- Australian June CPI 3.8% y/y vs +4.0% expected
- South Korea has just experienced something worse than the dot-com bust
- Oil jumps on a report that Iran launched ballistic missiles towards a US base in Jordan
- US weekly private oil inventories +3.3m vs -1.4m expected
Markets:
- South Korean Kospi down 8.1%
- CHF leads, USD lags
- Nikkei 225 down 4%
- S&P 500 futures down 0.1%
- WTI crude up $3.10 to $82.36
- US 10-year yields up 1.2 bps to 4.62%
It was another crazy day in South Korea. This time the Kospi opened higher only to crumble, currently down more than 8% on a drop in SK Hynix shares following earnings. The commentary wasn’t bad and the company talked about demand extending through 2027 but revenues missed and in this market, only perfect is good enough. I thought we might get a bounce when the finance minister said the government was looking at ways to stabilize equities but that didn’t happen as we’re near session lows as I write.
In terms of news, the big headline was Iran firing 5 ballistic missiles at a US base in Jordan. They were shot down and the US called it a surprise attack. There is some talk that it came after the US attacked ships in Hormuz but — in any case — it raises the stakes once again and boosted oil prices, reversing most of Tuesday’s decline.
In FX, the Aussie is lagging after a softer CPI report. That snuffed out the implied odds of an August hike.
The big focus in the day ahead is the Fed decision, which is highly uncertain. Just after that, we get Meta and Microsoft reporting and if one of them drops out of the AI capex race, then the memory stocks will really have a reason to sell off.
This article was written by Adam Button at investinglive.com.