Asia Stocks Cautious Amid Oil Price Spike and Rate Hikes
Stocks in Asia made a cautious start on September 28 amid rising oil prices and bond yields. Oil futures jumped 1.6 percent to $106.00 a barrel, while US crude futures added 1.1 percent to $93.47 a barrel. The spike in oil prices is attributed to doubts over a US-Iran truce, with US President Donald Trump rejecting an Iranian proposal to reopen the Strait of Hormuz.
The Reserve Bank of Australia is expected to hike interest rates when it meets on September 29, with markets implying a 66 percent chance of a second consecutive rate hike by the Federal Reserve in October. Despite this, strong US economic data has supported expectations for corporate earnings, underpinning equities.
Bruce Kasman, chief economist at JPMorgan, noted that the global expansion appears to have entered a phase of broad-based strength rarely seen over the past two decades. He added that rates are moving higher while equity prices remain close to record levels.