GLOBAL MARKETS: Asia stocks gain, oil prices up amid confusion over Gulf peace talks

SYDNEY - Asian share markets tracked Wall Street higher on Monday after a soft U.S. jobs report pared the risk of a near-term rise in borrowing costs, though a lack of progress in Gulf peace talks saw oil prices creep higher.

Iran said on Sunday that a deal with Oman defining new shipping lanes in the Strait of Hormuz was in its final stages but reiterated that the waterway would only reopen once the United States met other conditions.

Brent LCOc1 crude added 1.0% to $84.40 a barrel as shipping through the vital waterway remained at a trickle, while U.S. crude CLc1 rose 0.8% to $78.80 a barrel. O/R

The latest revival in fuel costs raises the stakes for the U.S. July consumer price report due on Wednesday where analysts look for a rise of 0.1% in the headline and 0.2% for the core.

Any upside surprise could rekindle speculation of a hike from the Federal Reserve next month.

"Our forecast for core CPI of 0.22% is probably not quite firm enough to prompt a hike from the Fed at the September meeting, though repeated prints closer to 0.3% could do it," said Michael Feroli, chief U.S. economist at JPMorgan.

"One thing we are watching for is any rebound in core goods prices after a two-month stretch in which they fell."

The futures market 0#FF: has scaled back the chance of a September move to around 44%, from 67% a week ago. 0#USDIRPR

The pullback in rate risk helped Treasuries rally on Friday and saw Wall Street close at record highs. Japan's Nikkei .N225 followed that lead and rose 2.0%, while South Korea .KS11 added 1.1%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.8%.

Chinese blue chips .CSI300 eased 0.4% after data showed consumer and producer price inflation came in under forecasts in July, underlining the softness of domestic demand.

DOUBLE-DIGIT EARNINGS GROWTH

For Europe, EUROSTOXX 50 futures STXEc1 and DAX futures FDXc1 both dipped 0.1%, while FTSE futures FFIc1 fell 0.4%.

S&P 500 futures ESc1 were flat, while Nasdaq futures NQc1 firmed 0.2%, having climbed 5% last week amid a slew of upbeat earnings reports.

Analysts at BofA noted that with nearly 90% of S&P 500 results in, earnings per share were up 30% on the year after excluding investment gains at Alphabet and Amazon. A 76% EPS beat rate matched the strongest level since 2021.

"AI remains the stand out, with median EPS growth of 28% versus 12% for non-AI-related stocks, though consensus expects AI to slow to 16% next quarter," they said in a note.

Earnings are lighter this week but include semiconductor company Applied Materials AMAT.O, networking equipment maker Cisco CSCO.O and cloud infrastructure technology company CoreWeave CRWV.O.

In bond markets, yields on 10-year Treasuries US10YT=RR were a shade higher at 4.662% with the market bracing for $125 billion in new issuance this week.

The drop in yields and general improvement in risk had pulled the U.S. dollar broadly lower, with the euro just off a seven-week top at $1.1554 EUR=EBS.

The dollar added 0.2% on the yen to 158.23 JPY=EBS, though investors were still wary of intervention should they push the yen down too far.

Bank of Japan policy makers warned of mounting inflation risks that could require a nimble, faster-than-expected pace of interest rate increases, a summary of opinions at their July meeting showed, boosting the case for a September hike.

In commodity markets, the drop in yields helped non-interest-paying gold hold at $4,320 an ounce XAU=, having climbed more than 7% last week. GOL/

Reporting by Wayne Cole; Editing by Shri Navaratnam and Stephen Coates