Asia stocks edge higher, oil up amid Gulf confusion
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SYDNEY, August 10 ------ Asian share markets tracked Wall Street higher after a soft U.S. jobs report pared the risk of a near-term rise in borrowing costs, though a lack of progress in Gulf peace talks saw oil prices creep higher.
Iran said on Sunday that a deal with Oman defining new shipping lanes in the Strait of Hormuz was in its final stages but reiterated that the waterway would only reopen once the United States met other conditions. Brent crude added 0.9% to $84.32 a barrel as shipping through the vital waterway remained at a trickle, while U.S. crude rose 0.7% to $78.74 a barrel.
The latest revival in fuel costs raises the stakes for the U.S. July consumer price report due on Wednesday, where analysts look for a rise of 0.1% in the headline and 0.2% for the core. Any upside surprise could rekindle speculation of a hike from the Federal Reserve next month. "Our forecast for core CPI of 0.22% is probably not quite firm enough to prompt a hike from the Fed at the September meeting, though repeated prints closer to 0.3% could do it," said Michael Feroli, chief U.S. economist at JPMorgan.
"One thing we are watching for is any rebound in core goods prices after a two-month stretch in which they fell." The futures market has scaled back the chance of a September move to around 44%, from 67% a week ago.
The pullback in rate risk helped Treasuries rally on Friday and saw Wall Street close at record highs. Japan's Nikkei (.N225), opens new tab followed that lead and rose 0.6% on Monday, while South Korea (.KS11), opens new tab added 0.5%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab edged up 0.3%.
Source: reuters.com
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