first time since 2007. Brent rose more than 2% toward $107 a barrel after Iran said it would not soften its conditions for reopening the Strait of Hormuz. The move followed Trump’s rejection of Tehran’s seven-day proposal, which called for measures including easing restrictions on Iranian oil in exchange for reopening the waterway and restarting nuclear talks. The Dollar strengthened against most major currencies, while Gold and silver declined as rising yields weighed on non-yielding assets. Asian equities also weak
Bonds and stocks fell as renewed US-Iran tensions pushed oil higher and reduced expectations for near-term rate cuts. Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, while Tehran maintained its conditions for reopening the waterway, despite both sides signalling talks could continue. 90%, while the 10-year yield advanced about 4 bps. Higher energy prices have added to inflation concerns, with markets increasingly focused on the risk that elevated oil costs could keep rates higher for longer.
The average yield on a global bond gauge has climbed above 4% for the first time since 2007. Brent rose more than 2% toward $107 a barrel after Iran said it would not soften its conditions for reopening the Strait of Hormuz. The move followed Trump’s rejection of Tehran’s seven-day proposal, which called for measures including easing restrictions on Iranian oil in exchange for reopening the waterway and restarting nuclear talks. The Dollar strengthened against most major currencies, while Gold and silver declined as rising yields weighed on non-yielding assets.
6% and Nasdaq 100 futures retreating. Brent’s prompt spread widened sharply, signalling continued concern over near-term crude supply tightness. Elsewhere, the Pound steadied, while markets also monitored US tariff developments after Washington outlined plans to reduce tariffs on roughly $30 billion of imports on each side following talks between Trump and China’s Xi. Investors remain focused on oil prices, inflation and upcoming US economic data for further clues on the rate outlook.