📈 Global Market Shock: Oil Surges Above $111 as Asian Stocks and Bonds Tumble

• Macro Overview: Asian share markets slid on Monday (MSCI Asia-Pacific down 0.9%, Nikkei down 1.1%) as fresh drone attacks in the Gulf and the closure of the Strait of Hormuz drove energy prices and global bond yields higher, intensifying fears of inflation and global recession. • Energy and Commodities: Brent crude rose 1.9% to US$ 111.34 per barrel, and U.S. crude climbed 2.3% to US$ 107.84 per barrel. Analysts warn Brent could hit US$ 130–140pb by end-June if inventories reach critical levels, potentially pushing UK and Eurozone inflation near 10%. Meanwhile, gold dipped 0.2% to US$ 4,527 an ounce. • Bond Markets and Monetary Policy: Global bonds were hit hard on inflation fears. U.S. 10-year note yields hit a 15-month high of 4.631%, while Japanese yields reached peaks not seen since 1996. Markets now price in a 50-50 chance of a Federal Reserve rate hike this year to head off an inflationary spiral. • Corporate and Tech Outlook: Corporate earnings face scrutiny this week. The AI-driven bull run will be tested by upcoming earnings from Nvidia, while results from major retailers like Walmart will signal how consumers are coping with elevated energy costs. • National Context: For an import-dependent economy like Sri Lanka, escalating global oil prices and a strengthening U.S. dollar (benefiting from safe-haven flows) typically pressure import bills and external reserves, while rising global inflation impacts key export destinations.