Asian Markets Mixed Amid Geopolitical Tensions; Oil Gains, Gold Rises

Lead Asian markets displayed a mixed performance today, with geopolitical tensions and central bank commentary influencing investor sentiment. Crude oil prices advanced, while gold and silver continued their upward trajectory. Economic data from South Korea revealed the largest year-on-year increase in core CPI since December 2023. Session narrative Asian equities experienced a mixed trading session as ongoing geopolitical developments remained a primary concern. Reports indicated that Russia struck cargo vessels in Ukraine and faced drone attacks within its own territory. Concurrently, Japan imposed dumping duties on steel products, contributing to broader trade tensions. In the commodity markets, crude oil prices saw gains, with Brent crude rising 1.38% and WTI crude up 0.78%. Precious metals also continued their ascent, as silver climbed 2.29% and gold increased by 0.68%. Economically, South Korea's July core CPI registered a 2.6% year-on-year increase, marking its highest rise since December 2023. Japan's economy minister commented on moderate year-on-year price increases and emphasized the Bank of Japan's coordination with the government on policy guidance, attributing recent rises in long-term interest rates to changes in Japan's fundamentals, including rising underlying inflation. The US Dollar Index posted a modest gain of 0.12%. Cross-asset check Equity futures showed modest gains with S&P futures up 0.25% and Nasdaq futures up 0.66%. The US 10-year yield decreased by 1.24%. In currencies, USD/JPY rose 0.31%, while EUR/USD saw a slight decline of 0.03%. Brent crude was up 1.38% at 84.93, and WTI crude gained 0.78% to 80.97. Gold futures increased by 0.68% to 4118.5, and silver futures surged 2.29% to 59.18. Themes & continuing stories Geopolitical tensions remain a dominant theme, with ongoing conflicts in Eastern Europe and new trade disputes impacting market sentiment. Inflation concerns are highlighted by South Korea's CPI data, and central bank actions, particularly from the BoJ, are under scrutiny as policymakers address rising long-term interest rates. The performance of commodities, especially oil and precious metals, continues to reflect global uncertainties and supply dynamics. What’s ahead Market participants will continue to monitor geopolitical developments and any further central bank communications. Upcoming economic data releases and corporate earnings will also be key factors influencing market direction.