Risk sentiment improved materially on Tuesday as President Trump pivoted toward diplomacy in the Middle East, raising hopes of a deal to reopen the Strait of Hormuz and triggering a broad risk-on move across global equity markets. The S&P 500 and Dow Jones both closed at fresh record highs, led by a ferocious 5% surge in the Technology sector, while US Treasury yields declined modestly across the curve — the 10-year falling 5 basis points to 4.70% — suggesting markets are simultaneously pricing stronger growth and some residual safe-haven demand. The ECB's most recent move was a 25 bp hike in June 2026 lifting the deposit rate to 2.25%, while the RBA holds at 4.35% ahead of its 11 August policy meeting, leaving rate differentials broadly USD-supportive even as the DXY edged marginally lower to 99.89. Gold surged 1.53% to USD 4,095/oz and silver rallied 4.14%, signalling that inflation and debasement hedging remain active alongside the risk-on tone.
For Asia-Pacific markets opening today, the overnight signal is constructively positive but nuanced. The ASX 200 closed up 1.40% on Tuesday and should find further support from Wall Street's record close and tech leadership, though the sharp 5.69% drop in crude oil — WTI to USD 75.77/bbl, Brent to USD 79.36/bbl — will weigh on ASX energy names even as it provides a cost tailwind for industrials and discretionary. The VIX ticked up 4.04% to 16.5, a modest reminder that complacency is not fully priced in, while the ASX VIX rose 5.96% to 11.55, worth monitoring as local options markets begin to reprice. South Korea's KOSPI (+1.62%) and the broader Asian risk-on tone support a positive open, though Hong Kong's HKEX slipping 0.60% and flat SGX performance suggest selective caution remains appropriate in North Asia.