- Nikkei sinks over 2% as yen surges, KOSPI slumps 4% on chip selloff
- UBS forecasts gold at $5,200 by June 2027 despite near-term pullback risk
- Reserve Bank of India expected to hold rates as inflation stays in comfort zone, Reuters poll shows
- China’s RatingDog manufacturing PMI eases to 50.9, eighth month of growth
- China private survey July manufacturing PMI 50.9 (expected 51.5, prior 51.7)
- PBOC sets USD/ CNY reference rate for today at 6.7898 (vs. estimate at 6.7364)
- Yen rockets as Japan bond yields hit record on rate hike bets, more intervention speculation
- Japan manufacturing output grows at fastest pace in 12.5 years in July
- Japan’s Mimura says joint yen action culmination of currency alliance
- JP Morgan says US Treasury has limited firepower for yen intervention
- Key oil chokepoints remain starved of traffic. Red Sea, Hormuz tanker traffic stays deeply depressed
- Australia manufacturing PMI hits 52.0 as output growth returns in July
- Bessent, Japan confirm Friday’s joint yen intervention, vow further action
- Reports of Iran firing cruise missile at US oil tanker, also UK Navy reports incident
- Globex is open and Trump is getting his way: Oil down, stocks up
- Trump frames yen intervention as financially beneficial to US
- Trump claims Hormuz deal done, denuclearisation talks to start tomorrow
- Weekend – Beijing to accelerate existing infrastructure spending, not new stimulus
- Retail bagholder slaughter – SpaceX shares fall over 50% from peak. Musk was right.
- Japan’s finance minister will confirm joint (with US) conducted yen intervention on Monday
- Weekend – OPEC+ agrees 188,000 bpd September hike, completing rollback of 2023 output cuts
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Summary:
- Oil fell nearly 5%, down as much as 6% on the open, after Trump said he’d cancelled Iran strikes and hinted at a Hormuz deal
- Trump’s Hormuz claim remains unconfirmed; Iran has denied similar prior claims as lies
- Reports of an Iranian cruise missile attack towards a US tanker and UK Navy report on an incident in Hormuz undercut the de-escalation narrative
- US equity futures moved up around 0.5% on the open, a muted reaction versus oil’s slide
- Bessent and Japan’s MOF officially confirmed Friday’s joint yen intervention, vowing further action if needed
- Japan’s Mimura signalled possible further BOJ coordination to support the yen
- USD/JPY plunged below 156 as the yen extended its intervention-driven rally
- Chatter of a wall of importer USD-buying bids around 155 is circulating as a potential support level
- Nikkei and KOSPI both sold off, hit by the stronger yen and separate AI-chip valuation concerns respectively
- China’s RatingDog PMI missed forecasts, easing to 50.9 in July from 51.7, though export orders returned to growth
Oil slid nearly 5% on Monday, with prices down as much as 6% at the open, after President Donald Trump said he had called off planned strikes on Iran’s infrastructure and suggested an agreement to reopen the Strait of Hormuz may be close. The decline reflected investor expectations that easing tensions between Washington and Tehran could reduce the risk of ongoing disruption to global crude supplies through the strait. Speaking to reporters aboard Air Force One shortly before US markets opened on Globex Sunday evening, Trump claimed a Hormuz deal had been reached and said denuclearisation talks with Iran would begin the following afternoon. That claim, however, remains unconfirmed and follows a pattern of disputed statements from Trump on Iran; his earlier assertion that Tehran had requested a pause in strikes was flatly denied by Iran’s Mehr news agency, which called it “a new lie.”
The gap between Trump’s diplomatic framing and conditions on the ground was underscored by reports of Iran firing a cruise missile at an oil tanker transiting the protected southern Hormuz route, alongside separate UK Navy reports of vessels under attack in the strait and surrounding waters. US equity markets showed a far more muted response to the overall narrative than oil, with ES and NQ futures opening only around 0.5% higher, suggesting equities are treating the de-escalation claims with greater scepticism than the crude market.
On currencies, US Treasury Secretary Scott Bessent and Japan’s Ministry of Finance officially confirmed Friday’s coordinated yen-buying intervention, removing the ambiguity that had surrounded the suspected action and pledging readiness for further joint moves if needed. “We will not hesitate to participate in further joint intervention,” Bessent said. Japan’s top currency official, Atsushi Mimura, reinforced the message, framing the intervention as the culmination of the US-Japan currency alliance and raising the prospect of further coordination with the Bank of Japan to support the currency. The yen extended its rally through the session, with USD/JPY posting a sharp plunge below 156. Widely circulated market chatter, though unconfirmed, pointed to a wall of importer dollar-buying bids resting around the 155 level, a level that may act as near-term support should the yen’s advance continue.
The stronger yen weighed heavily on Japan’s Nikkei, which fell sharply as export-oriented stocks were sold on concerns over deteriorating overseas profitability, while South Korea’s KOSPI also dropped as Samsung and SK Hynix extended losses on lingering doubts about AI-related chip demand, despite both companies reporting strong earnings last week.
In data, China’s manufacturing sector expanded at its slowest pace in four months in July, with the RatingDog China General Manufacturing PMI, compiled by S&P Global, falling to 50.9 from June’s 51.7 and missing the forecast of 51.5. Output and new order growth both slowed, though export orders returned to growth after a prior contraction, leaving the headline reading still above the 50-mark that separates expansion from contraction.
This article was written by Eamonn Sheridan at investinglive.com.
