After Donald Trump rejected Tehran’s proposal to reopen the Strait of Hormuz, Asian markets were mixed Monday: Brent futures rose 1.6% to $106 a barrel amid US-Iran truce doubts, while MSCI’s Asia-Pacific index excluding Japan fell 0.2% and US Treasury yields climbed.
Japan’s Nikkei gained 0.8%, while South Korean shares fell 0.6%. The US 30-year Treasury yield rose to 5.5185%, near its highest since 2004; markets priced a 66% chance the Federal Reserve would raise rates for a second straight meeting in October.
Brent futures’ rise put the contract up 17% for the month. Limited refining capacity had lifted diesel prices to all-time highs, far above crude, increasing the risk that inflation could become embedded in pricing and wage decisions. The Reserve Bank of Australia was seen as likely to raise rates at its Tuesday meeting.
