Macro update
Oil prices jump after Iran closes the Strait of Hormuz: Brent crude surged 4.1% to $79.11 a barrel after US and Iranian forces exchanged missile and drone attacks over the weekend, with Tehran targeting US military facilities across the Gulf and once again shutting the strategically important shipping route.
Dollar strengthens as markets price in further Fed tightening: The US dollar advanced against most major currencies as renewed concerns over energy-driven inflation increased expectations of additional central bank tightening, with fed funds futures now implying a 50.9% probability of two or more Federal Reserve rate hikes by December, up from 47.6% on Friday.
South Korean semiconductor stocks come under pressure: The KOSPI fell 7.6% as investors unwound leveraged positions in chipmakers, while SK Hynix dropped as much as 8.2% in Seoul following profit-taking after its shares rallied 12.8% during their Nasdaq debut on Friday.
Nikkei declines as higher oil prices weigh on sentiment: Japan’s benchmark index fell 1.12% to 67,786.86 as rising energy costs clouded the corporate outlook at the start of the earnings season, with Kioxia sliding 8.92% and Yaskawa Electric falling 14.34% after reporting a 21.7% drop in first-quarter net profit.
Corporate earnings season gets underway: Major US banks, including JPMorgan Chase and Goldman Sachs, are due to report from Tuesday, with S&P 500 second-quarter earnings expected to increase 23.7% year-on-year, while Taiwan Semiconductor Manufacturing is scheduled to release results on Thursday.
Gold retreats as Treasury yields move higher: Spot gold fell 1.5% to around $4,060 an ounce as the surge in oil prices pushed two-year US Treasury yields to their highest level since early 2025, ahead of Tuesday’s US inflation report and Federal Reserve Chair Kevin Warsh’s testimony before Congress.
