Oil Rises for Seventh Day as Hormuz Flows Remain Unreliable
Oil prices continued their longest rally in a month, while stock markets remained flat as there was no significant progress in restoring flows in the Strait of Hormuz. Brent spot rose 1% to above $109 per barrel, reaching a three-week high and extending its gains into a seventh day.
The White House stated that US officials were discussing Iran's latest proposal, but maintained "red lines" in any deal to end the war, which is entering its eighth week. Uncertainty over the direction of diplomacy kept markets sensitive to headlines, especially as energy flows were seen as yet unrecoverable.
The rise in energy prices also impacted the bond market. The 10-year US Treasury yield rose 1 basis point to 4.34%, while Japanese government bonds of the same tenor also weakened. In Japan, the yen strengthened 0.2% after the Bank of Japan held interest rates unchanged in a 6-3 split, heightening investor attention to the direction of global policy.
In equities, high oil prices and a significant risk agenda this week curbed risk appetite. The MSCI Asia Pacific index remained largely unchanged, holding near the levels seen at the start of the US-Israel war against Iran in late February. Technology stocks performed better, with South Korea rising 1.1% and expected to overtake the UK as the world's eighth-largest stock market.
Investors now await central bank policy decisions and tech earnings reports to test whether the stock rally can last. S&P 500 futures rose 0.1%, while the leading semiconductor index retreated after a record rally. In other assets, gold fell 0.2% to around $4,675, and Bitcoin traded around $76,700.
This week also features interest rate decisions from the Fed, the ECB, and central banks in the UK and Canada. While consensus expects rates to remain on hold, markets will be closely watching to see whether officials like Jerome Powell and Christine Lagarde emphasize the inflationary risks from oil supply disruptions. A wait-and-see approach is expected, but markets believe central banks' assessments of the impact of the energy shock could be a key determinant of sentiment.
5 key points:
- Brent rose 1% and broke through $109, extending its rally to a seventh day and a three-week high.
- Hormuz remains unchanged; the US is weighing the Iran proposal but remains on a "red line," keeping the market headline-driven.
- US 10-year yields rose to 4.34%; JGBs weakened, the yen strengthened 0.2% after the Bank of Japan held its 6-3 policy.
- MSCI Asia Pacific was nearly flat; tech stocks were relatively strong, South Korea rose 1.1%.
- Focus this week: Fed/ECB/BoE/BoC decisions and big tech earnings; gold fell to around $4,675. (asd)*
Source: Newsmaker.id
