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Last updated: June 7, 2026, 11:31 PM ET

Geopolitical Shockwaves

Oil prices jumped sharply after Iran fired missiles toward Israel, threatening a fragile ceasefire in the Middle East and raising concerns about potential supply disruptions. The escalating conflict prompted Israel to bomb Beirut outskirts as fighting with Hezbollah intensified, while Prime Minister Netanyahu launched a counterassault despite pleas from President Trump to prevent escalation. This regional instability has pushed crude benchmarks to multi-week highs, with Saudi Arabia cutting July oil prices to Asia for a second straight month though premiums remained near the highest in decades. Meanwhile, gold held losses as geopolitical tensions failed to provide safe-haven support amid rising Treasury yields.

Asian Market Turmoil

Asian markets started the week sharply lower following a tech-led selloff on Wall Street and heightened expectations of prolonged higher interest rates after robust US jobs data. South Korean stocks plunged, imperiling the world's biggest rally, as investors pulled back from artificial intelligence bets that have fueled the bull market. The Kospi index's decline triggered a circuit breaker, though Goldman Sachs' Timothy Moe expects a rebound after the "scary" correction. Meanwhile, Japanese stocks are set to fall, led by tech shares, while JGB futures declined tracking Friday's price drops in the U.S. Treasury market.

Commodity Price Movements

Asia coal prices rose to 22-month highs as Indonesia's new export rules delayed shipments, tightening supplies just as demand for power-plant fuel increases. In China, coking coal hit 2024 highs as the aftermath of a deadly mining accident and ongoing safety inspections kept prices elevated. This follows airlines cutting flights like Air New Zealand which is reducing capacity due to rising jet fuel costs amid Middle East supply concerns. The surge in commodity prices has fueled inflation concerns, causing gold to retreat from $5,000 per troy ounce as Treasury yields climb amid higher energy prices.

Currency & Regional Markets

Asian currencies remained mixed against the dollar as traders grappled with growing Fed rate-hike expectations after the strong US jobs report. The Indian rupee found support from hopes of $30 billion-$40 billion inflows from the RBI's swap facilities, shifting focus away from psychological 100-a-dollar fears. Indonesian authorities now need to provide firmer policy guidance after last week's selloff that pummeled stocks and the currency, according to analysts. Japan's economy maintained solid growth at the start of the year despite turbulence in Iran prompting businesses to cut investment, though corporate Japan is borrowing more to cover cash shortfalls fueled by record merger activity and capital investments.