Asia Mixed; Geopolitical Tensions Persist, Norway CPI Higher

Lead Asian equities closed mixed today as geopolitical concerns in the Middle East continued to influence sentiment. WTI crude oil saw a slight decline of 0.13%, while gold futures gained 0.09%. Norway's July CPI came in higher than expected at 3.0% year-over-year, exceeding the estimated 2.8%. Silver futures surged 1.23%, and natural gas futures rose 3.27%. S&P 500 futures were up 0.15%, and Nasdaq futures advanced 0.41%. Session narrative Asian markets displayed a mixed performance today, with some indices moving higher and others lower. Geopolitical developments in the Middle East remained a significant factor, with reports of a major Ukrainian drone attack in Russia and continued Houthi activity in Yemen. The monitoring of the Strait of Hormuz situation continued to be a focus, affecting energy market sentiment. Economic data from Japan indicated a wider-than-expected trade deficit. The Bank of Japan's July meeting summary provided insights into members' views, with one member highlighting concerns about potential upside inflation risks and the impact of a weaker yen. In Europe, Norway's July CPI surprised to the upside, coming in at 3.0% year-over-year, above the 2.8% estimate. On the corporate front, JPMorgan raised its S&P 500 2026 target, and investor Michael Burry offered criticism of Berkshire Hathaway's new CEO, Greg Abel, regarding his investment approach. The US Dollar Index saw a slight gain of 0.15%, while the US 10-year yield edged down 0.21%. USD/JPY increased by 0.42%. Cross-asset check Equity futures showed modest gains, with S&P futures up 0.15% and Nasdaq futures up 0.41%. Dow futures were slightly down 0.04%. In fixed income, the US 10-year yield decreased by 0.21%. Currencies saw the US Dollar Index rise 0.15%, while USD/JPY gained 0.42%. EUR/USD was down 0.03%. Commodities presented a mixed picture: WTI crude was down 0.13%, Brent crude was down 0.01%, gold was up 0.09%, silver surged 1.23%, and natural gas jumped 3.27%. Copper also saw a gain of 0.47%. Themes & continuing stories Geopolitical tensions in the Middle East remain a dominant theme, impacting energy markets and broader sentiment. The ongoing situation in the Strait of Hormuz and regional conflicts continue to be closely watched. Inflationary pressures are also a key focus, as evidenced by Norway's higher CPI and the Bank of Japan's discussions on upside inflation risks. Central bank policy, particularly the BoJ's stance and potential future adjustments, is another significant continuing story. The broader economic outlook, including global growth and trade dynamics, continues to influence market participants. What’s ahead The upcoming week will feature significant macroeconomic data, with the US CPI report in focus. Additionally, market participants will be monitoring developments regarding a potential deal between Iran and Oman, which could have implications for energy markets and geopolitical stability.