Asian Equities Mixed; US Futures Edge Up; Geopolitical Tensions Persist

Lead Asian equities closed mixed today, with the Nikkei 225 down 0.66% while the NZX 50 gained 0.4%. US stock futures are slightly higher, though geopolitical tensions in the Middle East and concerns over the Strait of Hormuz continue to influence sentiment. Crude oil is set for a second consecutive weekly rise. Session narrative Asian markets displayed a mixed performance today. The Nikkei 225 Index declined by 0.66%, with technology and industrial sectors leading the losses. Conversely, the NZX 50 finished higher, advancing 0.4%, marking its third consecutive weekly gain. US stock futures are showing modest increases, with S&P 500 futures up 0.09% and Nasdaq futures up 0.24%, as investors assess ongoing geopolitical risks alongside domestic inflation and financial conditions. The VIX, a key measure of market volatility, saw a notable increase of 7.52%. In economic data, Japan's Overall Nationwide CPI confirmed higher inflation at 2.0%, exceeding the 1.9% forecast. India's HSBC August composite flash PMI printed at 54.6, above the 54.3 forecast, while its services flash PMI was 54.5, topping the 53.7 forecast. The UK's PSNB excluding banks came in at 1.800 billion, significantly down from the prior 15.989 billion. South Korea's PPI fell 0.4% month over month. The Indonesian rupiah strengthened against the US dollar, aiming for its third straight weekly advance as the dollar index remained near multi-month lows. Cross-asset check In the commodities market, crude oil is poised for its second straight weekly gain, trading above $86 per barrel, fueled by persistent US-Iran tensions and risks surrounding the Strait of Hormuz. Gold is up 0.89% and silver surged 1.38%. Copper also saw a gain of 1.24%. European natural gas prices, while dipping below €65 per MWh, remained near multi-year highs, up more than 5% for the week, also influenced by Strait of Hormuz tensions. Bitcoin touched $74,000 following a White House crypto summit. In the rates market, the US 10-year yield increased by 0.92%, while long-duration Treasuries (TLT) were down 0.92%. The US Dollar Index (DXY) is down 0.16%, with the Japanese yen steadying near 159 per dollar after inflation data. The British pound gained 0.10% against the dollar. The equity market saw NVIDIA agree to pay $6 billion to license AI models from Poolside and invest an additional $1 billion. BMO rated Micron and NVIDIA as Outperform, setting price targets of $1,300 and $340 respectively, citing a memory supercycle and AI leadership. Walmart, Ross Stores, and Advance Auto Parts reported mixed quarterly results. Ross Stores raised its 2026 outlook after a strong Q2. The geopolitical landscape remains a key focus, with South Korea urging North Korea to halt slander and cooperate for peace. Trump commented on Iran's missile capabilities and claimed US control over the Strait of Hormuz. Reports also indicated Trump is increasingly lashing out at allies as victory in the Iran war proves elusive. The UK GfK consumer confidence major purchases gauge hit its highest level since December 2021. The overall market sentiment is influenced by a combination of geopolitical concerns, inflation data, and corporate earnings, leading to a cautious but slightly positive tone in US futures. Themes & continuing stories Geopolitical tensions in the Middle East, particularly concerning the Strait of Hormuz and US-Iran relations, continue to be a dominant theme, impacting crude oil prices and broader market sentiment. Inflation concerns are also prominent, with Japan's CPI confirming higher inflation and European gas prices remaining elevated. The mixed economic data from various regions, including India's strong PMI and South Korea's falling PPI, adds to the complex market picture. What’s ahead The economic calendar for Friday, August 21, includes scheduled Fed speak. Traders will be monitoring these events for further insights into monetary policy and economic outlook.