Key facts
- President Donald Trump threatened a 20% fee on cargo ships passing through the Strait of Hormuz.
- Asian markets showed volatility, with oil prices surging to a one-month high.
- Federal Reserve Governor Christopher Waller signaled potential for further interest rate hikes.
- Investors await U.S. CPI data and testimony from Fed Chair Warsh.
- U.S. military strikes against Iran continued.
Asian markets experienced volatility as President Donald Trump's threat of a 20% fee on cargo ships passing through the Strait of Hormuz spooked traders, while oil prices surged. Brent crude futures climbed to their highest since mid-June, reaching $85.50 per barrel.
Federal Reserve Governor Christopher Waller's hawkish comments this week boosted market odds of more rate hikes, potentially as soon as later this month. This prospect, combined with ongoing U.S. military strikes against Iran and the potential Hormuz levy, roiled markets in Asia.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.2%, led by declines in Taipei and Seoul. Chinese stocks fared better after data showed exports surged in June, buoyed by demand for chips and data center computing power. In Tokyo, Finance Minister Satsuki Katayama indicated Japan might adjust its Government Pension Investment Fund strategy.
Investors are awaiting U.S. CPI data and testimony from Fed Chair Warsh before Congress, where he is likely to field questions on the central bank's balance sheet plans.