Asian markets rise as oil prices climb after Gulf incidents
Asian stock markets rose on September 7, while oil prices increased after U.S. and Iranian attacks on ships in the Gulf. As Channel NewsAsia reports, citing Reuters, a positive U.S. employment report supported assessments of global economic growth prospects while reinforcing expectations of further interest rate increases.
Oil and the Strait of Hormuz
Tehran said it would announce a limited zone outside the Strait of Hormuz in the coming days. This came after U.S. forces struck three Iranian tankers, while Iran's Islamic Revolutionary Guard Corps launched ballistic missiles at two U.S. Navy ships.
Against this backdrop, Brent crude rose by 0.2% to $96.45 per barrel, after gaining nearly 10% last week. U.S. crude added 0.4% and traded at $91.85 per barrel.
Markets and central bank expectations
Japan's Nikkei index rose by 2% after falling by roughly the same amount the previous week. Shares in South Korea gained 3%, while the broad MSCI index of Asia-Pacific shares excluding Japan increased by 0.9%.
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Higher energy prices heightened investors' focus on U.S. inflation data for August, due to be released on Friday. The median forecast calls for a 0.2% monthly increase in the core consumer price index, although a reading of 0.3% is possible.
Markets expected the European Central Bank to raise its rate to 2.75% on Thursday. Futures also indicated a 75% probability of an increase to 3% by December. The probability of a U.S. Federal Reserve rate hike at its September 16 meeting was estimated at 58%, and at 70% in October.
The yield on 10-year U.S. government bonds remained near highs since late 2023, at 4.784%. The dollar index stood at 99.135, the euro at $1.1614, and gold traded near $4,426 per ounce.
