Oil Price Surge Sparks Global Market Volatility
Global markets saw significant volatility yesterday as oil prices surged due to concerns over a US, Iran ceasefire agreement. The Brent crude price rose above $108 per barrel, pushing global bond yields to multi-year highs and equities lower.
The S&P 500 fell nearly 1% intraday, with higher energy costs reinforcing expectations of further Federal Reserve tightening and weighing on risk appetite. US Treasury yields reached fresh multi-year highs, although both equities and bonds partially recovered as oil prices retreated.
Gold prices, however, declined more than 3% to around $4,100 an ounce, but this decline was not accompanied by the typical ETF outflows associated with a sustained price drop. Resilient ETF holdings and renewed central-bank purchases have cushioned the decline so far.
The NZD traded steadily near 0.5665 for most of the offshore session, while rates edged higher across the curve in the local fixed income session due to a softer offshore backdrop.