Brent Holds Above $100 as Asian Stocks Decline Amid Middle East Conflict
Asian stocks fell on Thursday as Brent crude futures held above $100 per barrel due to concerns about inflation and potential supply disruptions in the Middle East. Investors were also cautious ahead of U.S. inflation data that will influence near-term monetary policy.
The biggest wave of attacks on shipping in the widening war in the Middle East kept oil prices elevated, leaving investors nervous. Benchmark 10-year U.S. Treasury yields held steady at 4.8407%, after scaling their highest since 2023 in the previous session.
Nick Twidale, chief market strategist at ATFX Global, said that Brent pushing through the $100 level will be seen by many in the market as a significant event. He noted that traders who had been holding off in hopes of a Middle East peace deal may now 'hit the trigger' as the realities of a longer conflict kick in.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7%, while Japan's Nikkei eased 0.4% and South Korea's KOSPI dipped 0.2%. European stock futures rose 0.25% ahead of an expected rate hike from the European Central Bank.
The euro was little changed at $1.16322 ahead of the ECB decision, while U.S. producer price and consumer price inflation reports are due later on Thursday and Friday, respectively. Fed funds futures traders are pricing in about 60% odds of a rate increase next week.