Iran Strikes Reignite Oil Premium; FOMC Minutes Hawkish
As of 2026-07-09 07:00 SGT
Key points
- The U.S. military launched a second consecutive night of strikes on Iran, expanding targets to missile and drone facilities; President Trump declared the ceasefire "over" and doubted whether Iran would honor a new deal
- FOMC minutes from the June meeting showed a few officials argued for an immediate rate hike while broader inflation concerns intensified; Fed Funds futures extended their hawkish repricing to roughly 38bp of tightening by year-end
- The Dow fell 576 points (-1.09%), touching an intraday low of -855 points, while the Nasdaq closed +0.19% as Nvidia (+3.67%) and the Philadelphia Semiconductor Index led a tech rebound
- WTI crude rose to $74.59 (+1.46%), breaking above Wednesday's intraday high of $72.51, with Brent briefly topping $80 during European hours
- Chicago Nikkei futures point to a 990-point rebound at Thursday's Tokyo open, partially reversing the Nikkei's 2.11% three-session decline
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 162.57 | +0.01% |
| EUR/USD | 1.1422 | +0.11% |
| Nikkei 225 (close) | 66,819 | -2.11% |
| Hang Seng (close) | 24,199 | +2.99% |
| Dow futures | 52,574 | -0.10% |
| S&P 500 futures | 7,517.75 | -0.15% |
| Nasdaq 100 futures | 29,414 | -0.18% |
| Gold futures | 4,088.30 | +0.14% |
| WTI crude | 74.59 | +1.46% |
| Bitcoin | 62,252 | -1.68% |
| US 10-yr yield | 4.569% | +4.0bp |
Foreign exchange — Safe-haven dollar holds USD/JPY above 162; intervention risk caps the upside
USD/JPY is at 162.57, essentially unchanged (+0.01%) from Wednesday's close and within Wednesday's 162.08–162.70 range. Safe-haven dollar demand from the Iran escalation provides a floor, while yen-selling pressure is constrained by Japan's 10-year JGB yield briefly touching 2.87%—the highest since May 1997—which narrows the effective rate differential. Japanese officials have reiterated intervention readiness, capping USD/JPY rallies into the 163 area. EUR/USD edged up to 1.1422 (+0.11%), near the lower end of Wednesday's range, with positioning cautious ahead of the ECB meeting minutes. USD/JPY is expected to remain range-bound in the 162–163 area through today's Tokyo session, with intervention-watch pricing limiting any sustained break higher.
Equities — Dow leads the selloff while tech absorbs the shock; Tokyo set for a rebound
Wednesday's session was sharply bifurcated. The Dow fell as much as 855 points intraday before closing down 576 points (-1.09%), as energy-cost fears and broad risk aversion weighed on cyclicals. The S&P 500 closed -0.28%. The Nasdaq Composite bucked the trend, ending +0.19%, anchored by Nvidia's 3.67% gain alongside Super Micro Computer (+7.39%) and the Philadelphia Semiconductor Index rising more than 2%. The Hang Seng surged 2.99% to 24,199, led by Alibaba's 12% advance amid reports that Beijing may permit top AI firms to purchase limited quantities of Nvidia H200 chips; Hang Seng Tech rose 4.97%. Chicago Nikkei futures stand at 67,800, implying a 990-point recovery from Osaka's last close, with ADRs mixed—Mizuho Financial rose while Honda declined. Tokyo's open should see semiconductor and AI names lead a rebound from three sessions of losses; the Nikkei's near-term direction hinges on whether the Iran situation deteriorates further.
Macro — FOMC minutes confirm hawk lean; RBNZ ends three-year rate pause
Wednesday's FOMC minutes revealed that a few members explicitly argued for a June rate hike, with the broader committee noting intensifying inflation concerns and only modest easing of labor-market anxiety. Fed Funds futures extended their implied tightening path to approximately 38bp of additional hikes by December 2026. The 10-year Treasury yield rose 4.0bp to 4.569%, compounded by oil-driven inflation expectations. Separately, the Reserve Bank of New Zealand raised its Official Cash Rate 25bp to 2.50%—its first hike in three years—reinforcing a broadening global tightening cycle. Japan's 10-year JGB yield briefly touched 2.87% intraday, the highest since May 1997. On the calendar Thursday: China June CPI and PPI at 09:30 SGT, U.S. initial jobless claims (forecast 218K) at 20:30 SGT, ECB June meeting minutes at 19:30 SGT, and New York Fed President Williams speaking. Fed Chair Kevin Warsh is scheduled to deliver the semi-annual monetary policy testimony to the Senate Banking Committee on 15 July. Tonight's claims print and ECB minutes are the next key inputs for how far the global tightening cycle extends through year-end.
Commodities — Oil breaks above prior range; gold gives back intraday gains
WTI crude at $74.59 (+1.46%) has broken above Wednesday's intraday high of $72.51, driven by Iran strike headlines and Hormuz closure warnings. Brent crude briefly exceeded $80 during European trading. Prediction markets price Hormuz traffic not returning to normal until next year. Gold reached an intraday high of $4,167.20 on Wednesday before dollar strength and rising Treasury yields drove it back to $4,088.30—below Wednesday's intraday range of $4,107–$4,167—though the front-month contract registers a modest +0.14% versus the prior settlement. Persistent Iran-linked supply anxiety supports further oil upside; additional dollar/yield pressure would put gold's $4,050 area in focus.
Geopolitics — U.S.-Iran ceasefire collapses; Hormuz risk reprices energy markets
U.S. Central Command confirmed a second night of strikes on Iranian military assets—the fourth wave since the June memorandum of understanding—with targets expanded to missile-production and drone-assembly facilities. Trump said the ceasefire was "over," expressed doubt about Iran's willingness to honor a deal, and warned that retaliation would be "20 times harder" for every Iranian attack. Iranian authorities warned of a large-scale retaliatory strike against U.S. bases in the region and again raised the prospect of a Hormuz closure. At the NATO summit in Istanbul, Trump secured defense spending commitments and authorized Ukraine to manufacture Patriot missile interceptors domestically. A joint statement from the IEA, IMF, World Bank, and WTO acknowledged global economic resilience but warned that the conflict poses deepening risks to growth and price stability. The IMF revised its 2026 global growth forecast down to 3.0%. Hormuz supply risk is now the dominant macro risk premium in energy and fixed-income markets; any escalation scenario would fundamentally reprice global oil and inflation expectations.
Upcoming events
| Time (SGT) | Region | Event | Focus |
|---|---|---|---|
| 07/09 20:30 | US | Unemployment Claims (forecast 218K) | Labor market resilience and Fed path |
| 07/10 20:30 | CA | Employment Change (forecast 11.2K) | North American labor-market direction |
| 07/10 20:30 | CA | Unemployment Rate (forecast 6.6%) | Same |