Report by Renta 4
The South Korean Kospi, which for the second time this week has had to suspend trading due to a maximum fall (of up to 9%), with the two major players (Samsung and SK Hynix, which together account for almost 60% of the index) falling by more than 10%. It has since recovered slightly, to negative 7%.
Amid this volatility in the tech sector, OpenAI is reportedly considering delaying its IPO until 2027, a move that has been met with a fall in SoftBank shares (down 14% in Tokyo). We note that Anthropic also plans to go public in the autumn.
Another significant focus of attention regarding AI – and one which confirms that it will be inflationary in the short term, although it may be deflationary in the long term – is the pass-through to consumers of the shortage of memory and storage chips caused by the massive expansion of AI data centres, with Apple’s announcement that it will raise the prices of all its products (Mac, iPad, home devices and Vision Pro). The price rises will be around 20 per cent, with warnings that there may be further increases for the iPhone in September, causing Apple’s share price to fall by 6 per cent (its biggest drop since April 2025).
There is also volatility in the crude oil market. Yesterday, Brent crude, after hitting lows of $72 per barrel, rebounded by 5% to $76 following the Iranian attack on a Taiwanese merchant vessel in the Strait of Hormuz off the coast of Oman – a sign that security risks remain which could complicate a full reopening. The IMO (International Maritime Organisation) has decided to suspend evacuation operations from the Persian Gulf until further clarity is obtained. The Iranian authority for the Strait of Hormuz states that transits outside its framework will not be covered by insurance nor will they receive “guarantees of safe passage”. These developments are causing high volatility in crude oil prices (Brent now at $74).
Meanwhile, tensions between the US and Iran continue, with the spokesperson for the Iranian Parliament refuting Trump’s claims that the unfrozen Iranian funds will be used to purchase American agricultural products.
Meanwhile, the latest US data paint a positive picture: an acceleration in private consumption in May (personal spending better than expected) following an upward revision to the final reading of Q1 26 GDP (2.1% quarter-on-quarter annualised against 1.6% in the initial revision) and better-than-expected weekly unemployment figures.
On the price front, the core private consumption deflator (the Fed’s preferred measure of inflation) remained at 3.4% in May, its highest level since October 2023 and contrary to the slight slowdown forecast, although the fall in oil prices should allow the June figure to improve significantly. The market continues to price in 1–2 Fed rate hikes through to Q1 2027.
On the macro front, in Japan, June’s price data confirmed the expected acceleration, with headline CPI at 1.7% year-on-year (1.6% against 1.4% previously) and core CPI at 1.9% year-on-year (1.8% against 1.6% previously), and the market continues to price in a further 25 basis point rate rise by the Bank of Japan by the end of the year. In the Eurozone, we will be keeping a close eye on the ECB’s price expectations, with a possible slight moderation: 1-year CPI (3.9%e against 4% previously) and 3-year CPI (2.8% against 2.9% previously).
