Oil Rises on Mideast Attacks, Asia Stocks Advance: Markets Wrap

(Bloomberg) — Crude oil jumped on heightened tensions in the Middle East that threats global trade. Stocks in Asia gained.

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Both Brent and West Texas Intermediate crude rose more than 1% to their highest since November in intraday trading after the US said Iranian-backed militants killed three service members, with US President Joe Biden pledging to retaliate. Oil had also climbed on Friday after Houthi rebels attacked a vessel carrying Russian fuel.

Shares rose at the open in Japan, led by energy producers following the gains in oil. Stocks in South Korea also advanced, while futures contracts for US stocks slipped as investors weighed risks from the Middle East conflicts at the start of a crucial week for the global policy outlook.

“The news of three US troops being killed by a drone attack, and President Biden saying ‘we shall respond,” will likely dial up the market’s focus on the region,” said Andrew Ticehurst, a rates strategist at Nomura Inc. in Sydney. “Still, I’d expect data and central bank meetings to dominate a busy week for markets, with China PMI, the FOMC and BOE gatherings and US payrolls among the highlights.”

The dollar edged higher and Treasuries steadied in Asian trading after retreating in the US on Friday. Mixed economic data spurred concerns the Federal Reserve will signal patience about the pace of interest-rate cuts when it meets on Wednesday.

This week also brings a slew of key data, from European GDP on Tuesday, to China PMI and Australian inflation on Wednesday, then European inflation and a Bank of England policy decision on Thursday.

“We think the Fed is likely to reiterate its data-dependent stance and caution that it is willing to exercise patience,” analysts at ANZ Bank Ltd., including Miles Workman, wrote in a report. “The Fed will be cautious about any reacceleration of inflation pressures from above-trend growth and the resilient labor market.”

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Chinese equities will look…