Bonds and Stock Futures Rise Following Trump War Report – Asia Market Wrap
Equity-index futures increased and oil lost ground after the Wall Street Journal reported that Trump told aides he is willing to halt the US military campaign against Iran even if the Strait of Hormuz remained mostly closed.
Futures for the S&P 500 Index soared 0.8%, while those for European markets jumped 0.3% on hopes that the disagreement will be resolved soon. The bounce in Asian shares, however, vanished, with the MSCI Asia Pacific Index down 1% and on track for its worst month since October 2008. Chip stocks fell.
As investors banked on lessening Middle Eastern tensions, West Texas Intermediate erased an earlier advance to trade barely changed at $103 per barrel. The commodity had previously soared to about $107 per barrel. Treasuries extended their gains, as the Dollar fell versus the majority of its Group-of-10 counterparts.
After a month of warfare, Iran has likely achieved the most significant strategic victory: a tighter hold on traffic through the Strait of Hormuz. So far in March, only six vessels per day have crossed the narrow strait that connects the Persian Gulf to the rest of the world, in either direction. This compares to roughly 135 every day in normal times.
Treasuries surged on the Wall Street Journal article, with the benchmark 10-year yield falling two basis points to 4.33%. Securities rose on Monday as Fed Chair Powell dismissed near-term inflation fears from rising energy costs.
