Market Summary
Oil Extends Rally as Hormuz Tensions Persist: Crude oil climbed 1.75% yesterday to $89.37 as traders remained wary about the prospects for a Middle East deal. Brent crude has risen a further 0.91% this morning to $89.72 a barrel, extending its winning streak to six consecutive days—the longest since April. The advance comes as the U.S. and Iran appear to be hardening their positions in the long-deadlocked negotiations over the Strait of Hormuz, despite Pakistan's defence minister saying the two sides are "close to some sort of arrangement." The sustained rise in oil prices continues to reinforce concerns over inflation, with markets now turning to today's U.S. CPI data for clues on the future path of interest rates. Economists expect core CPI to ease slightly to 2.5% from 2.6%, while markets currently price a 50.1% probability of a Federal Reserve rate hike.
AI Optimism Drives Asian Tech Rally: Technology sentiment strengthened overnight as optimism around AI investment continued to support semiconductor and technology stocks. South Korea's KOSPI, a key bellwether for AI-related investment, rallied 3.90%, while Samsung Electronics and SK Hynix both jumped around 7% amid optimism over their shareholder-return policies. In the U.S., CoreWeave surged 16% in extended trading after stronger-than-expected sales growth, driven by booming AI spending, while Super Micro Computer gained 7.6% after its revenue forecast topped estimates. The gains helped lift Nasdaq 100 futures 0.31% this morning.
Gold Rebounds as Markets Await CPI: XAU/USD has risen 0.4% this morning to around $4,387 an ounce following yesterday's modest decline. The metal remains supported by expectations around the future path of U.S. monetary policy and ongoing geopolitical uncertainty. Today's U.S. CPI report will be closely watched for any signs that inflationary pressures are easing or proving more persistent than expected, potentially influencing expectations for Federal Reserve policy.
Yen Holds Near 160 as Intervention Risk Builds: The Japanese yen was little changed this morning at around 159.40 per dollar, remaining close to the key 160 level that could prompt renewed intervention from Japanese authorities. Investors continue to monitor the currency closely for signs of further official support. Meanwhile, U.S. Treasuries steadied, with the benchmark 10-year yield little changed at 4.69% as markets await today's inflation data.
Economic Calendar
- U.S. CPI Data
- U.S. MBA Mortgage Applications
- German CPI
- India CPI
Key Market Moves Today
- S&P 500 Futures: +0.13% (7,757.0)
- U.S. 10-Year Yield: +0.01 bps (4.69%)
- Brent Crude: +0.91% ($89.72)
- Bitcoin: +0.06% ($63,734)
- Spot Gold: +0.4% ($4,387)
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