Oil Rises on Mideast Attacks, Asia Stocks Advance: Markets Wrap

(Bloomberg) — Crude oil jumped on heightened tensions in the Middle East that threats global trade. Stocks in Asia gained.

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Both Brent and West Texas Intermediate crude rose more than 1% to their highest since November in intraday trading after the US said Iranian-backed militants killed three service members, with US President Joe Biden pledging to retaliate. Oil had also climbed on Friday after Houthi rebels attacked a vessel carrying Russian fuel.

Shares rose at the open in Japan, led by energy producers following the gains in oil. Stocks in South Korea also advanced, while futures contracts for US stocks slipped as investors weighed risks from the Middle East conflicts at the start of a crucial week for the global policy outlook.

“The news of three US troops being killed by a drone attack, and President Biden saying ‘we shall respond,” will likely dial up the market’s focus on the region,” said Andrew Ticehurst, a rates strategist at Nomura Inc. in Sydney. “Still, I’d expect data and central bank meetings to dominate a busy week for markets, with China PMI, the FOMC and BOE gatherings and US payrolls among the highlights.”

The dollar edged higher and Treasuries steadied in Asian trading after retreating in the US on Friday. Mixed economic data spurred concerns the Federal Reserve will signal patience about the pace of interest-rate cuts when it meets on Wednesday.

This week also brings a slew of key data, from European GDP on Tuesday, to China PMI and Australian inflation on Wednesday, then European inflation and a Bank of England policy decision on Thursday.

“We think the Fed is likely to reiterate its data-dependent stance and caution that it is willing to exercise patience,” analysts at ANZ Bank Ltd., including Miles Workman, wrote in a report. “The Fed will be cautious about any reacceleration of inflation pressures from above-trend growth and the resilient labor market.”

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Chinese equities will look to build on their first weekly gain since the end of December, after the nation’s securities regulator announced Sunday it will halt the lending of certain shares for short selling from Monday. The authorities are taking measures following an alarming slide in Chinese stocks — the MSCI China Index has lost 60% from a February 2021 peak.

Earlier Singapore’s central bank kept its monetary policy settings unchanged for a third straight time as price pressures persist and the economy shows signs of resilience.

Key events this week:

• Australia retail sales, Tuesday

• Eurozone economic confidence, GDP, consumer confidence, Tuesday

• European Central Bank board members Boris Vujcic and Philip Lane speak, Tuesday

• US Conf. Board consumer confidence, Tuesday

• Microsoft Corp., Alphabet Inc. to report earnings, Tuesday

• Australia CPI, Wednesday

• Japan industrial production, retail sales, Wednesday

• China non-manufacturing PMI, manufacturing PMI, Wednesday

• France CPI, Wednesday

• Germany CPI, unemployment, Wednesday

• European Central Bank chief economist Philip Lane speaks, Wednesday

• Federal Reserve’s rate decision, US employment cost index, Wednesday

• Boeing Co. announces earnings, Wednesday

• US Treasury quarterly refunding, in which officials to announce plans for auctions of 3-year notes, 10-year notes and 30-year bonds and other borrowing plans, Wednesday

• Japan PMI, Thursday

• China Caixin manufacturing PMI, Thursday

• Eurozone S&P Global Manufacturing PMI, CPI, unemployment, Thursday

• Bank of England’s rate decision, Thursday

• European Central Bank Governing Council member Mario Centeno speaks, Thursday

• US ISM Manufacturing, initial jobless claims, Thursday

• Apple Inc., Amazon.com Inc., Meta Platforms Inc. to report earnings, Thursday

• German lawmakers hold final votes on revised 2024 federal budget, Friday

• European Central Bank Governing Council Member Mario Centeno speaks, Friday

• US employment report, University of Michigan consumer sentiment, factory orders, Friday

Stocks

• S&P 500 futures fell 0.2% as of 9:27 a.m. Tokyo time. The S&P 500 was little changed on Friday

• Nasdaq 100 futures fell 0.3%. The Nasdaq 100 fell 0.5%

• Japan’s Topix rose 1%

• Australia’s S&P/ASX 200 was little changed

• Hong Kong’s Hang Seng futures rose 0.8%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0843

• The Japanese yen was little changed at 148.29 per dollar

• The offshore yuan was little changed at 7.1890 per dollar

• The Australian dollar was unchanged at $0.6575

Cryptocurrencies

• Bitcoin was little changed at $41,956.37

• Ether fell 0.3% to $2,256.95

Bonds

• The yield on 10-year Treasuries was little changed at 4.14%

• Japan’s 10-year yield declined four basis points to 0.705%

• Australia’s 10-year yield declined two basis points to 4.23%

Commodities

This story was produced with the assistance of Bloomberg Automation.

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