Oil Surges and Treasury Yields Climb Amid Houthi Airport Attacks

The strikes on King Khalid International Airport and the Abha facility have intensified a regional conflict that threatens the Bab al-Mandeb Strait, a critical artery for global oil transport. ANZ Research analysts noted that maritime instability is spreading, with at least nine attacks reported in the Strait of Hormuz this month alone. This volatility occurs against a backdrop of tightening monetary policy, as markets digest Federal Reserve minutes suggesting further rate hikes before year-end.

Energy markets reacted sharply to the regional instability. West Texas Intermediate crude rose 1.8% to $89.86 a barrel, while Brent crude climbed 2.15% to $102.35. Financial markets showed broad signs of strain, with Asian equity indices retreating. The Nikkei fell 0.9%, the Kospi dropped 1.6%, and the Hang Seng slipped 0.7% as semiconductor manufacturers led the decline. Samsung Electronics shares retreated 1.6% after the company’s preliminary quarterly earnings failed to satisfy high investor expectations.

Meanwhile, the 10-year Treasury yield held firm at 5.307%, following a brief surge to a 24-year high of 5.361%. While U.S. debt remained elevated, Asian government bonds saw minor relief, with Australian and Japanese 10-year yields retreating slightly during Thursday's trading session.