Markets Tumble as Dollar Peaks and Oil Prices Surge Amid Economic Uncertainty

Asian stocks dropped as the dollar hit a 14-month high, influenced by a strong U.S. payroll report. Rising oil prices, due to Russian sanctions, and increased Treasury yields further pressured equity valuations. Meanwhile, China's export growth surged as markets adjust to economic shifts and upcoming earnings reports.

Asian markets experienced broad declines on Monday as the dollar reached a 14-month peak, following an exceptionally strong U.S. payrolls report which boosted bond yields and challenged high equity valuations at the start of earnings season. The data also increased the stakes for upcoming U.S. consumer price figures.

Adding pressure was a surge in oil prices to four-month highs, driven by reduced oil shipments from Russia as the U.S. tightened sanctions. China's export growth accelerated in December, with a recovery in imports, while facing potential trade risks with the new U.S. administration.

Federal Reserve rate cut expectations have been adjusted down to 27 basis points for 2025, reflecting a shift in economic predictions following strong job numbers and persistent inflation concerns. This shift saw 10-year Treasury yields hitting 14-month highs, presenting a challenge to equity markets as corporate earnings season gets underway.

(With inputs from agencies.)