Stocks slip in Asia as oil climbs, bonds retreat

Asian stock markets slipped on Monday as oil prices surged and bonds faced pressure ahead of a week filled with economic news. US President Donald Trump rejected Iran's proposal to reopen the Strait of Hormuz, claiming Iran was desperate to make a deal. Despite this, talks were expected to continue. Brent futures rose by 2.1% to $106.49 a barrel, marking almost an 18% gain this month, while US crude futures increased by 1.5% to $93.84 a barrel.

Diesel prices hit all-time highs, raising concerns about inflation. Central banks, including the Reserve Bank of Australia, have implemented rate hikes. The Federal Reserve is likely to hike rates again in October, with around 90 basis points of tightening priced until late next year. Strong US economic data has supported expectations for corporate earnings, helping equity prices despite surging bond yields.

However, Japan's Nikkei remained flat, while South Korea's stock market fell by 2.4%, MSCI's Asia-Pacific index excluding Japan declined by 0.6%, and Chinese blue chips dropped by 1.4%, down more than 5% for the month. On Wall Street, S&P 500 futures fell by 0.3% and Nasdaq futures dropped by 0.5%. In Europe, EUROSTOXX 50 futures rose by 0.4%, DAX futures increased by 0.3%, and FTSE futures added 0.2%.

Yields on 30-year Treasuries rose to 5.5185%, nearing their highest since 2004, following a 27-basis-point increase this month. The global expansion seems to have entered a broad-based phase rarely seen in the past two decades, according to Bruce Kasman, chief economist at JPMorgan.