Markets July 13: South Korean Kospi Crashes 9%, Brent Soars to $79.5 Amid Strikes on Iran and Gold Falls Below $4100
Global markets began the week under pressure following a sharp escalation in the Middle East situation. Investors are reducing risky positions amid U.S. strikes on Iran, threats of oil supply disruptions through the Strait of Hormuz, and
Global markets began the week under pressure following a sharp escalation in the Middle East situation. Investors are reducing risky positions amid U.S. strikes on Iran, threats of oil supply disruptions through the Strait of Hormuz, and ongoing expectations of further tightening of monetary policy by the Fed.
U.S. Futures in the Red Zone, Europe Reacts to Energy Crisis
USA: Trading on the U.S. futures market started in negative territory. The Nasdaq 100 futures lost 1.3% due to concerns about overheating in the artificial intelligence sector and risks of deteriorating financial performance of IT giants. S&P 500 Futures (-0.4%) and Dow Jones Futures (-0.3%) are also correcting.
Europe: European markets opened the week with moderate declines. Negative dynamics are observed in the CAC 40 and STOXX Europe 600 indices, while the German DAX remains under significant pressure. Investors are pricing in the inevitable rise in costs due to the increase in energy resource prices.
Dramatic Drop in Asia: South Korean Kospi Plummets 9%
Asian markets closed the session with massive sell-offs. The main epicenter of panic was South Korea, where the Kospi index collapsed by 9.0% amid profit-taking in semiconductor stocks. The Japanese Nikkei 225 and Chinese CSI 300 also suffered significant losses.
Strengthening of the DXY Dollar and Rising Yields on US Treasuries
Bond Market: The yield on 10-year U.S. government bonds has stabilized at an elevated level of around 4.58%. The market estimates the probability of another rate hike by the Fed at the September meeting at about 60%, fearing a prolonged plateau of high rates.
Currency Market: A flight from risk has triggered a new wave of growth in the dollar index (DXY) against a basket of major currencies. The USD/JPY pair has settled around the 162 mark, while the British pound (GBP/USD) is holding at 1.338.
Brent Oil Approaches $80, Gold Under Pressure from Rates
Energy and Metals: The price of Brent crude has surged to the range of $78.9–79.5 per barrel due to shipping risks in the Strait of Hormuz. WTI is trading around $74.2. In contrast, gold has fallen by 1.4% (below $4100 per ounce): investors fear that expensive oil will trigger a surge in inflation and force central banks to maintain high rates.
Cryptocurrencies: Digital assets are showing unexpected resilience. Bitcoin is holding above $63,000 thanks to a continuous influx of capital into spot ETFs and a softening regulatory backdrop in the U.S.
Key Events of the Week (Astana Time, GMT+5):
| Date | Event / Publication |
|---|---|
| July 14 |
U.S. Consumer Price Index (CPI) Start of the earnings season for major U.S. banks: quarterly releases from JPMorgan Chase, Goldman Sachs, and Citigroup. |
| July 15 |
Block of macro statistics from China for Q2: GDP, industrial production, retail sales. Decision by the Bank of Canada on interest rates. |
Main Risks of the Trading Week:
| — | Direct military confrontation and escalation between the U.S. and Iran. |
| — | Disruptions or complete blockage of logistics routes through the Strait of Hormuz. |
| — | A new wave of global inflation due to rising energy prices. |
| — | Increased hawkish rhetoric and tough measures from the Fed. |
| — | Slowing growth rates of the largest economy in Asia — China. |
| — | Deep correction of AI industry stocks after a turbulent half-year rally. |
Conclusion: The start of the week is marked by a decrease in risk appetite. Rising oil prices, geopolitical tensions, and expectations of further tightening by the Fed are putting strong pressure on equity markets. Investors will focus this week on key inflation data from the U.S. and the first reports from major American banks, which will set the overall tone for the coming weeks.