Oil Gains on Escalation Risk While Stock Futures Fall – Asia Market Wrap
The gain in equities slowed, crude oil recovered, and gold prolonged its decline as fragile optimism over a potential de-escalation in Middle Eastern tensions faded.
Equity-index futures for the S&P 500 Index fell 0.6%, and European markets were forecast to fall 0.8% at the open, as sentiment weakened following the Wall Street Journal’s report that US allies in the Persian Gulf are leaning toward joining the fight against Iran. Adding to the pessimism, Iran’s deputy speaker ruled out discussions with the US, echoing similar remarks from other regime leaders.
As mood soured, Brent rose 3.6% to around $104 per barrel. The Dollar strengthened, and two-year Treasury yields jumped 5 bps to 3.90% on concerns that rising oil prices would increase the odds of the Fed raising interest rates. Gold fell 1.2%, marking its worst daily losing streak on record, as Asian markets reversed earlier gains to jump 1.3%.
Silver fell 2.5% to $67.40 per ounce, while Bitcoin led cryptocurrencies lower, trading near $70,200.
Tensions remained high in the Middle East. Recent US-Israeli attacks targeted a gas pressure regulation station and a related administrative building in Iran’s central Isfahan region, according to the semi-official Fars news agency. Iran also launched a new series of missiles toward Israel.
