Asia shares bounce, others cautious as oil rises

Asian shares experienced a rally on Monday following a strong US jobs report, which was deemed positive for global growth despite the likelihood of a potential interest rate increase. The incident in the Gulf, involving the US and Iran attacking ships, also caused oil prices to tick higher, with Brent crude climbing 0.2% to $96.45 a barrel.

Europe's Central Bank is expected to raise rates to 2.75% on Thursday, with a 75% probability of further hikes by December. This potential for rate hikes has left European stocks on edge. The U.S. holiday on Wall Street resulted in light trading, with both S&P 500 and Nasdaq futures slightly lower. MSCI's Asia-Pacific index, excluding Japan, rose 0.9%.

However, rising bond yields pose a challenge for equity valuations, with 10-year Treasury yields nearing their highest point since late 2023 at 4.7840%. A significant increase in the core consumer price index could propel yields even closer to the 5.0% threshold. Bruce Kasman, JPMorgan's global head of economics, anticipates core CPI to rise by 0.21%, which would likely keep the Fed on hold for now. However, the central banks are increasingly active in response to the energy shock.