Key Takeaways:
- Asian stock markets demonstrated robust performance, with Indonesia's benchmark index climbing 1.1% to a seven-month high and Taiwanese stocks rising 1.5%.
- Ether (ETH) experienced a significant surge, gaining over 5% to reach $3,606.17, signaling strong bullish momentum in the crypto market.
- Geopolitical tensions remain a focal point, highlighted by Israel's expression of regret for a deadly strike on a Gaza church following a call with Donald Trump, and a US House committee chair's warning to Panama regarding Chinese influence over the Panama Canal.
- Currency markets saw mixed signals, with the Yen expected to remain under pressure, while China's yuan strengthened slightly against the dollar following a substantial People's Bank of China (PBoC) liquidity injection.
- Gold is on track for a modest weekly decline as investors assess the outlook for Federal Reserve rate cuts amidst a stronger dollar and rising U.S. yields.
Asian equity markets posted strong gains, with Indonesia's stock market advancing 1.1% to 7,364.031 points, marking its highest level since December 13, 2024. Similarly, Taiwanese stocks rose 1.5% to 23,468.210 points, reflecting broad market optimism in the region. In the cryptocurrency sector, Ether (ETH) saw a notable increase of over 5%, pushing its price to $3,606.17.
On the geopolitical front, Donald Trump is reportedly nearing a legislative victory in his efforts to claw back approximately $9 billion in foreign aid and public media funding (WSJ). This comes as a US House committee chair issued a warning to Panama regarding growing Chinese influence over the strategically critical Panama Canal (SCMP), raising concerns about global shipping and supply chain security. Meanwhile, Israel voiced regret for a deadly strike on a Gaza church after a call with Donald Trump (SCMP), underscoring ongoing tensions in the Middle East.
In currency markets, the Yen is projected to remain under pressure in the near term, according to TD Securities (WSJ). Conversely, China's yuan opened slightly stronger against the dollar at 7.1790 per dollar, compared to its previous close of 7.1809. This slight appreciation follows the People's Bank of China (PBoC) injecting 187.5 billion yuan through 7-day reverse repos at an unchanged rate of 1.40%, resulting in a net injection of 102.8 billion yuan in open market operations. The USDCNY reference rate was fixed at 7.1498.
Gold held steady but is poised for a modest weekly decline as investors continue to weigh the outlook for Federal Reserve rate cuts. A stronger dollar and rising U.S. yields have added pressure to the precious metal, with markets awaiting further key economic data to gauge the Fed's next policy move.
Other notable geopolitical developments include reports that President Ahmed al-Sharaa has left Syria's capital following Israeli airstrikes on July 16 that targeted military buildings, resulting in at least three fatalities and dozens wounded. North Korea also criticized Japan's "reckless" ambition to become a major military power (SCMP), escalating regional rhetoric. Furthermore, Hungary's Prime Minister Viktor Orbán suggested that the Ukraine conflict will only conclude through direct talks between the U.S. and Russia, proposing a "grand deal" covering energy prices, sanctions, and arms control. A Ukrainian drone en route to Moscow was reportedly destroyed by Russian air defenses, according to the city's mayor, indicating continued hostilities. In a financial market shift, the "tiny" Beijing stock exchange is transforming into an IPO hub, no longer considered merely a "pet project" (FT). Lastly, Donald Trump communicated to Jair Bolsonaro that he is watching Brazil "closely" (CNBC).

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.