Middle East Escalation Hammers Asia Markets on July 13
Iran-US strikes and Hormuz fears rocked Asia-Pacific FX and equities. Here's what moved and why it matters to your trades.
Monday's Asia-Pacific session opened ugly. South Korean equities cratered more than 5% as profit-taking crushed SK Hynix, and the Nikkei joined the selloff. The trigger? A full-blown Middle East escalation over the weekend that rattled every risk asset on the board.
The US launched fresh waves of strikes on Iranian targets to protect Gulf shipping, and Iran fired back — targeting Jordan with ballistic missiles and, in the biggest market-moving headline, moving to close the Strait of Hormuz. That one sent oil futures ripping more than 4% higher right at the Globex open. Gold, counterintuitively, slid over 1% — likely as traders unwound hedges and the Fed's inflation warning added a hawkish undertone to the mix.
Read more Oil Surges 10% as Trump Blockades Iran and Taxes Hormuz Shipping →
Equity markets across the US, Europe, and Asia all traded lower as the fight escalation narrative dominated. Goldman Sachs, for its part, still expects US core CPI to cool to 2.8% year-on-year for June — but Hormuz-driven oil spikes are exactly the kind of supply shock that scrambles those tidy inflation models fast. Watch that CPI print now more than ever.
On the FX side, the PBOC set its USD/CNY reference rate at 6.7972, slightly weaker than the 6.7850 estimate — a subtle but notable signal. Angola added the yuan to its official bank reserve currency options alongside the dollar and euro, another incremental step in yuan internationalization as China deepens ties across emerging markets. The Bank of Japan, meanwhile, is expected to hold rates steady at its upcoming meeting while potentially lifting its 2026 growth forecast.
Bottom line: risk-off is in the driver's seat. Oil longs look compelling on any Hormuz headline. Commodity-linked currencies face a two-sided squeeze — energy gains versus global growth fears. Stay nimble. Continue reading at Forexlive.
