Stories
Asia Stocks Cautious as Oil Climbs Amid US-Iran Truce Doubts, Economic News Looms
- •Share markets started cautiously as oil prices rose due to uncertainty over a US-Iran truce, keeping bonds under pressure ahead of a busy economic week.
- •US President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz, stating talks would continue despite Iran's firm stance.
- •Brent crude futures climbed 1.6% to $106.00 a barrel, with gains of 17% this month, while US crude futures added 1.1% to $93.47.
- •Central banks are responding with rate hikes, with the Reserve Bank of Australia expected to tighten, and the Federal Reserve likely to hike again in October.
- •Strong US economic data, including a 5.0% growth forecast by the Atlanta Fed's GDPNow, supports corporate earnings expectations despite surging bond yields.
Key Questions Answered
Share markets made a cautious start as oil prices climbed amid doubts that the United States and Iran would reach a truce anytime soon. Brent futures rose 1.6% to $106.00 a barrel, while US crude futures added 1.1% to $93.47 a barrel following US President Donald Trump's rejection of an Iranian proposal to reopen the Strait of Hormuz.
Markets imply a 66% chance that the Federal Reserve will hike interest rates for a second straight meeting in October, with around 90 basis points of tightening priced out to late next year. Two-year yields have jumped 55 basis points over the month in anticipation of these hikes.
The Atlanta Fed's GDPNow measure forecasts growth of a racy 5.0% for the current quarter. Additionally, the upcoming US data calendar features readings on inflation, GDP, manufacturing, and a September payrolls report forecast to show a gain of 85,000 jobs.
