Crude prices, the dollar and bond yields were sharply elevated early on Thursday after OPEC agreed to a deal to reduce output to clear a supply glut that has crunched oil prices and stoked global deflationary pressures. 

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The Organization of the Petroleum Exporting Countries on Wednesday agreed to its first output cut since 2008, with Saudi Arabia accepting "a big hit" on its production. Non-OPEC Russia will also join output reductions for the first time in 15 years to help OPEC prop up oil prices.

U.S. crude oil soared more than 9% overnight to a one-month high just shy of $50.00 a barrel. The contracts were a fraction lower at $49.22 a barrel early on Thursday. Brent crude were just above $51.00 a barrel after rallying to a six-week peak of $52.37.

The jump in oil prices added to inflation expectations in the United States, which were already high on prospects that president-elect Donald Trump would enact reflationary policies funded by large fiscal stimulus.

As a result U.S. Treasuries resumed their rout, with prices sliding and yields spiking, to send the dollar rallying against its peers. The yield on 30-year bonds , which are most sensitive to inflation eroding their value, climbed about 9 basis points to 2.39% overnight, taking it back towards 14-month peaks marked last week.

"The reflation trade continues to work in earnest, this time Trump has taken a back seat and OPEC and Russia have taken the initiative and lit the fuse under the oil price," wrote Chris Weston, chief market strategist at IG in Melbourne.

"The consensus was that we would get some sort of loose agreement from the collective that kept oil supported, but left the market asking many more questions. What we have seen however has been real meat on the bone."

The dollar touched a 9-1/2-month high of 114.830 yen, adding to gains made overnight when it surged 1.8%. The euro was steady at $1.0596 after shedding 0.6% the previous day.

The dollar index was firm at 101.51 after rallying overnight from a low of 100.84.

The Australian dollar, sensitive to changes in commodity prices and risk sentiment, was up 0.2% at $0.7396 after losing more than 1% the previous day.

In Asian equities, Australian stocks were up 0.7% and Japan`s Nikkei gained more than 1% on a weaker yen to hit an 11-month peak

MSCI`s broadest index of Asia-Pacific shares outside Japan was up 0.1%.

The region`s stocks failed to draw much incentive from Wall Street, where shares ended mostly lower on Wednesday as drops in utilities and technology offset energy`s surge. [.N]

Spot gold was firm at $1,172.46 an ounce after sliding 1.3% overnight to a 10-month low of $1,170.35 on the dollar`s oil-induced surge.