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The latest development is that Iran has rejected a ceasefire proposal from Iraq, believed to be passed on from US president Trump. The main excuse that Iran is going with this time is that the proposal fails to address the question of control over the Strait of Hormuz. Dum, dum, dum.

Iran said that they were not going to accept a "temporary deal". And so, that leaves both sides with little to nothing to work with ahead of the weekend.

Now, we've seen this sort of dance before between the US and Iran. It was the same kind of back and forth we had back in May before both sides agreed to a ceasefire deal in June. So, it's not to say that these words are binding and that both sides will be uncompromising on their positions.

But as mentioned…

The collapse of this mediation attempt removes one of the few visible diplomatic channels still operating between Washington and Tehran, reinforcing the view that a near term negotiated de-escalation is unlikely. Iran's explicit warning that it would expand the conflict to Tel Aviv and push its Houthi allies to close Bab al-Mandeb if Trump strikes Tehran directly raises the stakes around an already fragile Red Sea shipping corridor, adding to the existing Hormuz disruption. For oil markets already pricing significant supply risk, confirmation that both sides see the conflict escalating rather than de-escalating argues for the current risk premium to persist, with headline risk skewed toward further chokepoint disruption rather than…

• ICYMI - Iran rejects Trump ceasefire offer carried by Iraqi PM, NYT reports
• Gold extends slide below $4,040 support to test $4,025 as yields bite
• Asian shares slump as AI spending fears and oil spike hit sentiment, rates
• Preview - BOJ to hold next week, keep inflation overshoot warning. but see risks easing
• Trump losing patience with Iran war, in revenge mode, WSJ reports
• Singapore - MAS seen holding policy steady on July 27 as inflation stays mild, Reuters poll shows
• Japan finmin Katayama signals readiness for decisive forex action on yen
• PBOC sets USD/ CNY reference rate for today at 6.7939 (vs. estimate at 6.7795)
• Japan warns of faster cost pass-through inflation while BOJ expected to hold rates next week
• Japan composite PMI rises to 53.1 as…

ADDED: 

South Korea's financial regulator said it is moving up the start date for a higher deposit requirement on retail trading of single stock leveraged ETFs to July 31, aiming to address market volatility. The Financial Services Commission said retail investors will need to hold a cash deposit of around 30 million won, roughly $20,000, to trade these products, bringing forward a rule that had been planned for sometime in August. The move is intended to curb speculative retail trading. The approval of domestic single stock leveraged ETFs tied to Samsung Electronics and SK Hynix in late May has drawn criticism for contributing to heightened market volatility.

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The selloff reflects two distinct but reinforcing forces: a reassessment of AI…

Gold's break below the $4,040 line points to renewed downside momentum rather than a stabilising range, with the move extending to around $4,025 in Asia trading. The decline continues to reflect the same dynamic seen through this conflict, where rising oil driven inflation expectations and firmer rate bets are outweighing the usual safe haven pull of an escalating war. With the metal now trading below a level that had provided initial support, attention shifts to whether $4,000 holds as the next line of defence, or whether the rates and dollar backdrop continues to dominate price action regardless of further geopolitical escalation.

Gold's break below $4,040 confirms the rates story is still driving this market, not the war.

Summary:

• Spot…

A more sanguine BOJ tone, even alongside a repeated 2% overshoot warning, points to continuity rather than a hawkish surprise at next week's meeting, with rates expected to hold at 1%. The shift in focus toward how much of the cost increase firms pass on to households, rather than the immediate oil shock itself, suggests the central bank sees the acute geopolitical risk as somewhat contained for now, even as analysts still expect a hike to 1.25% between October and December. For the yen, already under pressure and near 40 year lows, any signal on financial conditions and currency depreciation in the report is likely to matter more to markets than the precise inflation target timeframe, which some analysts say is losing relevance as…

The reporting reinforces the view that this conflict lacks a near term diplomatic exit, with Trump described as skeptical of negotiations and inclined toward continued military pressure rather than a deal. That posture, combined with the US surging additional forces and weaponry into the region, points to sustained rather than easing geopolitical risk, keeping the oil market's supply disruption premium underpinned. The added detail that Trump threatened major military punishment against Iran over the Houthi attacks on Saudi tankers suggests further escalation risk around the Red Sea and Hormuz chokepoints remains live, arguing against pricing in a swift de-escalation.

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Earlier:

• Complacency fades as analysts warn oil crisis now graver than…

The Reuters poll points to a majority expectation of an unchanged SGD NEER stance, with core inflation still running below the top of the official 1.5 to 2.5 percent band for 2026. The split view matters for the Singapore dollar: a hold would be seen as consistent with current pricing, while a surprise tightening, as a minority of analysts expect, could see a modestly steeper SGD NEER slope and support for the currency. The stronger than forecast 5.7 percent second quarter GDP print adds a genuine tightening argument, but with energy cost pass-through described as milder than expected so far, the bar for an upward re-centring of the band looks to require a more severe and sustained oil shock rather than the current level of Middle East…

The white paper adds a fiscal side voice to a picture already building in this week's data: June core CPI at 1.6% and firms passing on costs faster than during the 2022 Ukraine driven energy shock, alongside flash PMI figures showing services charge inflation at its fastest pace in over 12 years. Together they support the Bank of Japan's view that price pressures are becoming embedded rather than transitory, even as the core-core CPI gauge eased to its softest pace since August 2022. With Economy Minister Kiuchi seen as cautious on further tightening, the report's language may complicate rather than clarify the BOJ's messaging at next week's meeting, where policymakers are widely expected to hold rates steady while acknowledging the…

Katayama's comments come directly on the heels of the US Treasury's semi-annual currency report, which called excessive yen volatility undesirable and pressed the Bank of Japan to keep normalising policy. By explicitly citing the joint US-Japan statement in that report, Katayama is aligning Tokyo's rhetoric with Washington's language rather than pushing back against it, while still reserving the option to intervene unilaterally. The readiness to take decisive action, paired with confirmation of round the clock communication with the US, keeps intervention risk live for anyone positioned short yen into a 40 year low, even though Katayama declined to name specific levels that would trigger action.

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Japan's finance minister is leaning on…

The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate. More here on this.

• prior close 6.7777

The data itself points to a private sector gathering pace, with manufacturing output growth the strongest in over a decade even as services momentum cooled slightly.

That contrasts sharply with the tone in regional equities on the day, where Japan's Nikkei is down around 2% and South Korea's Kospi off roughly 3%, moves that owe far more to the oil driven risk off tone from the Middle East than to the domestic data.

Sustained input cost pressure tied to the conflict, alongside a marked pickup in services charge inflation, keeps the inflation debate live for the Bank of Japan even as growth indicators firm, a combination that complicates the policy picture heading into next week's meeting.

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Earlier:

• Japan core CPI rises 1.6% in June,…