Market News

• Key question is whether tightening already delivered is enough to slow inflation

• Board ready to raise cash rate further if needed

• Policy operates with a lag, so full effects of this year's rate increases yet to be felt

• Best contribution policy can make is to maintain low, stable inflation

• Some further easing in growth of demand likely to be required to bring inflation down

• Some further easing in labour market will likely be required

• Economy overall has adjusted gradually and broadly as expected

• Policy can't address the economy's slow productivity growth

• Underlying inflation has evolved as expected, but still too high

• Hearing from business that non-labour cost pressures continue to pick up

• Housing market has eased by more than we had…

I wrote about how ugly the Kospi chart was earlier but it's certainly unfolding faster than anticipated. It broke the support of the July lows and the February interim high at the open today and it's been straight down since. It's extended the decline to 10% now.

A double-digit decline is the kind of thing that gets global attention and shifts the pain to the US market. It's definitely the kind of headline that hedge fund managers (and punters) in the US read about and take down risk.

Some notable movers:

• Samsung -10.5%
• SK Hynix -12.6%
• Hyundia -8.2%
• LG -5.1%

This is some 'black Tuesday' level selling and it's not pretty elsewhere in Asia:

• Nikkei 225 -4.4%
• CSI 300 -2.5%

I'm surprised S&P 500 futures are only down 0.2%.

• Don't think public-private investment target of 370 trillion yen is excessive
• Prices have been rising in a healthy manner
• Can't comment on source of funding food tax cut beyond what the PM said yesterday

Between the yen and rising Japanese yields/inflation, something has to give in Japan. There are people writing about 'the biggest bubble in history' and they're not wrong. One of the things that keeps the party going is faith in leadership to not do anything too crazy but the past couple iterations of Japanese leadership haven't exactly inspired my faith in fiscal discipline. Last year was a solid year for growth in Japan but I don't see any way they can grow their way out of the mess they're in.

South Korea's main KOSPI stock index just opened 5% lower. Perhaps more importantly, it also just broke the July lows as the bubble bursts in incredibly quick fashion. It's now down 30% from the June 18 high of 9106.

It's been a brutal drawdown over six weeks following an incredible rally from 2300 to 9106 -- nearly quadrupling since April 2025. That's insane volatility in a market that's notorious for leveraged trading. It was once once of the cheapest markets in the world and remains surprisingly inexpensive on a relative basis. For now though, it's all about momentum and when you combine a downtrend with leverage, it can quickly become an avalanche. 

Technically, I'm watching 5840, which is the 50% retracement of the rally since April…

The FOMC stakes are higher in the Kevin Warsh era.

The new Fed chairman has changed the game in a way that will undoubtedly make markets more lively. The past two Fed chairs did everything they could to foreshadow rate moves in order to tamp down volatility but Warsh is headed in the opposite direction: Maximum uncertainty.

He hasn't been clear on why he is leaving markets so unsettled but the thinking seems to be that he wants each Fed meeting to be live, with policymakers empowered to debate and decide on the fly, once they have all the information. For this week's meeting, that's an especially important quirk because the PCE report is due the day after the Fed decision.

However, officials will certainly get a preview of it before the…

Nucor (NYSE: NUE) just delivered the kind of quarter that validates the entire domestic-steel thesis, and it did it with numbers that weren't close to what the Street was modeling. The after-hours reaction — shares down about 0.2% — tells you the good news was already in the price.

The headline beat

• Adjusted EPS: $4.84 vs. $4.38 expected — a 10.5% beat
• Revenue: $10.40 billion vs. $10.14 billion expected — beat by roughly 2.5% and up 23% y/y
• Reported EPS: $5.04 (includes a $0.20 non-cash benefit tied to a markup in Nucor's Helion fusion-energy stake)
• EBITDA: $2.02 billion, up from $1.51 billion in Q1 and $1.30 billion a year ago
• Free cash flow: $829 million, a swing of more than $1 billion from the -$222 million posted in Q2 2025

Every line moved…

• Prior was 106.6
• 12-month median inflation expectations 2.7% vs 2.8% prior

I guess all the South Korean traders blowing up on SK Hynix haven't hit confidence yet. That's fair enough, given that it peaked on June 25.

RBA Governor Michele Bullock speaks at 1:05 pm Sydney time today and that's the lone highlight on the Asia-Pacific calendar. It's a quiet one but there are no local holidays, just a gap on the calendar.

China will be in focus as we eye the second day of trading in CXMT, which deputed post-IPO with a +450% gain yesterday, making it the most-valuable company in mainland China.

For AUD and NZD, trading on Monday was disappointing as both closed near their worst levels of the day. They had opened strongly on the possibility of peace in the Middle East but that optimism slowly dwindled despite ongoing declines in oil. Brent fell $9.17 to $87.61 in a rout. The problem is that risk trades sagged due to chipmakers and the Nasdaq fell 0.3%, erasing…

• US stocks close the day mixed with the Dow up, S&P unchanged and the Nasdaq modestly lower.
• Crude oil futures settled at $82.61
• US Treasury sells $70B of 5 year notes at a high yield of 4.408%
• Trump: On Iran, I have plenty of time
• Pakistani Intelligence: U.S. May Be Considering Limited Ground Operation in Iran
• US treasury sells $69 billion of 2 year note at a high yield of
• Trump: I am not to give much time to negotiations – either it will move quickly or won't happen at all.
• Heads Up. There will be 2 coupon auctions today ahead of the Fed Decision on Wednesday
• US advanced Durable Goods orders for June 0.3% vs 2.5% expected
• The USD is mostly lower to kickstart the new trading week in North America
• investingLive European session wrap: Oil stumbles as…

The major US stock indices painted a mixed picture with the Dow industrial average and Russell 2000 posting solid gains, while the S&P 500 finished nearly unchanged and the technology-heavy indices closed lower.

• Dow industrial average rose 263.03 points, or 0.51%, to 52,215.23
• S&P 500 edged up 1.20 points, or 0.02%, to 7,413.17
• Russell 2000 gained 18.04 points, or 0.62%, to 2,948.03
• Nasdaq Composite fell 43.74 points, or 0.18%, to 24,932.08
• Nasdaq 100 declined 89.13 points, or 0.32%, to 28,039.21

The closing results showed a clear rotation away from large-cap technology stocks and toward blue-chip and small-cap shares.

Semiconductor and AI-related shares were among the market's biggest losers Monday, with investors locking in gains…

WTI crude oil futures settled at $82.61, down $6.70 (-7.50%) on the day. It was the largest one-day decline since April 17, when prices tumbled 9.86%, as easing geopolitical tensions sparked heavy selling across the energy market.

From a technical perspective, the bearish tone strengthened as the price broke below several key support levels. WTI fell beneath its 100-hour moving average at $87.42, its 200-hour moving average at $84.08, and the 38.2% retracement of the July rally at $83.42. Those breaks shift the near-term bias more firmly in favor of the sellers.

Going forward, the 200-hour moving average at $84.08 is the key level to watch. A move back above that level, especially with sustained momentum, would suggest the selling pressure…

GBPUSD sellers have seized control, pushing the pair below last week's low and to its weakest level since July 2. Last week's low at 1.3299 was an important technical level, aligning with the 61.8% retracement of the rally from the June 23 low to the July high.

Buyers initially tried to defend that support, sparking a modest rebound toward 1.3313, but the recovery quickly stalled. Once the price broke below 1.3299, downside momentum accelerated, sending the pair to a session low of 1.3283.

The next downside target comes in at 1.3261. A break below that level would shift the focus toward the July 1 low near 1.3218, opening the door for a deeper retracement of July's advance.

The pair peaked on July 15, and with four trading days remaining in…