SINGAPORE: Asian markets swung between gains and losses Tuesday as Brent crude hit a one-month high after President Donald Trump threatened a 20% fee on Strait of Hormuz cargo.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4%. Korean shares led regional gains, rising 2.2%.
Japan’s Nikkei 225 added 0.2%, while S&P 500 e-mini futures slipped 0.1%. Brent crude futures climbed 2.6% to USD 85.50 a barrel, their highest level since mid-June.
The gains followed Trump’s statement that the US was reinstating a blockade of Iranian shipping in the Gulf. He also said Washington would collect a 20% fee on cargo crossing the Strait of Hormuz. Markets also reacted to comments from Federal Reserve Governor Christopher Waller.
Waller said the US central bank may need to raise interest rates “in the near term” if inflation stays above the 2% target.
Read: Oil Prices Rise to Four-Week High on US-Iran Blockade
Chris Weston, head of research at Pepperstone Group Ltd in Melbourne, said markets reacted aggressively to the latest headlines on the Iran conflict.
He said a tighter monetary policy during a possible energy shock was rarely supportive for risk assets. Wall Street sold off overnight, with the S&P 500 falling 0.8% and the Nasdaq Composite dropping 1.6%.
Fed funds futures priced a 43.3% chance of a 25 basis point hike at the July 28-29 meeting, up from 34.2% on Friday, according to CME Group’s FedWatch tool.
The US 10-year Treasury yield rose 2.2 basis points to 4.6297%. The US dollar index held at 101.29, while gold slipped 0.1% to USD 3,997.27.
Asian markets swing as Hormuz levy lifts oil
| Asset / Market Indicator | Current Metric / Price | Intraday Performance | Core Geopolitical & Macro Catalyst |
|---|---|---|---|
| Global Benchmark ↳ Brent Crude Oil | $85.50 / bbl | ▲ +2.60% | Hits a 1-month high following Donald Trump’s 20% cargo fee threat. |
| Refined Energy ↳ RBOB Gasoline | $3.0900 / gal | ▲ +3.47% | Refiner inventory depletion as logistics pivot toward military needs. |
| Refined Energy ↳ Heating Oil / ULSD | $3.8647 / gal | ▲ +3.00% | Reaches a 7-week high, compounded by Russian diesel export cuts. |
| Regional Equities ↳ MSCI Asia-Pacific | Index Value | ▲ +0.40% | Choppy, swing session; traders weigh energy shock risks. |
| Regional Equities ↳ KOSPI Index (South Korea) | Index Value | ▲ +2.20% | Leads regional gains despite wild intraday swings in chip equities. |
| Regional Equities ↳ Nikkei 225 (Japan) | Index Value | ▲ +0.20% | Minor gains capping a highly volatile morning opening session. |
| US Stock Futures ↳ S&P 500 E-minis | Futures Contract | ▼ -0.10% | Edging lower following a 0.8% drop on Wall Street overnight. |
| Fixed Income ↳ US 10-Year Treasury | 4.6297% Yield | ▲ +2.2 bps | Yields climb on hawkish comments from Fed Governor Waller. |
| Global Currencies ↳ US Dollar Index (DXY) | 101.29 | ▬ Flat / Strong | Holding firm at monthly highs as safe-haven demand spikes. |
| Precious Metals ↳ Gold (Spot) | $3,997.27 / oz | ▼ -0.10% | Consolidating just under major milestones as the dollar firms. |
| Monetary Policy ↳ CME FedWatch Tool | 43.3% Probability | ▲ Up from 34.2% | Market boosts wagers for a 25-bps rate hike at the July 28-29 meeting. |
