US Fed Chair Kevin Warsh is set to give testimony to Congress over the next two days, with markets watching closely for any indication of the central bank’s plans for its balance sheet. This comes as Asian markets are experiencing a downturn and Brent Crude prices are rising, currently around $85 per barrel.

Global Market Reaction

The prospect of more rate hikes this year, potentially as soon as later this month, has been boosted by hawkish comments from Fed Governor Christopher Waller. This, combined with the ongoing situation in the Strait of Hormuz and the US military’s strikes against Iran, has led to a volatile market environment. Brent futures have climbed to their highest since mid-June, while S&P 500 e-mini futures have eased 0.2%.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.2%, led by declines in shares in Taipei and Seoul. Despite the bear market in South Korea, it remains one of the world’s best-performing indexes this year. In early European trades, pan-region futures were down 0.9%, with German DAX futures falling 0.9% and FTSE futures sliding 0.4%.

Chinese stocks have fared better than most, following data that showed exports surged in June, driven by demand for chips and data centre computing power to fuel the global AI boom. Meanwhile, Japan’s Finance Minister Satsuki Katayama has indicated that the country may consider adjusting the strategy of the giant Government Pension Investment Fund if the investment environment changes sharply.

In other news, the Trump administration has announced that it is blocking American citizens in the Democratic Republic of Congo from traveling back to the US on commercial flights, citing the Ebola outbreak. Key developments that could influence markets include company earnings from major banks and economic data such as the US June CPI and core inflation.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.