Global Stocks Extend Rally as Oil Rises on Iran Tensions – Asia Market Wrap

Global stocks traded near a record high as Asian shares tracked Wall Street higher after soft US jobs data eased expectations for a Fed interest-rate hike. Oil extended gains as Iran rejected talks with the US and a deal to reopen the Strait of Hormuz remained elusive.

The MSCI All Country World Index, the broadest gauge of global equities, rose 0.1%, its seventh advance in the past eight sessions. MSCI’s Asian gauge gained 0.4%, tracking a Wall Street rally on Friday that sent the S&P 500 to an all-time high. Futures contracts indicated modest gains for US gauges, while Europe was set for a flat start to the week.

Brent crude rose 0.5% to around $84 a barrel, extending a rally of more than 5% over the previous three sessions. As oil advanced, Treasuries gave back some of Friday’s gains, pushing the 10-year yield up 1 bp to 4.66%. The Dollar strengthened against most of its Group-of-10 peers.

Treasuries surrendered some of their gains caused by the jobs data. On Friday, two-year yields, the most sensitive to Fed policy expectations, dropped as much as 9 bps after the jobs report before ending about 5 bps lower at 4.19%, marking their biggest weekly decline since May. The yield on the two-year note rose 1 bp to 4.20% on Monday.

Gold traded steady at about $4,340 an ounce after a 7.3% advance last week, its best weekly gain since January. Attention in Asia was also on the Yen, which traded weaker at around 158.30 per Dollar. The Yen has underperformed all its Group-of-10 peers this month as the boost from recent intervention fades, putting traders on alert for further official action, though the currency strengthened sharply on Friday after labor data was released.