Oil Price Surge Sends Asian Stocks and Bonds Reeling
Asian stocks and bonds experienced a downturn on Friday, driven by surging oil prices and concerns over inflation. The MSCI Asia Pacific Index fell 1.3%, with Japan's Nikkei 225 Stock Average plummeting 2.2%. The S&P 500 futures rose 0.3% at 6:47 am London time, while the Nasdaq 100 futures increased 0.2%.
The US Treasury bond market also saw selling pressure after the government purchased fewer securities than expected on Thursday, pushing the 10-year yield to the cusp of 5%. Asian government bonds followed Treasuries lower, with Australia's three-year yield jumping as much as 20 basis points to 5.05%, its highest level since 2011.
Mohit Mirpuri, a partner at SGMC Capital in Singapore, stated that it was 'a broad risk-off move across Asian markets'. Investors are wary of taking on risk ahead of the US consumer price index report, which could determine whether the Federal Reserve raises interest rates this month.
Oil prices have been rising due to tensions around the Strait of Hormuz, with Brent crude trading at $105.36 a barrel after earlier reaching almost $110. The conflict has added another complication for central banks, which are already grappling with inflation concerns.