Shares skid in Asia as oil rises, rate hikes loom

Business Recorder reported that Asian share markets slid on Monday as renewed supply worries pushed oil prices higher, while investors prepared for possible interest rate increases in the United States and Japan this week. Brent gained 3% after fresh strikes hit Saudi Arabia and vessels in the Gulf, adding to a pipeline attack in Saudi Arabia and a Houthi advance in Yemen. A planned Monday meeting in Oman between Iran and Gulf Arab states, intended to discuss reopening the Strait of Hormuz, was postponed.

Market pricing now puts 86% odds on a 25 basis point Fed hike on Wednesday, after a hot US consumer price report on Friday. JPMorgan's chief US economist Michael Feroli expects two Fed hikes, one in September and another in December, and warns that failing to act could damage the institution's credibility. Investors also see a 76% chance that the Bank of Japan raises its cash rate to 1.25% when it meets on Friday.

The 10-year Treasury yield eased slightly to 4.967% after heavy selling in recent weeks, while gold dipped 0.3% to $4,336 per ounce as higher bond yields reduced its appeal. Goldman Sachs chief US equity strategist Ben Snider said strong corporate earnings should support Wall Street if borrowing costs rise. The dollar held at 153.49 yen after a drop of around 4% over two weeks.