By Johann M Cherian and Ankur Banerjee Aug 26 Global stocks edged up and weaker oil prices pushed bond yields lower on Wednesday on hopes that the vital Strait of Hormuz could soon reopen, while investors awaited U.S. inflation data and another pivotal earnings report from AI…
avyweight Nvidia. Iran and Oman said they had discussed “a joint temporary navigational corridor” through the Strait of Hormuz and agreed to clear it of mines, rejuvenating hopes for a breakthrough in the nearly six-month conflict that has roiled oil markets and stoked global inflationary worries
Brent crude futures fell for a third straight day on Wednesday, sliding nearly 3% to $85.95 per barrel on the prospect of more supply coming through the Strait, which handled a fifth of the world’s traded oil before the war. That helped push short-term bond yields, sensitive to central bank interest rate expectations, lower. The yield on 2-year German bonds dropped for a second day to a more than one-week low of 2.771%, while that on its U.S. counterpart was steady at 4.195% after falling about 4 basis points on Tuesday. [O/R] [US] Oil prices have “moved away from that 90+ move, so there is some optimism that they could cool further.
But we really need to see the traffic move through the Strait of Hormuz to get more comfortable with the idea that inflationary pressures are cooling considerably,” said Fiona Cincotta, a senior markets analyst at City Index. MSCI’s world stocks index was up 0.1%, with Europe’s benchmark STOXX 600 pinned at its highest in over one week. U.S.