Oil Soars, Market Under Pressure!
Global oil prices rose to their highest level in more than a month after renewed attacks between the United States and Iran. Brent briefly rose as much as 3.8% to US$91.42 per barrel, its highest level since June, as the conflict began to expand beyond military targets.
The oil rally immediately reignited concerns about global inflation. Higher energy prices have the potential to depress purchasing power, raise production costs, and make it more difficult for central banks to lower interest rates.
The bond market also came under pressure. Yields rose as investors anticipated that high oil prices could make inflation difficult to control again. Australian and New Zealand government bonds also weakened due to similar concerns.
In the stock market, market movements tended to be mixed. Nasdaq futures briefly rose after last week's heavy sell-off, but Asian markets remained fragile. South Korea's Kospi fell sharply after investors returned from the holiday, pressured by a sell-off in AI and semiconductor stocks.
Pressure on the technology sector continued after Chinese AI company Moonshot AI released a new model that challenges the United States' technological dominance. On the other hand, Chinese technology stocks actually strengthened, including Alibaba after releasing a preview of its latest AI model.
As a result, oil has the potential to remain strong as long as the US-Iran conflict persists and Brent remains above US$90 per barrel. Gold could still find safe-haven support, but its gains could be restrained if inflation raises interest rate expectations again. Meanwhile, the US dollar has the potential to strengthen as the market seeks safe assets and believes the Fed should still focus on suppressing inflation. (asd)*
Source: Newsmaker.id
