Oil Edges Lower on OPEC Increase, Dollar Steady: Markets Wrap

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(Bloomberg) — Oil opened lower as energy flows through the Strait of Hormuz persisted and OPEC+ signaled higher supplies. Traders were also focused on the Korean won’s first day of 24-hour trading. 

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S&P 500 futures held Friday’s gain after US markets were shut for a holiday. The dollar was steady against major peers in early Asian hours, while the won was also little changed. Oil dropped slightly after major OPEC+ members agreed to another modest increase to their collective oil-production quotas for next month. 

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Markets enter the second half on a cautious footing as investors weigh the fallout from the Iran war’s energy shock and whether the AI-driven rally can be sustained. After stocks recovered from a two-day rout in chipmakers last week, attention is shifting to earnings season for signs that massive spending on AI infrastructure is translating into profits.

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“Tech stocks and tech-heavy indices in the US and Asia have entered a period of consolidation ahead of the Q2 earnings season,” said Tony Sycamore, an analyst at IG Markets in Sydney.

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Asian traders will be closely watching South Korean markets Monday ahead of this week’s $29 billion US listing for SK Hynix Inc. The won was steady after rebounding from its weakest level against the dollar since 2009 late Friday on a Bloomberg report that officials were preparing for currency flows related to the listing. 

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The move to 24-hour trading for the currency is the centerpiece of Seoul’s years-long push to improve foreign investors’ access to local markets and bolster the case for an upgrade to MSCI Inc.’s developed-market index, where accessibility has long been a stumbling block. 

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Meantime, focus will also be on US Treasuries when cash trading reopens in Asia following Friday’s holiday. The US bond market faces a test of investor demand for longer-dated maturities this week, with auctions of 10- and 30-year Treasuries highlighting an otherwise light week for economic events. 

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The auctions come as minutes from the Federal Reserve’s June meeting will be closely parsed after Chair Kevin Warsh tempered his hawkish inflation stance last week. Traders trimmed expectations a hike was imminent following softer-than-expected jobs data and Warsh’s comment that inflation pressures had eased. 

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Some of the main moves in markets:

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Stocks

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Currencies

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Cryptocurrencies

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Commodities

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