Brent Surges 3.5%, KOSPI Plunges 7% as Gulf War Escalates

A third US wave, confirmed by Centcom, hit dozens of Iranian air defence systems, coastal radar sites, and missile and drone capabilities, marking the first use of one-way attack aerial and sea drones in the campaign. Unconfirmed reports suggested the strikes had killed Iran's IRGC chief at an underground command centre. Iran answered with further intensive missile salvos, deepening the conflict rather than winding it down, the source close to Ghalibaf said.

The oil market reaction was immediate. Brent crude jumped more than 3.5% in early Asian trading. Roughly 20 vessels were reported to have transited the strait in coordination with the US military over the prior 24 hours, along with several more moving independently. The contested picture on shipping flows added to uncertainty, traders said. The dollar firmed as overnight index swaps priced in a higher chance of a Federal Reserve rate hike. The oil surge fed inflation expectations. Gold slid 1% as the dollar strengthened.

Asian equities bore the brunt of the risk-off move. Japan's Nikkei fell about 1.5%. Rising oil costs clouded the outlook just as earnings season began, and a chip stock selloff compounded the decline. Profit-taking in SK Hynix and Samsung Electronics deepened concerns over the durability of the AI memory rally, analysts said. The KOSPI's 7% intraday drop was the largest since May 4. US and European equity futures extended losses heading into Tuesday.

The next catalyst lands Tuesday, when June CPI data and Fed Chair Warsh's testimony to Congress are due. The inflation print and the Fed's response will set the tone for the dollar and risk assets, with the oil shock as the overriding factor. Traders are turning to forex market analysis for the next direction. The strait will not reopen in the medium term, the source close to Ghalibaf said.