Asian markets tumble as oil spikes and rate hikes loom
Asian stock indexes fell on Monday amid a fresh surge in oil prices and expectations of interest-rate hikes in the United States and Japan.
Supply worries lifted Brent crude by more than 3 % following fresh Saudi strikes and a recent attack on a Saudi pipeline, while shipping threats in the Strait of Hormuz and Bab el-Mandeb kept oil markets tense. Asian equities slipped, with one outlet futures down about 2 % and Wall Street futures also in the red. A hot U.S. consumer-price report led markets to assign an 86 % chance to a 25-basis-point Fed hike on Wednesday, potentially the first since mid-2023, and a similar probability of a quarter-point rise by the Bank of Japan on Friday.
JPMorgan chief U.S. economist Michael Feroli warned that the Fed must act to preserve credibility, and Goldman Sachs strategist Ben Snider said solid earnings could cushion equities even as yields rise. Meanwhile, Treasury yields have climbed sharply in recent weeks, adding pressure to equity valuations.
Why it matters
Higher oil and looming rate hikes could tighten global inflation and pressure markets worldwide.
How the sides frame it
HIGH AGREEMENTBoth camps describe Asian markets slipping as oil prices rise and rate hikes loom, but right-leaning coverage adds a focus on investors bracing for possible interest-rate hikes in both the United States and Japan.
CENTER
Neutral reporting of market declines tied to oil price spikes and anticipated rate hikes.
RIGHT
Emphasizes investor anxiety about upcoming US and Japan interest-rate hikes.
The right emphasises
- Shares slip in Asia as oil climbs
- Rate hikes loom
- Investors bracing for possible interest-rate hikes in the United States and Japan
How this story developed
- Aug 19 Fed officials warn higher rates may be needed if inflation stays elevated
- Sep 5 U.S. Central Command announced the destruction of three Iran-linked oil tankers—M/T Downy off Kharg Island, M/T Stark 1 near Jask and M/T Kylo in the Gulf of Oman.
- Sep 6 He said Tehran’s response to US strikes would no longer be “proportionate”, adding that “the Americans have surely realised that the era of ‘proportionate responses’ has come to an end”.
- Sep 7 Iran claimed to have hit an unmanned U.S. vessel in the Strait of Hormuz, which the U.S. dismissed as false.
- Sep 8 Iran announced it will double the price of fuel consumed beyond its quota.
- Sep 8 Iran’s Fars news agency reported an explosion heard in the southern Jask area off the Gulf of Oman and east of the Strait of Hormuz.
- Sep 10 Oil prices have risen above $95 a barrel amid renewed Middle‑East tensions.
- Sep 10 New reporting highlights a sharp inflation jump and rising fuel costs, reinforcing expectations of a deposit‑rate increase.
- Sep 10 The ECB implemented a 0.25‑point rate increase across its three principal rates.
- Sep 11 Asian stock markets fell on Friday, mirroring Wall Street losses, while Brent crude rose above $108 a barrel as geopolitical strains between the United States and Iran intensified.
- Sep 11 Fed minutes revealed a 9‑3 vote to keep rates near 3.6% and a drop in market odds for a September hike to about 67%.
- Sep 11 August US CPI held steady at 3.4% year‑over‑year and core CPI fell to 2.4%.
- Sep 12 Oil prices rose to just below $109 a barrel as Middle‑East tensions escalated.
- Sep 12 Markets priced in a strong chance of another quarter‑point hike in December.
In this story
Related stories
21 in this thread