Asian shares got off to a cautious start on Monday as a jump in oil prices to three-year highs could inflame inflation fears and aggravate the recent hawkish turn by some major central banks.
Oil pushed past its July peaks as global output disruptions forced energy companies to pull large amounts of crude out of inventories, while a shortage of natural gas in Europe pushed costs up across the continent."We forecast that this rally will continue, with our year-end Brent forecast of $90/bbl vs. $80/bbl previously," wrote analysts at Goldman Sachs in a client note.
Stocks in Hong Kong have felt the most pressure, though the government in Beijing did add more liquidity to the financial system. The latest hawkish shift by the U.S. central bank, and several others globally, saw bond yields seesaw before ending last week sharply higher. Against a basket of currencies, the dollar was firm at 93.292 and just off August's 10-month top of 93.734.
The Social Democrats claimed a "clear mandate" to lead a government for the first time since 2005, ending 16 years of conservative-led rule under Angela Merkel.