Asian Markets Poised to Rise Amid Easing Oil Prices and Strait of Hormuz Developments

Asian stock markets are expected to open higher, buoyed by a recent decline in oil prices and optimism regarding increased tanker traffic through the Strait of Hormuz. Equity-index futures indicate gains in Japan, Australia, and Hong Kong, following Wall Street's positive performance where the S&P 500 recorded its best day since February, led by technology shares.

Nvidia Corp. rose 1.7% after projecting at least $1 trillion in revenue from artificial-intelligence chips through the end of 2027. In the bond market, Treasuries advanced as lower oil prices alleviated inflation concerns, while the dollar experienced its worst day in over a month.

The improved risk appetite is partly attributed to expectations that major economies may release petroleum reserves to offset potential supply disruptions. President Donald Trump has renewed calls for allies to help safeguard the Strait of Hormuz, a critical shipping lane where threats to oil flow have heightened inflation worries. Bob Savage, head of markets strategy and insight at BNY, noted, "As the war with Iran continues, oil prices are dictating the mood and headlines from the Strait of Hormuz are driving markets."

Trump expressed frustration with other nations' lack of commitment to ensuring vessel transit through the strait. He also mentioned requesting China to delay a summit with President Xi Jinping by about a month to focus on overseeing the Iran conflict. Hideyuki Ishiguro, chief strategist at Nomura Asset Management, commented, "The possibility that the US-China meeting could be postponed by one month may also be taken as a sign that the war with Iran is likely to drag on longer than expected. That would weigh on equity markets."

The International Energy Agency, which recently agreed to a record release of emergency reserves, stated it has additional resources available if needed. Treasury Secretary Scott Bessent indicated that mitigating higher oil prices would depend on the conflict's duration, noting that prices would be "probably much lower" than $80 in a couple of months' time.

The effective closure of the Strait of Hormuz has led countries like the United Arab Emirates and Kuwait to reduce oil output. However, some vessels are beginning to navigate through the waterway. In the bond market, Treasury yields declined across maturities. U.S. industrial production rose modestly in February, supported by gains in manufacturing and mining. Investors are now focusing on the Federal Reserve's upcoming decision, with expectations of holding rates steady amid the ongoing conflict.

The producer price index, a key inflation measure, is also anticipated, alongside meetings of the Bank of England, European Central Bank, and Bank of Japan this week. The Reserve Bank of Australia is widely expected to deliver a rate hike today. Daniela Hathorn, senior market analyst at Capital.com, observed, "Before the outbreak of hostilities, inflation data had been moving in a relatively encouraging direction. For some economies, particularly the US where growth has remained relatively robust, there may be more room to absorb higher energy prices."

Corporate highlights include Millennium Management redeeming its investment from Scopia Capital Management just over a year after backing the hedge fund manager. Atlassian Corp. is facing allegations from U.S. labor board prosecutors for illegally firing an employee who criticized its CEO. Alibaba Group Holding Ltd. is consolidating its AI services under a single business unit, signaling its commitment to profiting from artificial intelligence. Wall Street banks, led by JPMorgan Chase & Co., have attracted sufficient demand for nearly $15 billion of debt to support the leveraged buyout of Electronic Arts Inc., the largest of its kind. Bank of America Corp. has agreed to settle a proposed class-action lawsuit on behalf of Jeffrey Epstein victims who accused the bank of aiding in the financier's sex-trafficking.

Market movements include a 0.6% rise in Hang Seng futures, a 0.8% increase in S&P/ASX 200 futures, and a 1.3% gain in Nikkei 225 futures. In currencies, the euro and Japanese yen remained relatively stable, while the offshore yuan and Australian dollar showed little change. Bitcoin rose 0.9% to $74,882.99, and Ether increased 1.1% to $2,369.4. In commodities, spot gold remained steady at $5,007.41 an ounce, and West Texas Intermediate crude rose 0.7% to $94.18 a barrel.