Stocks slip in Asia as oil climbs and bonds retreat
SPY•Asian shares were mostly lower as Brent crude rose 2.1% to $106.49 a barrel after Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz. Treasury yields climbed, with the 30-year yield at 5.5185%, near its highest since 2004.
1. Oil rises on Iran tensions
Brent futures gained 2.1% to $106.49 a barrel, bringing monthly gains to almost 18%, while U.S. crude rose 1.5% to $93.84. The moves followed Trump’s rejection of an Iranian proposal to reopen the Strait of Hormuz; he said talks would continue this week.
2. Asian stocks mostly lower
Japan’s Nikkei was flat, South Korea’s market fell 2.4%, and Chinese blue chips slid 1.4%. The broadest MSCI index of Asia-Pacific shares outside Japan eased 0.6%; S&P 500 futures fell 0.3% and Nasdaq futures lost 0.5%.
3. Yields and rate expectations rise
The 30-year Treasury yield edged up to 5.5185%, near its highest since 2004, while the two-year yield has risen 55 basis points this month. Markets imply a 66% chance of a second consecutive Federal Reserve rate hike in October. The U.S. economic calendar includes inflation, GDP, manufacturing and jobs data, with Friday’s payrolls report forecast to show 85,000 new jobs.
