Asian stocks dip as oil rises after Trump’s Hormuz levy threat
By Gregor Stuart Hunter
SINGAPORE, July 14 (Reuters) – Stocks swung between gains and losses in Asian trading on Tuesday, hitting a one-month high in Asian trading after President Donald Trump said the United States would restart a blockade of Iranian shipping and charge 20% on cargo passing through the Strait of Hormuz.
After a choppy session, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2% as a rebound in South Korean shares offset declines in Taiwan. S&P 500 e-mini futures rose 0.1%.
Chinese stocks led the rise, with the CSI 300 index increasing by 2% after June export and import data announced on Tuesday exceeded economists’ expectations.
“China’s exports and imports rose to the highest levels since the pandemic-skewed 2021 as the tech boom fueled growth on both fronts,” ING analysts said in a research note. he wrote. “Exports have been one of China’s main growth engines in recent years, and this year’s acceleration continues to exceed expectations.”
Brent crude futures rose 2.6% to $85.49 per barrel, after previously reaching $85.64, the highest level since mid-June.
Markets were also shaken Monday by hawkish comments from Fed Chairman Christopher Waller, who said the U.S. central bank may need to raise interest rates “in the near term” if data show inflation continues well above its 2% target.
US CPI data will be released later Tuesday, followed by comments from Fed Chairman Kevin Warsh, who will present the central bank’s semi-annual monetary policy report to Congress.
“Markets have reacted aggressively to recent headlines on the Iran conflict as risk has increased in the system over the past week,” said Chris Weston, head of research at Pepperstone in Melbourne.
“The prospect of tighter monetary policy to counter a potential energy shock is rarely supportive for risk assets.”
Wall Street stocks sold off overnight and oil futures rose more than 9% as the conflict between the United States and Iran reignited and the flow of goods through the Strait of Hormuz was once again restricted. The S&P 500 closed down 0.8% and the Nasdaq Composite closed down 1.6%.
Fed funds futures are pricing in a 43.3% chance of a 25 basis point increase at the U.S. central bank’s next two-day meeting on July 28-29, according to CME Group’s FedWatch tool. This probability was 34.2% on Friday.
The yield on the US 10-year Treasury note rose 0.8 basis points to 4.6156%.
The US dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.1% to 101.18 and was trading around monthly highs. Gold rose 0.8 percent to $4,031.60.
