China June trade data smashes forecasts on AI demand surgeNZD firms as Conway reinforces RBNZ hawkish tilt on inflation riskChina’s export growth accelerated in June, surged 27% y/y vs. 18.2% expectedPreview – Falling gas prices seen pulling US June CPI lower, but Fed unlikely to relaxGold falls to two week low as oil surge stokes Fed hike betsAustralian business mood improves in June, but survey misses new oil spikeICYMI – European Union imposes gold sanctions / banAustralia Business Confidence June 2026: -5 (vs. prior -14)PBOC sets USD/ CNY central rate at 6.7990 (vs. estimate at 6.7927)Japan finance minister comments giving the yen a wee boostRBA rate hikes still weighing even as confidence ticks higherBank of Korea seen hiking to 2.75% this week, on Thursday, more to come by year endRecap – RBNZ warns oil driven inflation could become persistent, more hikes eyedSingapore economy cools from Q1 pace as MAS policy call nearsYen Katayama bounce fully unwinds as GPIF shift doubts emergeUK consumers spend on heat and football even as risks buildICYMI – Iranian missiles hit two UAE tankers in Hormuz, killing one crew memberRBNZ Chief Economist Conway, more: “Will get inflation back to 2%”Tanker hit by projectile off Oman coast hours before Hormuz blockadeRBNZ signals further tightening as conflict lifts inflation riskNZ QSBO business confidence rebounds but rising cost pressures cloud RBNZ pathICYMI – UAE plans new Fujairah port to bypass Strait of Hormuz, FT reportsUS military says it has begun a third consecutive night of strikes against IranRecap – Crude surges as Saudi Arabia comes under attack and Iran blockade returnsNASDAQ index leads the stocks to the downside
Summary:
Oil extended gains after Monday’s 9% plus surge, with the US military carrying out a third consecutive night of strikes on Iran and the naval blockade of Iranian shipping now in forceGold briefly slipped under 4,000 dollars as the inflation and rate hike implications of the oil spike outweighed any safe haven bidThe New Zealand dollar moved higher on RBNZ chief economist Conway’s comments reinforcing the case for further tightening if Middle East linked inflation proves persistentThe yen rallied briefly after Japan’s Finance Minister Katayama reopened the door to a possible GPIF allocation shift, without committing to anything concreteChina’s June trade data smashed forecasts, with exports growing at their fastest pace since 2021 and imports at a five year highSouth Korean shares fell again, triggering a five minute sidecar halt in program trading after the KOSDAQ dropped 5%
Oil extended its gains on Tuesday after Monday’s rally of more than 9%, as the US military carried out a third consecutive night of strikes against Iran and the reinstated naval blockade of Iranian shipping took hold. The escalation has now touched multiple fronts within a single session, from direct attacks on Saudi soil to a fatal Iranian missile strike on two UAE tankers in the southern Strait of Hormuz, and Trump’s warning of a possible strike on a hardened nuclear facility near Natanz has added a further layer of risk rather than any sign of de-escalation. That combination has left the market pricing a conflict showing no obvious path toward containment, and it is the backdrop against which nearly every other story in today’s session needs to be read. Gold, typically a beneficiary of exactly this kind of geopolitical stress, instead briefly slipped under 4,000 dollars, a reminder that the inflation and Fed rate hike implications of higher oil are currently outweighing any safe haven demand for the metal.
The New Zealand dollar was a standout mover, helped by RBNZ chief economist Conway reinforcing the central bank’s hawkish framing. Conway confirmed last week’s 25 basis point hike to 2.5%, described it as a calibrated drift back toward neutral rather than a shift to restrictive policy, and explicitly said the RBNZ will respond further if Middle East linked inflation pressures prove more persistent than expected, a fairly direct piece of forward guidance that gave the currency a clean fundamental tailwind.
The yen also found some support after Japan’s Finance Minister Katayama said a change to GPIF’s asset allocation could be examined if the investment environment shifts sharply, days after a report suggested no immediate change was planned. The remarks gave markets a reason to keep pricing some probability of repatriation without offering anything concrete enough to reignite last week’s scale of buying, and comments on wanting to enhance the appeal of Japanese government bonds suggest Tokyo is keen to keep the broader asset attractiveness story alive on multiple fronts rather than resting on the GPIF question alone. The yen’s rally proved brief, consistent with a market now treating this kind of comment with more caution after last week’s round trip.
China provided the session’s clearest upside surprise, with June trade data beating forecasts comprehensively. Exports rose 27% year on year, the fastest pace since 2021, while imports jumped 36% to a five year high, both far ahead of consensus as AI related demand and a rush of shipments ahead of possible US tariffs supported activity. The data raises the stakes for Wednesday’s second quarter GDP release.
South Korean equities were the session’s weak spot, falling again and forcing the Korea Exchange to activate its sidecar mechanism, halting program trading for five minutes after the KOSDAQ dropped 5%, a further sign of how unsettled regional risk appetite has become as the conflict grinds on.
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Still to come Tuesday are June CPI data from the US. There’s a preview linked in the bullets above and here is an earlier one from Goldman Sachs.
This table of forecasts is via the Wall Street Journal:
This article was written by fl6553e4b45d84486a91658a8b3f02bf22 at investinglive.com.