Asian Shares Plummet as Oil Prices Soar Amid Global Supply Concerns
Asian share markets declined on Monday due to concerns about global oil supply and potential interest rate hikes in major economies. The recent attack on a Saudi oil pipeline and an advance by Yemen's Houthis have increased tensions, causing oil prices to surge anew. Brent crude climbed 3% to $107.36 a barrel, while US crude rose 2.4% to $102.48.
Investors are bracing for possible rate hikes in the United States and Japan this week. The Federal Reserve is expected to increase rates by 25 basis points on Wednesday, marking its first hike since mid-2023. Analysts believe that oil prices could remain elevated for a lengthy period, stoking inflation globally.
Markets are pricing in an 86% chance of a rate hike by the Fed and a 76% chance of a quarter-point increase by the Bank of Japan. The BOJ is also expected to sound hawkish on further tightening to prevent a relapse in the yen's value.