Macro update
Asian equities slide amid AI profit-taking and geopolitical concerns: MSCI’s Asia-Pacific index excluding Japan fell 1.8%, while South Korea’s Kospi tumbled as much as 7% and Japan’s Nikkei declined 1.6%, as investors reduced exposure to technology stocks following disappointing results from Broadcom and adopted a more cautious stance amid a lack of progress in US-Iran negotiations.
Nikkei pulls back from record levels: Japan’s benchmark retreated 1.6% after reaching a fresh all-time high, with technology-related shares leading the declines. Broader market strength helped limit losses, however, as real wages continued to rise, marking a fourth consecutive month of growth.
Oil remains supported as supply risks intensify: Brent crude climbed to $94 per barrel and remained on track for solid weekly gains, while WTI looked set for an even stronger advance. Prices were supported by fading hopes of a Lebanon ceasefire after Hezbollah rejected a US-backed proposal, while an explosion at Oman’s Mina al Fahal terminal heightened concerns over potential supply disruptions.
Iranian oil exports fall to multi-year lows: Shipping data indicated that Iranian crude exports have dropped to their weakest level since 2020 as ongoing disruption around the Straits of Hormuz and the US naval blockade continue to weigh on export flows.
Yen remains under pressure near key levels: The Japanese currency briefly touched ¥160 per dollar for a third consecutive session despite renewed warnings from Finance Minister Satsuki Katayama, who reiterated that authorities stand ready to respond to excessive market volatility. The yen is currently heading for a fourth straight weekly decline.
Focus turns to US payrolls as dollar and bitcoin diverge: The dollar index remains on course for a weekly gain, supported by safe-haven demand ahead of the latest US jobs report. In contrast, bitcoin extended its recent weakness, falling 1.4% and heading for its steepest weekly decline since the collapse of FTX in late 2022.
