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Stock market indices in South Korea and Japan are seeing sharp falls.
US stock markets are not doing much, with the major action of recent hours unsurprisingly located in Asian markets, with the South Korean KOSPI down by over 6% on the day, continuing its steady trend lower since mid-June. This is based on increasing weakness in AI and semiconductor tech sectors. You can see this reflected in the US S&P 500 Index which is performing better and has healthier-looking price action than what we see in the NASDAQ 100 Index.
The USA / Iran confrontation has continued to produce kinetic conflict, with the USA bombing Iran for another night after Iran fired on ships in the Strait of Hormuz and on several Gulf nations. Trump is threatening to start targeting infrastructure next week in an attempt to drive Iran to the negotiating tabIe. I have been writing here for a while that the US administration's pursuit of a "good deal" with the regime in Iran will never yield fruit and is incompetence and wishful thinking taken to an infinite level. Unfortunately, I am being proven right. The Strait of Hormuz is effectively 99% closed, with just a tiny trickly of crude oil shipping getting through, or any shipping for that matter. However, spot WTI Crude Oil seems to be stabilising near $80 - President Trump will be very happy about that. Yet there is surely risk remaining to the upside.
It has been a broadly quiet Asian session in the Forex market, but there has been an exciting bullish breakout in the GBP/USD currency pair which traders might want to take a look at. The USD/JPY currency pair is looking a little stronger but is still basically consolidating within an area of high volatility not far from its multi-decade high price. The US Dollar is weak, but the Japanese Yen is even weaker, so we are also seeing some strong directional price action in many Yen crosses, notably GBP/JPY and NZD/JPY which have seen big increases this week so far.
Precious metals such as Silver and Gold are showing bearish price action, with both well-established within strong bearish trends and near multi-month lows. Gold, notably, is still being held by a long-term descending trend line which currently sits at about $4,200. I do not short commodities, but if I did, I would be short of these two precious metals, especially Silver which looks to be leading the way lower.
Bitcoin has risen to reach a new 3-week high where it has tested the key resistance at $65,233. So far, it has not succeeded to break out beyond that level. If it does later today, that will be a bullish sign for Bitcoin. It is currently coiling below that level, so a breakout is looking increasingly likely.
US PPI data also came in below expectations yesterday, just like CPI. This is giving more data fuel to support a more dovish tilt by the Fed and consequently a weaker US Dollar, as it indicates a slowing US economy.
Fed Chair Warsh testified before the US Congress yesterday, maintaining his generally hawkish stance on inflation in his remarks.
The Bank of Canada left rates unchanged at its policy meeting yesterday. There were no surprises of any kind.
UK GDP data just came in a fraction higher than expected, showing a month-on-month increase of 0.1% when no change was seen as the likely result. This might give a tiny boost to an already strong British Pound.
SpaceX shares have fallen below their IPO value for the first time after only a few weeks. This is a bad omen for valuations of big tech shares in general and for SpaceX in particular.