📉 Asian Stocks Slip as Crude Oil Surges Amid US-Iran Tension

• Market Overview: Asian equity markets declined on Monday while global bond yields continued to rise, driven by fears of prolonged high inflation and tighter monetary policy. MSCI's Asia-Pacific index eased 0.6%, South Korea fell 2.4%, and Chinese blue chips dropped 1.4%. • Energy & Commodities: Brent crude jumped 2.1% to $106.49/bbl (up ~18% this month), and US crude rose 1.5% to $93.84/bbl following stalled US-Iran truce negotiations regarding the Strait of Hormuz. Record-high diesel prices present a broader inflationary threat to energy-importing economies like Sri Lanka. • Monetary Policy & Bond Yields: Markets expect further rate hikes, with a 66% probability of a Fed rate hike in October. US 30-year Treasury yields rose to 5.5185% (highest since 2004), while 2-year yields climbed 55 bps this month, reflecting a "higher-for-longer" interest rate environment. • Economic Growth: Despite rising borrowing costs, global economic activity remains resilient, supported by strong US economic performance (Atlanta Fed projecting 5.0% quarterly growth) and significant ICT/BPM and AI investment driving growth across Asia and Europe.