Dollar shines as oil surge spooks investors
Oil prices scaled one-year highs on Thursday, while world stocks eyed their longest losing streak in two years as worries deepened about persistently high interest rates, sending investors to shelter in the safety of a surging U.S. dollar.
A surprisingly big drop in crude stocks at Cushing, Oklahoma, stoked concern that fuel demand is outstripping production right when markets least needed another supply-side shock.
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crude rose 3.6% overnight and another 1% on Thursday to hit $95 a barrel for the first time since August 2022. Brent futures hit a one-year high at $97.69.
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The prospect of higher energy costs and the spectre of sticky inflation put more pressure on longer-dated bonds, with benchmark 10-year Treasury yields up more than 50 basis points this month to hit a 16-year peak at 4.642%.
«The world keeps getting more expensive,» said Capital.com analyst Kyle Rodda, in a note. «The rise in oil increased the upward pressure on bond yields (and) the combo of higher oil, higher yields, and a higher greenback tends not to augur well for equities.»
MSCI's index of global equities moved a fraction lower and could notch its 10th straight daily fall on Thursday, which would equal a long losing streak from 2021.
MSCI's index of Asia-Pacific shares outside Japan was pinned near a 10-month low in early trade.
Japan's Nikkei fell 1.5%, and the strong dollar has the Japanese yen within a whisker of 150-per-dollar, seen as a level likely to provoke an official response or intervention.
Dollar/yen hit 149.71 on Wednesday and traded at 149.40 on Thursday in Asia. The euro dropped 0.7% to a nine-month low of $1.0488 on Wednesday and last bought $1.0511.
It is down more than 3% in September to eye its largest monthly
