Asian Markets Dip as Oil Prices Surge on Supply and Geopolitical Concerns

Asian markets saw slight declines on Wednesday, even as US stocks reached new highs. MSCI's Asia-Pacific index (excluding Japan) fell 0.3%, though it remains up 1.5% for the month. The S&P 500, Nasdaq, and Dow Jones all hit record highs the previous day, with gains of 0.6%, 0.45%, and 0.5% respectively.

Oil prices rose sharply, with US crude up 1.05% to $90.38 per barrel and Brent crude climbing 1.06% to $101.65. The increase was driven by supply concerns, including a storm threatening North American oil regions and escalating tensions between Saudi Arabia and Yemen's Houthis. Vitol's CEO, Russell Hardy, noted that around 12 million barrels per day of crude and 2 million barrels per day of refined products had recently left the Middle East on tankers.

Global bond yields stabilized overnight, easing pressure on equities. French debt yields fell sharply after Marine Le Pen pledged spending cuts, narrowing the spread between French and German bonds. The euro stabilized above $1.1250, while US Treasury yields edged higher ahead of key auctions later in the week. The dollar saw minor fluctuations, with the yen weakening and sterling dipping slightly.

Gold prices also rose, reaching $4165.53 per ounce. The Federal Reserve's upcoming policy meeting minutes will be closely watched for clues on future rate moves, though expectations for a rate hike this month have dropped to 19%. Meanwhile, Japan's Nikkei index fell 0.86%, and Australian shares remained flat.