Oil Prices Soar as Middle East Tensions Fuel Global Market Jitters
Global markets are on edge as oil prices surged and stock futures slipped after new attacks in the Middle East raised concerns about energy supply.
The Brent crude price jumped 3.1% to $107.84 a barrel, while US crude rose to around $103, following reports of strikes tied to Saudi infrastructure and shipping in the Gulf.
This uptick in oil prices comes at an awkward time for central banks, as markets are already pricing in rate hikes from the Federal Reserve on Wednesday and the Bank of Japan on Friday.
The Fed is seen having an 86% chance of raising its policy rate by a quarter point, while the BOJ has a 76% chance of lifting its cash rate to 1.25%. A stronger yen can pressure trades built on Japan's cheap borrowing costs, particularly those involving carry trades where investors borrow in low-rate currencies like the yen.