Macro update
Asian equities extend gains: Regional stocks advanced after US consumer prices rose 0.1% in July as expected, bringing annual inflation down to 3.4% and reducing the market-implied probability of a September Federal Reserve rate hike to 40% from 54% a week earlier.
Chipmakers lead the regional rally: South Korea’s KOSPI jumped 4.4% and Japan’s Topix reached a record high as semiconductor stocks followed overnight gains in US AI shares, with SK Hynix rising more than 7% and Advantest climbing over 5%.
Yen strengthens as BOJ rate expectations move forward: The dollar eased towards ¥159 as investors brought forward expectations for Bank of Japan tightening to September, supported by Japanese wholesale prices rising 7.2% year-on-year in July.
Oil prices retreat from recent highs: Brent crude slipped towards $90 a barrel and US crude eased to around $82 as weaker demand forecasts from OPEC and the IEA, combined with a surprise 17.4 million-barrel increase in US inventories, outweighed ongoing concerns over Gulf supply disruptions.
Gold consolidates near a two-month high: Bullion held around $4,400 an ounce after rising almost 1% in the previous session to its highest level since 5 June, with investors now awaiting US producer price data for further evidence that inflationary pressures are easing.
US-Iran tensions continue to support oil prices: Washington and Tehran remain at an impasse over efforts to revive June’s interim agreement, with no meaningful progress reported and the Strait of Hormuz still closed, keeping a geopolitical risk premium embedded in crude prices.