Global markets closed out Q2 2026 on a broadly constructive note, with Wall Street posting its best quarterly performance since the pandemic — the S&P 500 gaining 9.55% year-to-date and the Nasdaq 12.79% — even as persistent inflation driven by the Middle East conflict keeps central banks in hawkish mode. The Fed, under Chair Kevin Warsh, has abandoned its rate-cut forecast entirely with core PCE at 3.3% and CPI running at 4.2%, while the ECB delivered a 25bp hike at its June meeting, lifting its deposit rate to 2.25%. A significant overnight development — the US and Iran agreeing to halt hostilities and reopen the Strait of Hormuz, with Envoy Witkoff heading to Doha — has injected a meaningful dose of risk-on sentiment into the session, easing the geopolitical premium that has weighed on markets since early 2026. The VIX falling 6.8% to 16.45 reinforces the improved risk backdrop, though the durability of any ceasefire agreement remains the central uncertainty.
For Asia-Pacific markets opening today, the cross-asset picture is mixed but skewed cautiously positive. Crude oil's 1.77% fall in WTI to $69.50 and the broader ceasefire signals are a relief for energy-importing economies like Japan and Korea, though they add headwinds for ASX-listed energy producers such as Woodside and Santos. Copper's 1.56% rise to $6.19/lb and aluminium's 1.25% gain are constructive for Australian miners, while gold's near-flat close at $4,022.90/oz — pressured by a firmer USD and reduced safe-haven demand — offers little immediate support for local gold producers. The ASX 200 enters the new financial year on a cautious footing after Tuesday's 0.51% decline, with the RBA's hawkish June minutes, softening bank sentiment, and a key China June PMI release all in focus for today's session.