Key facts
- Oil prices rose due to stalled U.S.-Iran negotiations and uncertainty over the Strait of Hormuz reopening.
- Asian stocks drifted amid concerns about global inflation outlook.
- U.S. President Donald Trump issued new demands to Iran, complicating peace deal efforts.
- Brent crude futures reached $88.00 per barrel and U.S. crude futures hit $82.45.
- The U.S. July consumer price report is due Wednesday, with expectations for modest inflation increases.
- The yen weakened against the dollar, trading above 159.
- Spot gold prices increased by 0.5% to $4,409.81 an ounce.
Oil prices edged higher as U.S.-Iran negotiations over a peace deal and the reopening of the Strait of Hormuz hit an impasse, while Asian shares drifted amid protracted uncertainty over the global inflation outlook. U.S. President Donald Trump responded to Iran's conditions for a peace deal with his own demands, a rhetorical escalation that complicates efforts to reopen the crucial waterway.
Brent crude futures rose to $88.00 per barrel and U.S. crude futures climbed to $82.45, marking their highest levels since July 31. Analysts described the situation as a "Mexican standoff" and a "war of attrition," predicting the oil market could trade within a $75-$95 range.
The latest increase in fuel costs heightens attention on the U.S. July consumer price report due Wednesday, with expectations for a 0.1% rise in the headline figure and 0.2% for the core measure. An upside surprise could revive bets on a Federal Reserve rate hike next month.
Trading in U.S. Treasuries was closed in Asia due to a holiday in Japan, but futures indicated slightly higher yields. The Reserve Bank of Australia is expected to hold rates steady at its policy announcement later Tuesday.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2%, and South Korea's Kospi rose 0.3%, with market sentiment remaining fragile due to the escalation in Gulf hostilities. Nasdaq and S&P 500 futures showed modest gains after Wall Street closed lower. European futures slipped slightly.
Nvidia announced a partnership with financial institutions to launch compute financing platforms for AI infrastructure. The yen weakened against the dollar, trading above 159, with analysts noting potential for further joint U.S.-Japan intervention. The dollar saw a marginal lift from rising oil prices, impacting the euro and sterling.