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The week in Global Markets
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Concerns about crowded Asian chip valuations developed into a global technology selloff, then spread into copper, emerging-market equities, credit, and leveraged Chinese positions. By week’s end, investors were questioning whether AI spending and financing could support elevated valuations.
Renewed US-Iran escalation repeatedly lifted oil and pressure on emerging-market currencies, stocks, and bonds. The resulting inflation shock strengthened higher-for-longer expectations, while gold’s haven response remained inconsistent as rate concerns dominated.
A soft June inflation report sharply reduced July hike bets and drove a Treasury rally, but successive hawkish warnings from Fed officials kept the easing narrative contested. By Friday, cooler inflation still supported a weekly bond gain without resolving the policy split.
South Korea moved toward freer offshore won trading as the currency benefited from expected investment inflows, but the equity market remained unusually volatile. Regulators’ focus on single-stock leveraged ETFs showed that greater market access is arriving alongside fragile price formation.
China’s growth slowdown exposed weak domestic demand and job creation, while regulators increased pressure on indebted local financing vehicles. Liquidity injections and expectations for targeted support addressed immediate strains but did not signal a broad consumption-led recovery.
The United States announced selective tariffs on Brazilian imports, creating uncertainty for trade and commodities. Brazil chose negotiation over immediate retaliation, reducing the near-term risk of a broader confrontation.
Senegal’s planned debt-market engagement was overtaken by estimates that bond recoveries in a restructuring could fall below current prices. The gap leaves frontier-market investors exposed to a sharp repricing as the restructuring outlook becomes clearer.
The IMF linked Europe’s rising interest costs and weaker growth to worsening debt dynamics, while renewed Middle East fighting added energy and confidence risks. The combination pushed euro-area growth expectations lower.
Day’s Recap