SINGAPORE, April 6 (Reuters) -- Oil prices rose while stocks were mixed on Monday after US President Donald Trump warned of “hell” for Iran unless it reopens the Strait of Hormuz by his self-imposed deadline, but a report of a push for a ceasefire appeared to ease some nerves, Reuters reported.
Trump's repeated threats to destroy civilian infrastructure including power plants and bridges if the vital waterway is not open by Tuesday have put traders on edge for reciprocal attacks by Iran on targets in the Gulf states.
With liquidity thin as many countries around the region observed Easter Monday holidays, S&P 500 e-mini futures EScv1 fluctuated between gains and losses, down 0.1 per cent, while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.3 per cent. The Nikkei 225 .N225 rose 1.3 per cent, as South Korea's Kospi .KS11 advanced 0.9 per cent.
Investors took some confidence after Axios reported that the US, Iran and a group of regional mediators are discussing the terms for a potential 45-day ceasefire that could lead to a permanent end to the war, citing four US, Israeli and regional sources with knowledge of the talks.
Brent crude futures LCOcv opened higher1 before paring gains, rising 0.5 per cent to US$109.55 a barrel on the potential supply disruption.
"The markets are obviously nervous," said Sim Moh Siong, currency strategist at OCBC in Singapore.
"We've seen many of these deadlines being pushed out, and it's difficult to tell to what extent this deadline is going to stick, or will it be pushed out too," he added.
"There was a lot of de-escalation hope, but some of this hope has fizzed out over the weekend in the ramping up of threats to blow up Iranian power plants and bridges."
Markets looked through an agreement on Sunday by members of the OPEC+ group to raise its output quotas by 206,000 barrels per day for May, as several major oil producers behind the Strait of Hormuz have sustained damage to oil production facilities and transport infrastructure since the war started, according to Reuters.
On Friday, the US jobs report showed employment growth rebounded more than expected in March, with a 178,000 increase in nonfarm payrolls representing the biggest increase in more than a year. The unemployment rate fell to 4.3 per cent from 4.4 per cent, as people dropped out of the workforce.
The data complicates the picture for the Federal Reserve, which will next decide on monetary policy at a two-day meeting ending on April 29.
However, swaps pricing indicates the market is expecting no moves at all from the US central bank until September 2027, according to the CME Group's Fedwatch tool.
The US dollar index =USD, which measures the greenback's strength against a basket of six currencies, was down 0.1 per cent at 100.15. The yield on the US 10-year Treasury bond was up 0.8 basis point at 4.352 per cent.
In Tokyo, the yield on the Japanese government bond set a fresh record for the 21st century on concerns about rising inflation. The yield on the notes was up 3.0 basis points at 2.41 per cent, the highest since February 1999. Against the yen JPY=, the US dollar was flat at 159.555 yen.
Gold XAU= slid 0.6 per cent to $4,646.27. In cryptocurrencies, bitcoin BTC= was up 2.2 per cent at US$69,120.37, while ether ETH= advanced 3.0 per cent to US$2,130.78.
-- REUTERS
