Asia-Pacific markets: oil steady after Hormuz strikes, gold retreats

Summary:

• Oil prices edged up after US and Iranian forces carried out tit-for-tat attacks on Strait of Hormuz shipping over the weekend
• Mohsen Rezaei, Iran's top security official, was reported over the weekend saying that Tehran will declare a restricted zone near the strait and announce a new shipping route agreed with Oman in the coming days and weeks
• OPEC kept its October oil output quotas unchanged
• Gold fell back toward the USD 4,400/oz mark after last week's US jobs data came in stronger than expected, strengthening the case for a Fed rate hike this month
• Japanese and South Korean stocks advanced on optimism over chip demand, even though the explanation given for Japan's climb sits awkwardly alongside Friday's Wall Street losses outside semiconductors
• Hong Kong shares declined, with the Hang Seng off more than 1% and the Hang Seng Tech Index down roughly 1.1%
• Major FX markets stayed quiet, with just small moves among the main currencies
• Because of Monday's US Labor Day holiday, CME Globex opens normally on Sunday evening, halts early around midday Monday, and reopens that evening

Oil traded slightly higher on Monday as a weekend exchange of strikes between US and Iranian forces on ships in the Strait of Hormuz left a geopolitical risk premium intact. Over the weekend, reports emerged that Mohsen Rezaei, Iran's top security official, said Tehran will declare a restricted zone near the strait and unveil a new shipping route agreed with Oman over the coming days and weeks. Elsewhere on the oil front, OPEC left its October output quotas unchanged, remaining on its current course for the rest of the year.

Gold slid toward the USD 4,400-per-ounce mark, weighed down by Friday's NFP release, which showed US job growth above expectations and reinforced the case for the Federal Open Market Committee (FOMC) to lift rates next week.

Equities in Japan and South Korea gained ground, with chipmakers buoyed by optimism about AI investment demand. The Kospi and Nikkei both moved higher, and Samsung Electronics and SK Hynix paced the advance in Seoul. The rationale offered for Tokyo's rise — that calmer bond markets and a more stable yen reduced volatility and prompted a turn toward risk-on positioning — deserves some skepticism, however, given that Wall Street finished Friday lower as expectations for a Fed rate increase grew; semiconductors were the one sector to resist that broad selloff.

Hong Kong diverged: the Hang Seng Index fell by more than 1%, while the Hang Seng Tech Index shed roughly 1.1%. Foreign exchange markets were largely subdued, with major currencies posting only small moves.

Traders should keep in mind that Monday is a US holiday. CME Globex began its Sunday-evening session at the usual time, but Monday's trading will stop early around midday and then resume that evening for Tuesday's trade date.