Asian Stocks Waver Amid Rising Oil Prices and Strong US Economy
The global market experienced a downturn as Asian stocks wavered in response to rising oil prices and stronger-than-expected US economic data. The Brent crude price held steady at $102.84 a barrel after jumping nearly 4% in the previous session.
This surge in oil prices, combined with the US's still-strong economy, has led to concerns about inflation and further interest-rate hikes. As a result, government bonds in Japan, Australia, and New Zealand retreated, following declines in Treasuries during the New York session.
The 10-year yield surged 15 basis points to 5.11%, marking its biggest one-day increase since President Donald Trump's April 2025 tariff announcement. The US central bank raised rates last week for the first time since 2023, and traders have ramped up bets on further rate hikes.
Fed Governor Michael Barr stated that further rate hikes are likely needed to return inflation to the central bank's 2% target. Swaps now fully reflect three quarter-point hikes over the next year, with significant hedging for a fourth.