Asian equity markets are bracing for losses following a turbulent trading session in the US, where the twin pressures of escalating US-Iran conflict and stubborn inflation data whipsawed investors.
The dual threat driving the sell-off
The US-Iran conflict has kept oil prices elevated, creating an energy cost nightmare for import-dependent Asian economies. US inflation data has refused to cooperate with the “rates are coming down” narrative that investors desperately want to believe.
South Korea’s Kospi index provided the most dramatic example back in March, when it plunged over 12% intraday in a session that rattled even veteran traders. Japan, another major energy importer, has faced similar headwinds as rising crude costs eat into corporate margins across the manufacturing sector.
Rising oil prices have triggered bond sell-offs and forced markets to reprice rate-hike expectations.
