The dominant macro driver on Monday was a sharp reversal in crude oil, with WTI falling 8.44% to $81.77/bbl and Brent dropping 9.48% to $87.61/bbl after geopolitical de-escalation hopes between the US and Iran unwound an earlier spike above $100/bbl. The move repriced near-term inflation risk lower and pulled US Treasury yields modestly down — the 2-year fell 4bp to 4.33% and the 10-year eased 2bp to 4.69% — though the 30-year remains at 5.16%, a level that continues to price in structurally elevated long-end term premium ahead of this week's Fed decision. The VIX ticked up to 18.72, signalling that despite the oil relief, options markets remain cautious into a week stacked with the FOMC, Big Tech earnings, and US GDP data.
For Asia-Pacific, the oil reversal is a net input-cost positive for energy-importing economies — Japan, Korea, and China — but the cross-asset picture is complicated. USD/JPY held at 163.73 despite the modest Treasury yield decline, underscoring persistent structural yen weakness as the BoJ heads into its July 30–31 meeting expected to hold at 1.00%. USD/KRW rose 0.53% to 1,465.79 as the KOSPI was hit hardest in the region, down 5.72%, driven by a semiconductor sector rout that has direct read-through to Samsung Electronics and SK Hynix. CNY firmed modestly with USD/CNY dipping 0.10% to 6.7652, but the SSE fell 1.61% and the CSI 300 dropped 3.60%, reflecting domestic demand concerns that a softer oil print alone cannot offset. The Nikkei VIX pulled back 5.57% to 32.88 even as the index fell 2.73%, suggesting some positioning washout rather than escalating panic, while the ASX VIX jumped 6.86% to 11.69 as Australian industrials and materials bore the brunt of sector-level selling.