By Amanda Cooper and Tom Westbrook LONDON, July 8 Oil prices surged more than 5% on Wednesday while global stocks and bond prices tumbled as investors fled risk assets after U.S.
President Donald Trump said the memorandum of understanding signed with Iran to end the Gulf conflict was “over”
Trump, who was speaking in Ankara where he was attending a NATO summit, added that he did not want to engage with Tehran. “As far as I’m concerned, it’s just a waste of time dealing with them,” he said. Market sentiment was already fragile after U.S. and Iranian forces had traded attacks in the Gulf. Brent crude futures leapt 5%, the most in a day since late May, to $78 a barrel.
While that was well shy of the peaks above $120 seen at the height of the conflict, it was enough to inject some fresh inflation risk into the bond market, particularly since months of conflict have drawn down global oil inventories. “It’s clearly not what the market’s wanted and it really weighs heavily on sentiment,” Chris Beauchamp, chief market strategist at IG, said. Benchmark 10-year U.S. Treasury note yields rose for a seventh day to a one-month high of 4.58%, while in Europe, yields on German and Italian 10-year bonds rose by the most in a month to also hit one-month highs at 3.075% and 3.9%, respectively.