Asia-Pacific Market Update: Trump Faces Critical Decision on Iran

As the U.S. military strikes against Iran enter their tenth consecutive night, President Trump is reportedly nearing a critical decision on whether to pursue a ceasefire or escalate military actions. This situation is contributing to fluctuations in global markets, particularly in oil prices, which are holding near one-month highs.

Recent data from New Zealand indicates that inflation rose to 4.1% in Q2 2026, surpassing forecasts and the Reserve Bank of New Zealand's own estimates. This has implications for monetary policy in the region, as the RBNZ's inflation model previously indicated a rate of 2.7% year-on-year, unchanged from Q1.

In the context of trade, Trump has announced new tariffs of up to 50% on Canadian alcohol, dairy, and motor vehicle products, citing discrimination against U.S. commerce. Canadian Prime Minister Mark Carney has expressed a willingness to negotiate rather than retaliate immediately.

Goldman Sachs has projected that Brent crude oil prices could rise above $120 per barrel in the fourth quarter of 2026 if disruptions in the Strait of Hormuz continue, with an average price of $100 expected in 2027. This is compounded by reports from Israeli intelligence suggesting that Iran has relocated nuclear centrifuges into tunnels at Pickaxe Mountain, raising concerns about regional stability.

The People's Bank of China set the USD/CNY central rate at 6.7917, slightly above the estimated 6.7706, as the national team reportedly spent nearly $9 billion to support the stock market amid ongoing economic pressures.

As the situation develops, market participants are closely monitoring the potential outcomes of Trump's decision on Iran, which could significantly impact risk assets and commodity prices in the coming weeks.