Global Stocks Fall as Oil Nears $100 – Europe Market Wrap

Global stocks fell as Brent crude approached $100 a barrel, adding to concerns that central banks may need to keep raising interest rates to contain inflation. The yen climbed to its strongest level since February.

The S&P 500 was set to open 0.3% lower at the start of a holiday-shortened US week, while European and Asian equities also weakened. Brent rose above $98 a barrel after Saudi Arabia said operations at facilities in the south of the kingdom had been halted following attacks. Strong Chinese buying added to tightness in oil markets.

Treasuries slipped ahead of a $58 billion three-year note auction, while the dollar was little changed. The yen gained as much as 1% to below 154 per dollar, supported by expectations for a more restrictive Bank of Japan policy and technical momentum.

Middle East tensions are driving markets at the start of a week that culminates with Friday’s US inflation report, which could prove decisive for the Federal Reserve’s September policy decision. Rate hikes by the European Central Bank and BOJ this month are already largely priced in.

Copper added to commodity-driven inflation concerns, hitting a record for a second consecutive session as constrained near-term supply and expectations of US tariffs on refined-metal imports supported prices.

Tuesday’s three-year Treasury auction kicks off a busy week of government debt issuance, with 10- and 30-year sales to follow as longer-dated yields hover near their highest levels in years. The UK is also set to face its highest borrowing costs on a debt sale since at least 1998.