Two fuel tankers are burning in Iraqi waters after being attacked by Iran's explosive-laden boats, forcing the country's oil ports to halt operations. Oman has reportedly cleared all vessels out of its main oil export terminal, taking no chances.
That was enough to send Brent crude futures back above $100, up nearly 9% at $100.07, having hit as high as $119.5 earlier this week. U.S. crude also gained 8% to $94.25.
When asked about the war, Trump said the U.S. was "going to look very strongly at the straits."
Share markets did not take it well. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.6% to snap two days of consecutive gains. Japan's Nikkei dropped 1.7%.
Both S&P 500 futures and Nasdaq futures fell 1%. Over in Europe, EUROSTOXX 50 futures slipped 1.1%.
All of that will be inflationary, prompting bond markets to raise borrowing costs worldwide. Forget about rate cuts.
Of the five central banks meeting next week in the United States, Europe, Britain, Australia and Canada, traders bet none will be easing and one - Australia - will be hiking.
Two-year U.S. Treasury yields hit the highest since August, while the 10-year was still suffering from a poor auction. All eyes are now on the auction of 30-year bonds later today. After all, who would want to lock in yields now, when inflation is threatening to eat your future returns?
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