A day after Donald Trump claimed there was a 'very good chance' of a nuclear deal with Iran and paused a planned attack, oil prices plummeted, causing a wobbliness in Asian shares.
Asian shares wobbled on Tuesday while bonds found their footing following a steep selloff after US president Donald Trump’s decision to pause a planned attack on Iran and his claim there was a good chance of a nuclear deal sent oil prices lower.
Troubles in the Strait of Hormuz, where a significant amount of the world’s oil passes through, have spooked investors, who were already rattled by a weekend drone strike in the United Arab Emirates. Brent crude futures fell more than 2% to US$109.41 a barrel, while US crude was down 1.3% to US$107.25 per barrel. Both remained more than 50% above their pre-war levels.
In share markets, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.22%, while Japan’s Nikkei rose 1%. South Korea’s Kospi fell 2%. Nasdaq futures reversed early gains to trade 0.07% lower, while S&P 500 futures lost 0.03%. In Europe, EUROSTOXX 50 futures rose 0.4%, while FTSE futures and DAX futures edged 0.3% and 0.4% higher, respectively.
The all-important artificial intelligence trade will be tested by earnings from Nvidia that are due on Wednesday. The company is the market’s shorthand for everything AI, and its gains have been driven in large part by AI over the past few years. Bond selloff abates The fall in oil prices helped stem a steep selloff in global bonds on Tuesday, though worries remained about the lasting inflationary shock from the Iran war.
Yields on the benchmark 10-year US Treasury note eased from a more than one-year-high to 4.5974%, while the two-year yield was down slightly to 4.0564%. The dollar benefited from safe-haven demand since the onset of the war and was up 0.1% at 159 yen. The euro and sterling fell 0.1% at US$1.1643 and US$1.3419, respectively. Spot gold eased marginally to US$4,562.50 an ounce, having come under pressure from rising bond yields
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