Asia stocks edge higher, oil up amid Gulf confusion

Asian stock markets followed Wall Street higher on Monday as a disappointing US jobs report reduced the risk of an upcoming increase in borrowing costs. However, progress at Gulf peace talks hindered oil prices from falling, causing them to rise slightly. Iran announced that a deal with Oman regarding new shipping lanes in the Strait of Hormuz was nearing completion, but insisted the waterway would reopen only after the United States fulfilled additional conditions.

Brent crude climbed 0.6 percent to US$84.04 a barrel, with both Brent and US crude gaining 0.5 percent to US$78.56 a barrel. The increased fuel costs heighten expectations for the upcoming US July consumer price report, where analysts anticipate a 0.1 percent rise in the headline and 0.2 percent in the core.

Analysts are watching for any positive surprise that could spark discussions about a Federal Reserve rate hike next month. Current forecasts suggest a core CPI of 0.22 percent, which might not be sufficient for a September hike, but consistent readings close to 0.3 percent could change this. The futures market's estimate of a September rate hike stands at around 45 percent, down from 67 percent a week earlier.

The US bond market saw a slight increase in yields on 10-year Treasuries to 4.662 percent, as investors await the issuance of $125 billion in new bonds this week. The drop in yields and overall improvement in risk led to a decrease in the US dollar's value, with the euro nearing a seven-week high of US$1.1553. The US dollar also gained 0.3 percent against the Japanese yen.

Gold prices remained stable at US$4,333 an ounce, having risen more than 7 percent over the past week.