Oil jumps above US$107 as Asia sells off, Fed and BOJ rate decisions now collide with a fresh energy shock Markets are opening the week under renewed pressure. Brent crude has jumped about 3% to above US$107 , Asian equities are falling sharply, and U.S. Treasury yields remain close to 5%. At the same time, investors are preparing for possible rate hikes from both the Federal Reserve and Bank of Japan this week . For investors, the central question has become: Can central banks contain inflation without causing a much larger slowdown when energy prices are surging at the same time? 30-second market snapshot Market / Asset Latest 🇺🇸 S&P 500 7,656.98, +0.86% Friday 🇺🇸 Dow Jones +0.98% Friday 🇺🇸 Nasdaq +0.96% Friday 🇲🇾 FBM KLCI 1,686.74, -1.10% Friday 🇯🇵 Nikkei -1.7% Monday morning 🇰🇷 Kospi -3.3% Monday morning 🌏 MSCI Asia ex-Japan -0.8% 🛢️ Brent crude ~US$107.36, +2.6% 🛢️ WTI crude ~US$102.48, +2.4% 🇺🇸 U.S. 10Y Treasury ~4.97% 🥇 Gold ~US$4,336...
Asian equities extended gains on Thursday as optimism over a potential extension of the US-Iran ceasefire drove investors back into risk assets, while easing oil prices helped reduce inflation concerns.
Equities Rebound Toward Pre-War Levels
The MSCI Asia-Pacific Index rose 1%, approaching levels seen before the Middle East conflict began.
- Regional markets, including Singapore, Taiwan, and China, have largely recovered war-driven losses
- China’s CSI 300 Index held gains after stronger-than-expected economic growth
The rally reflects a broad shift back into equities, supported by improving geopolitical sentiment and strong corporate earnings.
Oil Stabilises Below US$100, Easing Inflation Pressure
Brent crude held around US$95 per barrel, well below last month’s peak near US$120.
Lower oil prices are helping to:
- Reduce inflation expectations
- Support bond markets, with US Treasury yields easing slightly
- Improve outlook for global economic growth
This has been a key driver behind the risk-on rotation across global markets.
US Markets Hit Record Highs on Tech Strength
Wall Street continued its upward momentum:
- S&P 500 and Nasdaq 100 both reached record highs
- The Nasdaq 100 extended its longest winning streak since 2019
Gains were supported by strong earnings from major banks and a rotation within tech stocks, with investors shifting from chipmakers to software names.
Dollar Weakens as Safe-Haven Demand Fades
The US dollar weakened, with the Bloomberg Dollar Spot Index on track for its longest losing streak since 2006.
This reflects:
- Reduced demand for safe-haven assets
- Increased confidence in a potential diplomatic resolution
Ceasefire Extension Key to Market Direction
Reports suggest the US and Iran are considering a two-week extension of the ceasefire, allowing more time for negotiations on critical issues such as:
- Reopening the Strait of Hormuz
- Addressing nuclear-related concerns
Markets are increasingly pricing in a de-escalation scenario, though uncertainties remain.
Investor Takeaways
- Asian equities are rebounding, nearing pre-war levels on ceasefire optimism.
- Oil prices below US$100 are easing inflation concerns and supporting global markets.
- US indices hitting record highs reflect strong earnings and renewed tech momentum.
- The US dollar is weakening, signaling reduced risk aversion.
- Further market direction will depend on progress in US-Iran negotiations and oil price trends.
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