Asian Markets Rebound as Oil Prices Ease, Federal Reserve Guidance Remains Hawkish

The Asian markets saw a rebound on Monday as concerns over oil prices eased. The Hang Seng Index in Hong Kong initially opened down by two points, but quickly reversed direction to reach a high of 140 points above its initial level.

Other indices also showed gains, with the Shanghai Composite Index up eight points at 3,920 and the Shenzhen Component Index rising 75 points to 13,716. The Nikkei was closed due to a national holiday in Japan.

The tech sector saw a slight decline, with the Hang Seng Tech Index falling three points to 4,401. However, chipmakers benefited from AI's increasing demand for data, which boosted their stock prices.

Bond markets remained tense, with US two-year yields jumping 36 basis points over the past two weeks to 4.7604 percent. The Federal Reserve's hawkish guidance last week has led analysts at BofA to predict a 56 percent chance of another rate hike in October and a further move by year-end.

Central banks in several countries, including the EU, UK, Japan, Australia, and New Zealand, are expected to tighten monetary policy by year-end. The Swiss National Bank, Sweden's Riksbank, and Norges Bank will hold policy meetings on Thursday, but are seen maintaining their current stance for now.

The oil market saw a decline in prices despite the ongoing conflict in the Gulf region, with Brent falling 2.1 percent to $101.63 a barrel and US crude dropping 2.1 percent to $98.15. Data from Kpler showed exports from Opec's largest producer had recovered to over four million barrels per day in September after slumping to 2.4 million bpd in August.