Australian market set to open lower as oil spikes and US yields climb
Futures indicate the ASX will open about 0.9% down after Brent crude jumped 7.5% and US 10-year yields rose to near 5%.
Oil prices surged sharply, with Brent crude climbing 7.5% to over US$109 a barrel as concerns grew over possible supply disruptions linked to the Middle East conflict. The spike in oil helped push US 10-year Treasury yields up to 4.96%, a multi-year high that weighed on equity markets in the United States, where major indexes fell by around 0.6% to 0.65%. In response, Australian market futures are forecasting a 0.9% decline for the ASX 200 at the opening bell, and the Australian dollar weakened by 0.85% to 71.5 US cents.
Other asset classes also moved lower, with spot gold down 2.29% to US$4,358 per ounce and iron ore futures slipping 1.3% to US$98.20 per tonne. The combined effect of rising oil prices and higher US yields is creating a risk-off mood across global markets.
Why it matters
Higher oil prices and US yields are driving a sell-off that could depress Australian equities at the start of trading.
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