US indices snapped a 3-day long streak and finished yesterday’s trading lower. S&P 500 moved 0.28% lower, Dow Jones dropped 0.14% and Nasdaq finished 0.18% lower. Russell 2000 dropped 0.10%

Moods during the Asian session were downbeat. Nikkei dropped 1.5%, Kospi moved 0.6% lower and S&P/ASX 200 traded flat. Chinese indices were plunging 1.5-2.6%

DAX futures point to a lower opening of the European cash session today

Tensions between US and China are on the rise after it was confirmed US Speaker Pelosi will arrive in Taiwan this afternoon

China said it will conduct military drills in the South China Sea. Some media reports also surfaced saying that 2 out of 3 aircraft Chinese carriers are heading towards Strait of Taiwan

Taiwan said that it will strengthen its combat readiness through Thursday

China banned imports from over 100 Taiwanese food factories, suggesting that China may stick to its previous playbook and punish US allies for US actions

The Reserve Bank of Australia delivered a 50 basis point rate hike, in-line with market expectations. RBA repeated that it expects inflation to peak this year and move back to 2-3% range in 2023. AUD dropped as RBA statement hinted there is no “pre-set path” to rate hikes

US President Biden said that Ayman Al-Zawahiri, Al-Qaeda leader, has been killed in a drone strike in Kabul, Afghanistan over the weekend. Al-Zawahiri was considered one of key planners of September 11 attacks

Fox News reported that Saudi Arabia will push for oil output increase at OPEC meeting this week

Australian building approvals dropped 0.7% MoM in June (exp. -5.2% MoM)

Cryptocurrencies are pulling back amid broad risk-off moods. Bitcoin trades 0.5% lower while Ethereum drops 2.4%. Moonbeam slumps 15%

Energy commodities drop. Brent and WTI trade around 1.0-1.2% lower at press time

Precious metals trade mixed – platinum gains, gold trades flat while palladium and silver drop

JPY and EUR are the best performing major currencies while AUD and NZD lag the most

AUDUSD is pulling back amid lack of hawkish message from RBA and increase in China-US tensions. Pair pulls back from the resistance zone marked with a 38.2% retracement of a recent downward impulse.