Morning Wrap: AI Back in Favor, Brent Close to $100 (07.09.2026)
The week concluded with the release of surprisingly strong Non-Farm Payroll (NFP) data, alleviating concerns about a cooling labor market amidst rising inflation. This has led to increased expectations for Federal Reserve rate hikes and a slight uptick in US Treasury yields. Precious metals faced some pressure, although the sell-off was limited.
Market Overview
Asian markets opened the week positively, with Korea's Kospi gaining 4.4%, largely driven by optimism in the semiconductor sector. Notably, SK Hynix saw a 7.1% increase, while Samsung rose by 4.8%. This surge is attributed to the launch of ChatGPT-6 Astra, a new AI designed to perform complex tasks, enhancing sentiment towards semiconductor companies. The iShares Semiconductor ETF (SOXX) also rose over 3.5% on Friday.
Chinese Market Developments
Despite gains in other regions, both the Hang Seng and Shanghai SE Composite indices were down. The Chinese government announced a significant recapitalization plan, injecting over $50 billion into its largest state-owned banks and insurance companies, primarily funded through bond issuance.
Geopolitical Tensions
Geopolitical developments over the weekend included comments from the US Secretary of Energy indicating that a nuclear deal with Iran is unlikely. This has led to OPEC+ canceling plans to increase oil production. Iran has also declared a new 'maritime exclusion zone' beyond the Strait of Hormuz, asserting control over the area, which has raised tensions with the US. Recent military actions included the Islamic Revolutionary Guard Corps firing missiles at US warships, prompting a US retaliatory strike on Iranian tankers.
Energy Commodities
In response to the geopolitical climate, energy commodity prices have surged. Brent crude is trading near $98 per barrel, while WTI is close to $93, marking increases of 10% and 8% respectively over the past week. Natural gas prices on the Dutch TTF exchange have also risen to $74 per MWh, reflecting a 7% weekly increase.
Currency Movements
The USDJPY has dropped by 1%, reaching its lowest point since February, indicating shifts in currency dynamics amidst the evolving economic landscape.
Looking Ahead
Upcoming economic events include the European Central Bank's decision, Oracle's earnings results, and US inflation data, which are anticipated to influence market movements in the coming days.