Gregor Stuart Hunter

Asian markets are bracing for Trump’s promised attack on Iran’s infrastructure

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  • The President of the United States is beginning to count on launching attacks on the devices on Tuesday
  • Brent crude surges above $110 a barrel, stocks rally
  • The 10-year JGB yield hit the highest since February 1999 relative to inflation.

SINGAPORE, April 6 (Reuters) – Oil prices rose, bonds fell and stocks were mixed in early trading in Asia on Monday as U.S. President Donald Trump vowed “hell” if Tehran does not meet his deadline to reopen the Strait of Hormuz.

Trump’s repeated threats to destroy public services including power plants and bridges if the vital waterway is not opened on Tuesday have put traders on edge for Iranian attacks on Gulf targets.

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Due to a lack of funds as many countries around the region celebrated holidays on Monday, S&P 500 e-mini futures fell 0.2%, while the ⁠MSCI index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS)opens a new tab it increased by 0.5%. Nikkei 225 (.N225)opens a new tab rose 1.2%, as did South Korea’s Kospi (.KS11)opens a new tab advanced 2%.
Brent crude futures opened higher, rising 1.4% to $110.58 a barrel after OPEC+ members agreed on Sunday to raise their oil output by 206,000 barrels a day for May. However, the increase will only exist on paper for several major producing countries behind the Strait of Hormuz that have suffered damage to oil production facilities and transport facilities since the war began.

“This week will continue to be dominated by developments in the Middle East, although there is a heavy slate of data production – including the minutes of the FOMC March, personal income for February, and the March CPI – will compete for attention,” said the president of Yardeni Research and chief investment expert Ed Yardeni, referring to the Federal Open Market Committee that sets US monetary policy.

“Trump warned Iran that unless the Strait is opened immediately, Monday will be the Day of Change for the US, when the US will attack Iran’s power plants,” he wrote in the investigative report.

On Friday, the S&P 500 (.SPX)opens a new tab closed 0.1% after the US jobs report showed job growth continued more than expected in March, with a 178,000 increase in jobless earnings representing the largest increase in more than a year. The unemployment rate fell to 4.3% from 4.4%, as people quit their jobs.

The data complicates the picture of the Federal Reserve, which will decide on monetary policy in a two-day meeting that will end on April 29. However, swaps prices show that the market does not expect a move at all from the US central bank until September 2027, according to the CME Group’s Fedwatch tool.

The US dollar index, which measures the greenback’s strength against a basket of six currencies, was steady at 100.23. The yield on the 10-year US Treasury bond rose 1.4 basis points to 4.3584%.

In Japan, Japanese government bond yields set a new record for the 21st century amid concerns about rising inflation. The index was 2.0 points to 2.4%, the highest since February 1999. Against the yen, the US dollar was flat at 159.635 yen.

Gold fell 0.8% to $4,638.54. In cryptocurrency, bitcoin was up 1.9% to $68,915.85, while ether gained 2.4% to $2,117.61.

(This story was corrected to change the yield on the US 10-year Treasury bond to 1.4 points, not 4.7 points, in paragraph 9)

Reporting by Gregor Stuart Hunter; Organized by Lincoln Festival.

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