Risk sentiment improved overnight after US June PPI came in at –0.3% MoM, well below the flat consensus, driven by a 6.4% MoM collapse in energy prices, while core PPI held at a sticky +0.2% MoM — giving the Fed under Chair Kevin Warsh room to hold its 3.5–3.75% target range without immediately hiking further. The ECB's June 25bp hike to 2.25% — its first since September 2023 — and the BoE's hold at 3.75% underscore a divergent but broadly hawkish developed-market central bank backdrop, even as softer US data tempers near-term rate fears. Geopolitical risk remained a floor under oil prices, with Iran-related port blockades and Strait of Hormuz transit disruptions keeping WTI near $79.60 and Brent near $84.95 despite the energy-driven PPI relief. The VIX fell 5% to 15.67, signalling improved near-term risk appetite heading into Thursday's session.
For Asia-Pacific markets opening today, the soft US inflation print and broad Wall Street gains — S&P 500 +0.38%, Nasdaq +0.62% — provide a constructive overnight handover, though the ASX's own VIX at a notably low 11.15 suggests complacency risk. The KOSPI's extraordinary +6.24% surge and Hong Kong's +1.40% gain reflect strong regional momentum, while the Nikkei's +1.49% advance and a modestly weaker USD (DXY –0.44% to 100.5) are supportive for export-oriented Asian markets. However, China's slowest GDP growth since 2022 and weakness in the SSE (–0.29%) are headwinds for commodity-linked ASX names, and the mixed copper (–0.58%) and iron ore (–0.04%) moves suggest caution for the materials sector. AUD-sensitive investors should note the firmer EUR and GBP against the USD, though USD/JPY at 162.19 remains elevated, keeping currency cross-currents in play.