Oil Prices Spike Amid US-Iran Truce Doubts, Fueling Bond Yields Surge
Asian stock markets opened cautiously on Monday as oil prices rose due to doubts over a US-Iran truce, keeping bond yields under pressure ahead of key economic news.
US President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz, claiming Tehran was desperate for a deal. Trump said talks would continue this week, but Iran showed no signs of backing down its proposals.
Brent futures jumped 1.6% to $106.00 a barrel, with gains this month reaching 17%. US crude futures added 1.1% to $93.47 a barrel, raising concerns about inflation and wage decisions due to a dearth of refining capacity.
Central banks have been tightening rates, with the Reserve Bank of Australia likely to follow suit when it meets on Tuesday. Markets now imply a 66% chance the Federal Reserve will hike for a second consecutive meeting in October, with around 90 basis points of tightening priced out to late next year.