Energy markets were the focal point after crude prices extended losses sparked by political upheaval in Venezuela. U.S. President Donald Trump said the country would “turn over” as much as 50 million barrels of oil to be sold at market prices following the overthrow and capture of its leader, raising expectations of a sudden increase in global supply. U.S. crude slipped 1.1% to $56.48 a barrel, while Brent fell 0.8% to $60.22.
The prospect of cheaper energy weighed on oil-linked assets but supported broader economic optimism. “The most likely outcome is a boost to the global economy because of that oil,” said Michael McCarthy, chief executive of Moomoo Australia and New Zealand, noting that lower energy costs could underpin growth even as they depress crude prices. He cautioned, however, that heightened geopolitical uncertainty could blunt those benefits.
Equity markets reflected the crosscurrents. MSCI’s broad Asia-Pacific index outside Japan edged down 0.2%, dragged lower by a 0.25% decline in Japan’s Nikkei. Tokyo stocks were pressured after China announced a ban on exports of dual-use goods to Japan, the latest response to comments by Japanese Prime Minister Sanae Takaichi regarding Taiwan. In contrast, Australia’s S&P/ASX 200 rose 0.3%, buoyed by its heavy weighting toward commodity producers.
Resource shares found support from a powerful rally in industrial metals. Copper surged to a record high in the previous session, while nickel jumped more than 10% on supply concerns, reinforcing gains across mining stocks even as oil retreated.
Currency markets were steadier. The dollar index held near 98.60 after a 0.2% rise overnight, supported by demand for safety amid geopolitical strains from Venezuela to China. The euro was flat at $1.169, while the yen weakened slightly to 156.73 per dollar.
In the United States, equity benchmarks shrugged off global tensions to notch fresh record highs. Attention is now turning to incoming U.S. data for guidance on monetary policy. Markets are pricing in two additional Federal Reserve rate cuts this year, with Friday’s monthly jobs report expected to be pivotal. Ahead of that, investors will watch the JOLTS survey and ADP private payrolls data due later on Wednesday.
Economic releases in Asia offered mixed signals. Australian consumer prices rose by less than expected in November, with core inflation easing marginally. In Japan, a private-sector survey showed service-sector growth slowed to its weakest pace since May.
Elsewhere, spot gold slipped 0.6% to $4,469 an ounce, while copper eased 0.1% to $13,111.50 a tonne. Early European futures pointed modestly higher, with Euro Stoxx 50 and German DAX contracts edging up, though FTSE futures lagged. U.S. S&P 500 e-mini futures were flat.
Cryptocurrencies moved lower, with bitcoin down 0.8% at $92,499 and ether slipping 0.5% to $3,257, rounding out a session marked by volatility and shifting risk sentiment.