- During the Asian trading session, benchmark Brent crude oil futures rose by about 2% to $107.97 per barrel, a nearly three-week high, mainly driven by supply-side constraints due to stalled Middle East peace talks and the ongoing blockade of the Strait of Hormuz.
- The technology hardware sector showed significant excess returns, boosted by Intel's (INTC:US) optimistic revenue guidance and expected capital expenditure on artificial intelligence. The Nikkei 225, South Korea's KOSPI, and Taiwan's Weighted Index all reached historical highs.
- Macroeconomic liquidity is facing a critical window period, with companies representing 44% of the S&P 500's total market value set to release earnings reports this week. At the same time, the market expects the Federal Reserve, the Bank of Japan (maintaining a 0.75% rate), the European Central Bank, and the Bank of England to keep benchmark interest rates unchanged this week.
Geopolitical Premium and Energy Supply Chain Reevaluation
The long-term geopolitical friction in the Middle East is deeply reevaluating the global energy supply chain. Although U.S. and Israeli direct military actions against Iran have paused under a previous ceasefire agreement, the substantial closure of the Strait of Hormuz, a global core energy channel, has resulted in extreme supply contractions in crude oil and natural gas spot markets. Data shows that the average price of liquefied natural gas (LNG) shipped to Northeast Asia for June has climbed to $16.70 per million British thermal units, representing about a 61% premium compared to pre-conflict levels. Singapore jet fuel prices have also risen to $185 per barrel. Goldman Sachs analysts have raised their year-end target price for Brent crude to $90, but this is based on the assumption that exports from the Gulf region will resume by the end of June. If inventories deplete further, a short squeeze in the spot market could trigger a nonlinear upward shift in prices.
Capital Expenditure Outlook for Tech Giants
In stark contrast to the supply anxiety in the energy market, the equity market continues to maintain high expectations for the profitability of the artificial intelligence industry chain. Intel's second-quarter revenue guidance exceeded expectations, supporting the sustainability of computing infrastructure construction from a micro-enterprise profitability perspective. In Asia's semiconductor-heavy markets, substantial capital inflows have driven structural surges in the total market value of Japanese, South Korean, and Taiwanese stock markets. The market's focus this week will shift to the earnings performance of mega-scale cloud service providers such as Microsoft, Alphabet, Amazon, and Meta. If these companies' disclosed capital expenditures on AI infrastructure continue to show double-digit growth, it might further boost valuation benchmarks in the upstream chip design and foundry sectors.
Liquidity Pricing in the Central Bank's Overweight Week
Global foreign exchange and fixed income markets have maintained a low-volatility state ahead of the super central bank week. The euro is trading at 1.1724 against the dollar, and the dollar is trading in the 159.32 range against the yen. This week, the major monetary authorities, including the Federal Reserve, the Bank of Japan, the European Central Bank, and the Bank of England, will announce interest rate decisions. Against the backdrop of Brent crude returning above $100, energy-imported inflation may force developed economy central banks to tighten future policy path expectations. The market currently expects the Bank of Japan to keep the short-term policy rate unchanged at 0.75%. If the European and UK central banks show caution about a potential second inflation rebound in their policy statements, the market's current pricing of two 25 basis point rate cuts each within the year could face systemic revision.
