Audio By Carbonatix
Oil and gold prices climbed while regional shares edged nervously higher on Wednesday as geopolitical tensions ratcheted up ahead of key U.S. inflation data.
The yen was mostly flat against the dollar, having unwound much of its gains following rare currency-market intervention by Japan and the United States.
The U.S. and Yemen's Iran-aligned Houthis reported separate attacks on shipping, while Asia was rattled by an early morning missile launch by North Korea. Markets remained focused on U.S. consumer price index data later in the session for signals of timing for a potential Federal Reserve rate hike.
"Market sentiment is lukewarm amidst lingering geopolitical risk and as market participants head into U.S. CPI data," Kyle Rodda, a senior financial market analyst at Capital.com, wrote in a note.
"The lack of substantial news or progress in talks, with Iran doubling down on its commitment to govern the Strait of Hormuz, is keeping the risk for oil prices skewed to the upside and U.S. indices on hold," he added.
U.S. crude rose 0.89% to $83.94 a barrel, and Brent advanced to $89.60 per barrel, up 0.78% on the day. Both benchmarks settled more than $1 higher on Tuesday, marking their highest closes since July 31 and extending gains after jumping about 5% on Monday.
Spot gold gained 0.46% to $4,387.03 an ounce. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5%, while Japan's benchmark Nikkei share gauge traded flat as the market reopened after a holiday.
Four crew members of an Egyptian-owned ship were killed in an attack by Houthis on Tuesday, Yemen's transport ministry said, while the U.S. military said it struck a container ship attempting to sail toward an Iranian port. The fatalities would mark the first from a Houthi strike on shipping since the Iran war began on February 28.
The war shows no signs of ending despite repeated claims from U.S. President Donald Trump of an imminent deal.
A North Korean ballistic missile fired off the Korean Peninsula's east coast came days ahead of major joint military exercises by Seoul and Washington long denounced by Pyongyang. Meanwhile, Taiwan condemned planned naval drills between China and an Indonesian warship off the island's east coast.
Wednesday's CPI data will not capture the most recent rise in energy costs, but it could still prove instrumental in setting expectations for the Fed's meeting next month, with money markets showing an even chance of a hike .
Consumer prices are expected to edge up 0.1% in July after falling 0.4% in June, according to a Reuters poll. Annual CPI inflation is forecast to slow to 3.4% from 3.5% a month earlier.
"Everyone's got their eyes on the CPI report," Skye Masters, head of markets research at National Australia Bank, said on a podcast. "If you do see the print coming in at zero, I think you'll obviously see a reasonable rally in Treasuries as the market unwinds expectations for the Fed tightening."
Markets are also increasingly pricing in an early rate hike in Japan, putting pressure on the nation's shorter-dated bonds. The yield on the 5-year Japanese government bonds rose to 2.1%, a record high, while the 2-year yield reached a 31-year peak of 1.63%.
The dollar index , which measures the greenback against a basket of currencies, rose 0.04% to 99.85. The euro was down 0.02% at $1.1538.
The Japanese yen weakened 0.03% against the greenback to 159.31 per dollar, remaining off last week's high of 155.20 after several suspected rounds of intervention. Sterling weakened 0.01% to $1.3501.
In early European trades, the pan-region Euro Stoxx 50 futures were down 0.15% at 6,563, German DAX futures fell 0.12% at 26,444, and FTSE futures lost 0.25% to stand at 10,825.
U.S. stock futures, the S&P 500 e-minis , were up 0.03% at 7,750.
Latest Stories
-
Credit Risk Management Directive: BoG to begin implementation for banks, others from July 1, 2027
14 minutes -
Ghana Brands Awards 2026: Leading brands, business trailblazers to shine on November 20
30 minutes -
T-bills auction: Demand improves as government exceeds target by about 76%; interest rates soften
36 minutes -
Ziope undertakes initiative to build a technologically inclined community, commissions self-help ICT lab
1 hour -
ECG announces power outage in parts of Tema, Central Region due to network fault, maintenance
1 hour -
When the Gospel Becomes a Weapon: The church, blackmail and the abuse of faith
2 hours -
JoyNews’ Jacqueline Ansomah Yeboah selected for UK Media Excellence for Emerging Technology Fellowship
2 hours -
Mental Health Alliance urges government to operationalise Mental Health Fund
2 hours -
Ghana–Holy See agreement heads to Parliament after Cabinet approval
2 hours -
Luv FM Corporate Games 2026: Kumasi Central Prisons, Amanfiman Bank win big amid fun
3 hours -
WAFU B U17: Ghana top Group A after win over Togo
3 hours -
Ho Central Mosque reopens amid unresolved leadership dispute that led to closure
4 hours -
Minority caucus questions GH¢16.4m in Ablakwa’s SA evacuation spending, demands independent audit
5 hours -
Gender Ministry meets Nana Akua Addo’s husband over domestic violence after hospital discharge
5 hours -
UG Vice-Chancellor urges swift operationalisation of National Research Fund
6 hours