As of 12:00 Germany time (CEST, UTC+2)
TL;DR: Markets ended the quarter with a constructive risk tone. European equities advanced, U.S. futures followed Wall Street higher and Asian technology shares stabilized. The main support came from two places: AI demand and a faster retreat in oil prices. The constraint is still rates. Central banks are not declaring victory on inflation, even with Brent back below the ECB’s stressed assumptions.
In Asian Equity Markets the tone was firmer but uneven. Japan’s Nikkei rose around 0.9%, helped by technology strength and a weaker yen. South Korea’s Kospi gained around 1% as Samsung and SK Hynix recovered on renewed confidence in large-scale AI and chip investment. Hong Kong lagged, with the Hang Seng down around 0.6%, while China’s June factory activity showed only modest improvement. Asia’s message was selective recovery: AI leadership is still attracting capital, but broader China-linked risk appetite remains less convincing.
In European Equity Markets stocks advanced into quarter-end. The STOXX 600 rose about 0.6% to roughly 639.8 and was heading for a quarterly gain near 9.7%, its strongest since 2020. Technology led the move, with ASML, STMicroelectronics and Infineon higher as investors continued to reward AI infrastructure exposure. Lower oil also helped travel, leisure and other energy-sensitive sectors. The European rally now has two engines: cheaper valuations than the U.S. and a clearer AI catch-up story.
In U.S. Equity Markets futures pointed higher after Wall Street’s Monday rebound. The Nasdaq remains the center of gravity after a sharp quarterly rally, while the Dow has been supported by broader cyclical participation. The market is still willing to buy AI exposure when oil volatility fades, but the hurdle is higher now. Investors need earnings delivery, not just capex narratives, especially after June’s volatility showed how quickly AI valuation risk can spread across regions.
In Commodities Markets oil stayed on the back foot. Brent traded below $73 per barrel as the market continued to remove the Middle East risk premium after the U.S.-Iran de-escalation and improved Gulf supply expectations. The speed of the oil retreat is now a macro variable in itself. It reduces headline inflation pressure, supports consumers and gives central banks more room to pause. Gold remained under pressure as the stronger dollar and firmer risk appetite reduced demand for defensive exposure.
In Currency Markets the dollar stayed firm, especially against the yen. The yen weakened to around 162 per dollar, its lowest level in roughly four decades, as rate differentials continued to dominate intervention concerns. The dollar’s resilience shows that falling oil has not been enough to turn the market into a rate-cut story. FX is still pricing a world where U.S. inflation risk keeps the Fed cautious and Japan remains behind the curve.
In Bond Markets the rate backdrop remains the main check on equity enthusiasm. ECB officials are reassessing the urgency of further hikes after oil’s fast decline, but they are not dismissing inflation risk. Markets now see only about a one-in-three chance of a July ECB hike, while still expecting additional tightening later in the year. In the U.S., the focus remains on whether strong activity and sticky inflation keep the Fed biased toward another hike. Lower oil helps bonds, but it does not fully neutralize core inflation risk.
The Cross-Asset Read
The quarter ends with a cleaner risk setup than markets had a week ago.
Oil is lower, geopolitical risk has faded and AI leadership is back in control. That combination is enough to lift equities into quarter-end and support the strongest global equity quarter since 2020.
But the rally is not free of tension.
The first tension is rates. Lower crude reduces the inflation impulse, but central banks are still dealing with services inflation, wage pressure and second-round risk. The ECB can slow down, but it has not pivoted. The Fed is still the larger constraint for global duration and growth assets.
The second tension is concentration. AI is still carrying the equity story across the U.S., Japan, Korea, Taiwan and parts of Europe. That works while earnings revisions follow capex optimism. It becomes fragile if hardware costs, power constraints or margin pressure begin to challenge the return-on-investment story.
The third tension is FX. A yen near 162 per dollar is not just a Japan story. It is a signal that rate differentials remain powerful enough to dominate policy discomfort. If the dollar keeps rising while oil falls, global liquidity conditions are less supportive than the equity tape suggests.
The checkable flag for the next 48 hours: if Brent stays below $73 and the yen remains weaker than 160 per dollar while Nasdaq futures keep leading, the market is still treating lower oil as an AI-duration tailwind. If Nasdaq leadership fades despite cheaper oil, the issue has shifted back to valuation and rates.
Quarter-end positioning is helping the tape. The July test will be whether lower oil can keep supporting equities once central-bank and earnings risk return to the front of the screen.
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