Fin-X Weekly 6th July 2026

Even as US equities ended June strongly, technology shares came under renewed pressure amid AI-related concerns, prompting sharp falls in Korean stocks at the start of July.

Oil steadied as Iran continued to assert control over traffic in the Strait of Hormuz despite indirect talks held in Doha.

US labour market data weakened, supporting short-dated Treasuries and gold, while Fed Chair Kevin Warsh reaffirmed the 2% inflation target.

This week’s focus is on FOMC minutes, Chinese inflation data, the OPEC+ virtual meeting and the NATO summit in Turkey.

Stocks and bond yields moved higher early last week, before losing momentum ahead of the American Independence Day long weekend.

The Dow Jones Industrial Index ended June at an all-time high, closing out its best first half in five years. The Nasdaq recorded its best quarter since 2020, extending the rebound that began in April. All major asset classes finished the Australian financial year in positive territory, except A-REITs, which were just under -2% lower after also rebounding from the March lows.

The new financial year began with renewed pressure on technology shares. The Korean market fell -7.9% on Thursday, following the Nasdaq lower as chip manufacturers sold off on AI-related concerns. Samsung Electronics dropped by -8%, while SK Hynix fell more than -12%, wiping billions from market value as Asia’s largest chipmakers bore the brunt of the global technology sell-off. Samsung and SK Hynix now account for around half of the Kospi’s total weight, up from around a quarter at the end of last year.

Last week, it emerged that Anthropic had started early-stage work on its own AI chip and held talks with Samsung as a potential partner.

The US administration also lifted export controls on the advanced Fable 5 model. OpenAI is reportedly working with the government on its own GPT-5.6 model release. The FT confirmed that the White House is in advanced talks with OpenAI, Google and Anthropic on a framework of voluntary standards for the release of frontier models. This could potentially replace the current ad hoc export-control approach. OpenAI CEO Sam Altman also proposed handing a 5.0% stake in the company to the government, urging competitors to do the same.

Investors were optimistic ahead of two days of indirect talks between the US and Iran held in Doha. However, oil prices steadied after Iran reiterated its determination to maintain control over maritime traffic moving through the Strait of Hormuz. Deputy Foreign Minister Kazem Gharibabadi said Iran wants to work out an agreement with Oman to oversee ships passing through the Strait of Hormuz, but would move forward with its own plans if Oman were not interested. US Secretary of State Marco Rubio said any tolls or fees for ships passing through the strait would be unacceptable.

Bloomberg then reported over the weekend that at least eight ships attempting to leave the Persian Gulf along the Omani coast turned back between Friday and Saturday. Some vessels continued their transits by switching to a route closer to Iran, after initially sailing towards the Strait of Hormuz and then making sharp reversals. Iran has repeatedly said that vessels should transit the strait only through the authorised route designated by the Islamic Republic. Vessels attempting to leave the Persian Gulf have reported hearing Iranian forces warn over radio communications that they needed permission from Tehran for their crossings.

Longer-dated bond yields closed towards the highs of the week, despite US labour market data generally undershooting expectations. According to the BLS, the unemployment rate ticked down to 4.2% in June. However, the improvement was almost entirely due to a fall in participation, which led to a decline in the employment-population ratio to 59.0%. Non-farm payroll additions were just +57k, compared with a consensus forecast of +113k. Prior two-month payroll revisions were also -74k.

The weakness was visible in more than one survey. Private sector employment grew by a seasonally adjusted +98k for the month, down from +122k in May and below the forecast of +110k, according to ADP. The less timely May JOLTS report showed no increase in seasonally adjusted hiring, while the ISM manufacturing employment series remained in contraction in June despite a more upbeat outlook for the sector.

Susan Spence, Chair of the ISM Manufacturing Business Survey Committee, said, “In June, US manufacturing activity remained in expansion territory, growing at a slightly slower pace as compared to the month before. Of the five subindexes that make up the PMI, the New Orders and Production indexes grew slower as compared to the previous month, the Supplier Deliveries Index slowed at a slower rate, and the Employment and Inventories indexes improved with the latter entering expansion territory.”

Short-dated Treasury yields dipped, and gold jumped after the weaker data bolstered expectations that the Fed will not raise rates any time soon.

Speaking at the ECB conference in Sintra, Kevin Warsh reiterated that the Federal Reserve would stick with the 2% inflation target under his leadership and that he sees inflation risks easing.

The recently appointed Fed Chair had previously said the FOMC would review its policy framework and that he favoured moving away from forward guidance as a policy tool. The minutes of his first meeting as Chair are due out this week.

In Australia, Assistant Governor (Financial Markets) Chris Kent said in a speech presenting a review of policy tools that forward guidance would remain in the Reserve Bank’s toolkit.

He added that the RBA is likely to intervene in currency markets only in very rare circumstances. This contrasts with Japanese policy. After the Japanese yen weakened to its lowest level against the US dollar since 1986 last week, Finance Minister Satsuki Katayama said on Tuesday that the government was ready to take appropriate action against excessive currency moves. The yen strengthened later amid speculation of a fresh round of intervention.

Besides the FOMC minutes, there is relatively little data out this week. ANZ-Indeed Job Ads and Melbourne Institute inflation figures are due today, followed by eurozone retail sales and PPI figures tonight. Chinese CPI and PPI numbers are due on Thursday. Significant events this week include the OPEC+ virtual meeting on production and the NATO summit in Turkey.

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