Oil Rises On Possible Israel-Iran Strike – Asia Market Wrap

Oil rose to the highest level in a week and the dollar weakened after CNN reported that new US intelligence suggested Israel is preparing for a potential strike on Iranian nuclear facilities.

Brent crude jumped 1.7%. It wasn’t clear that Israeli leaders had made a final decision to carry out the strikes, CNN said, citing officials it didn’t name. The Swiss franc and the yen, traditional haven assets, inched higher. Yields on Japanese super-long sovereigns dipped after Tuesday’s surge, while those on the 30-year US Treasury hovered around the 5% mark. Contracts for the S&P 500 and the Nasdaq 100 dropped 0.4% while Asian shares rose 0.8%.

Geopolitical tensions may add headwinds to the markets, which had calmed recently after a month of turmoil from the tariff blitz unleashed by US President Donald Trump. Investors are scouring for clues on whether recent gains in stocks can sustain, even as the Federal Reserve waits to gain a clearer view of the economy before lowering interest rates.

Oil has been volatile since last week on mixed headlines about the fate of Iran-US nuclear talks, which could pave the way for more barrels to return to a market that’s expected to be oversupplied later in the year. An attack by Israel would hinder any progress in those negotiations and add to unrest in the Middle East, which supplies about a third of the world’s crude.

The tensions triggered dollar selling and yen buying by risk-averse investors. Most Asian currencies climbed while a gauge of the greenback declined for a third straight day.