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The MSCI Asia Pacific Index fell 1.3%, led by losses in Japan and South Korea, after the S&P 500 Index slipped 0.5%. Brent crude rose 0.7% after climbing to almost $110 a barrel in US trading, pushing Treasury yields to multiyear highs. Bonds came under further pressure after the Treasury bought back fewer seccurities than investors had anticipated. Faster-than-expected producer-price data also prompted traders to boost bets on a Fed hike next week. Asian government bonds followed Treasuries lower. Australia’s three-year yield jumped as much as 20 basis points to 5.05%, its highest level since 2011, while New Zealand’s two-year yield climbed 21 basis points. There were still some positive pockets in markets. Oracle Corp. shares gained about 6% in extended trading after the company reported faster growth in its cloud-computing business than analysts had projected. Friday’s US consumer price index report will now be a key test for risk sentiment, with investors looking to see whether higher energy costs are spilling over into broader price pressures. A softer reading may ease the rise in bond yields and rate-hike expectations that has weighed on equities, while an upside surprise risks extending the selloff. “Yields and oil probably need to come down in order for stocks to work,” said Stephanie Roth, chief economist at Wolfe Research. That could happen, for example, if Friday’s inflation data were to “come in quite soft,” she said. Treasury yields rose across the curve Thursday after the US government purchased fewer 10-to-20-year securities than investors had expected in Treasury Secretary Scott Bessent’s first expanded buyback operation. The 10-year yield was little changed at 4.96% in early Friday trading after touching 4.97%, the highest since late 2023. The US producer price index rose 0.4% in August from the previous month, the most since May, government data showed. Swaps are now pricing about a 70% chance of a Fed hike next week and fully discounting a move by October. European Central Bank President Christine Lagarde added to concerns over tighter global monetary policy, saying the region’s inflation would remain well above target into 2027. “A hot US PPI print and a hawkish-sounding Christine Lagarde both speak to a reality that points to the possibility a global central bank rate-hike cycle may be in the offing, which does not support risk assets today or in the short term,” said Joe Brusuelas, chief economist at RSM US LLP. Oil’s surge has added another complication for central banks as the conflict around the Strait of Hormuz threatens to keep energy prices elevated. An increase in attacks on shipping through the critical waterway has pushed up prices for oil, natural gas and diesel, adding to concerns that energy costs will feed through to inflation. Iran signaled it has no intention of backing down in the face of an American naval blockade and threatened to escalate its strikes if the US continues attacking its territory. “Rising oil prices will be a concern ahead of the midterms,” said Warren Patterson, head of commodities strategy at ING Groep NV. “In order to see prices moving significantly higher, we would need to see recent escalation feeding through to renewed disruptions in oil flows through the Strait of Hormuz.” (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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