DailyNaijaInfo reports that Oil prices surged by almost three percent on Monday 18th of December as more companies halted shipping through the Red Sea due to attacks on vessels by Yemen’s Iran-backed Huthi rebels.

In the meantime, US stocks aimed to continue the previous week’s rally, anticipating a potential interest rate cut by the US Federal Reserve next year. However, the momentum seemed to dwindle in Asia and Europe.

On Monday, Yemen’s Iran-backed Huthi rebels claimed responsibility for attacking two “Israeli-linked” vessels in the Red Sea, part of a series of strikes targeting ships entering the Red Sea to pressure Israel over its conflict with Hamas in the Gaza Strip.

Five major shipping companies, including three of the world’s largest, have rerouted their vessels from the Red Sea. British oil giant BP and Taiwan’s Evergreen joined the list of companies suspending transit on Monday.

Ships must traverse the Red Sea to access the Suez Canal, a critical route for cargo and oil.

Investors are closely monitoring the Bank of Japan’s meeting this week, although speculation about a shift from its current no-rate-hike policy has diminished.

Despite a slowdown in buying activity on Friday, following record highs for the Dow and Nasdaq on Wall Street last week, equity indices are poised to finish the year strongly.

The Federal Reserve’s indication of easing monetary policy, decreasing inflation, and a stable economy have contributed to positive market sentiment.

“We’re into the final furlong, and unless there’s a big surprise, then we’re looking at some very healthy gains for the most part in 2023,” noted Neil Wilson, chief market analyst at Finalto Trading Group.

Last week, several Federal Reserve officials tempered expectations of significant rate cuts in the coming year. Despite some predictions suggesting up to six cuts, the bank’s “dot plot” forecast indicated a projection of three cuts.

The Bank of Japan is set to announce its decision on Tuesday. While speculation exists about a potential shift from years of ultra-loose policy, analysts anticipate that such change might not occur for a few months.

Maintaining negative interest rates and adhering to a policy of controlling bond prices to stimulate the economy, Japanese officials are now reportedly considering a shift, given the rise in inflation and the challenges faced by the yen.

“The BoJ has little need to rush into making policy changes,” said economists at Societe Generale.

“But markets will be watching for any sign.“