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JUL 13, 2026 · K2 CAPITAL MANAGEMENT · 17 MIN READ

Daily Brief — July 13, 2026

Iran declared the Strait of Hormuz closed until further notice and until U.S. interference in the region ceases.

Daily Brief — Monday, July 13 2026

Iran declared the Strait of Hormuz closed until further notice and until U.S. interference in the region ceases.

Geopolitics

Iran / Hormuz↑ Escalating● Changed

  • The United States launched a third round of airstrikes this week, targeting airfields in Bushehr province and sites in Sirik, Qeshm, Bandar Abbas, Konarak, Jask, Chabahar, and Asaluyeh.
  • U.S. ground-to-ground missiles were fired from Bahrain and Kuwait toward Iran in coordination with the airstrikes.
  • Iran declared the Strait of Hormuz closed until further notice and until U.S. interference in the region ceases.
  • The IRGC Navy reported firing a warning shot at a vessel on an unapproved route and stated no vessels will be allowed to pass through the strait.
  • Reports indicate Iranian special forces deployed mines in the U.S.-backed Omani southern shipping lane.
  • Iranian state media reported over 20 explosions across southern Iran, including 12 in Bushehr province and more than 10 in Jask.
  • Oman notified the U.S. that Tehran refused to accept proposed terms regarding the Strait of Hormuz.

Current situation: The conflict has transitioned from targeted strikes to a total blockade of the Strait of Hormuz and a broad kinetic campaign involving ground-to-ground missiles, signaling a critical escalation in regional hostilities.

Russia / Ukraine↑ Escalating● Changed

  • Ukraine struck the Syzran oil refinery in Russia and multiple tankers in the Sea of Azov.
  • President Volodymyr Zelenskyy dismissed Prime Minister Yulia Svyrydenko as part of a major cabinet reshuffle and a shift in political strategy.
  • Russia began painting military trucks with black-and-white stripes to confuse the AI-powered vision systems of Ukrainian drones.
  • A media investigation identified more than 230,000 Russian soldiers killed in Ukraine.
  • Russian forces are reportedly closing in on a city significant to the Kremlin's history.
  • Four people were killed in a Ukrainian drone attack on the Russian-controlled city of Enerhodar.
  • Western allies are seeking further air-defense commitments for Ukraine during meetings in Paris to address critical shortages.

Current situation: The war is intensifying through a systemic Ukrainian campaign against Russian energy and shipping, mirrored by a Russian push for new territorial gains and a significant political restructuring within the Ukrainian government.

China / Taiwan→ Stable● Changed

  • China conducted a ballistic missile test, which observers state has increased the urgency for Pacific security deal discussions.
  • The U.S. and its allies issued a joint statement marking the 10th anniversary of the South China Sea arbitration ruling, asserting that China's maritime claims have no legal basis.
  • Beijing renewed its rejection of the arbitration ruling and criticized the joint statement.

Current situation: Military tensions remain high as China continues strategic missile signaling and rejects international legal rulings on its maritime claims, maintaining a confrontational posture toward the U.S. and its regional allies.

US Politics / Trump→ Stable● Changed

  • U.S. Senator Lindsey Graham died at age 71 on July 11 following a brief and sudden illness; emergency responders reportedly performed CPR for cardiac arrest at his home.
  • President Trump praised the late Senator Graham as a true American patriot and one of the greatest senators he had known.
  • The White House issued a statement asserting that an individual cannot be both a communist and a patriot.
  • President Trump stated he had a perfect physical examination at Walter Reed and requested an additional cognitive exam.
  • The administration extended temporary work authorization for Haitians and other protected-status immigrants.

Current situation: The administration continues its aggressive domestic agenda and populist rhetoric, while the sudden death of Senator Lindsey Graham creates a potential succession crisis and political volatility in South Carolina ahead of the midterms.

NATO / Europe→ Stable● Changed

  • Turkey is evaluating whether to join Canada's Defence, Security and Resilience Bank initiative.
  • U.S. Ambassador to NATO Whitaker stated that the U.S. should lean into its relationship with Turkey, describing the nation as a capable and integrated Western ally.
  • Ambassador Whitaker indicated that a Turkey F-35 deal will occur provided legal conditions are met.
  • The EU and Bahrain launched talks to establish a new strategic pact focused on security and trade.

Current situation: The alliance is focusing on institutional survival and the integration of key regional partners, with a specific emphasis on resolving the F-35 dispute with Turkey to solidify its eastern flank.

BRICS / Global South→ Stable● Changed

  • Former Emir of Qatar, Sheikh Hamad bin Khalifa Al Thani, died at age 74.
  • Leaders from the UAE, Jordan, Sudan, Algeria, Iraq, and Ethiopia, as well as representatives from Hamas and Hezbollah, issued condolences following the former Emir's death.
  • The UAE declared four days of mourning with flags at half-mast.
  • India rejected a quick trade agreement with the U.S., opting to hold out for more favorable terms.

Current situation: The passing of a pivotal Qatari leader has triggered widespread diplomatic mourning across the Arab and Islamic worlds, while India is leveraging its growing economic confidence to challenge U.S. trade terms.

Other Geopolitics● Changed

  • The death toll from earthquakes in Venezuela has risen to 4,490 people.
  • A pub fire in Bangkok killed at least 27 people.
  • Torrential monsoon rain in Bangladesh resulted in at least 51 deaths.
  • South Africa processed over 53,000 foreign nationals for deportation or voluntary repatriation.
  • The South Korean navy recovered the body of a seaman who went missing near the maritime border with North Korea.
  • EU foreign ministers are debating new measures to curb trade with Israeli settlements in the occupied West Bank.
  • The Mexican President is seeking legal action against the U.S. regarding the deaths of alien migrants.
  • The British government announced over $335 million in spending over three years to protect Jewish communities following antisemitic attacks.
  • Zimbabwe's President Emmerson Mnangagwa stated that a constitutional amendment extending his tenure by two years was a collective decision.
  • North Korean and Chinese premiers met to discuss expanding cooperation on the 65th anniversary of their friendship treaty.

Current situation: Global instability is marked by high-casualty natural disasters in Venezuela and Bangladesh, alongside shifting political norms in Zimbabwe and escalating legal tensions between Mexico and the U.S.

Macroeconomics

BOJ / Japan→ Neutral● Changed

  • The 10-year Japanese government bond yield fell by 16 basis points to 2.71% on Friday, marking the largest daily decline since April 2025.
  • Japan has encouraged the Government Pension Investment Fund to increase its holdings of alternative assets.
  • Japanese government bonds rose amid expectations of increased inflows into domestic securities.

Current situation: Japan is facing historic bond market volatility and struggles to prop up the yen despite spending billions in interventions.

US Economic Data↓ Deteriorating● Changed

  • AI-linked layoffs remained elevated for the third consecutive month.
  • The entry-level job market reached a 37-year low, with 13.3% of new entrants unemployed.
  • Average US home affordability has dropped to the lowest level in history, with average new home costs rising to $540,000 and mortgage rates reaching 6.5%, compared to $350,000 and 3.5% ten years ago.
  • Data indicates 49% of young adults currently live at home, up from 37% in 2019.
  • The US health department watchdog projected $5.56 billion in recoveries and savings over six months and barred 1,212 entities from federal programs.
  • Population growth prospects for the United States have been corrected downwards.
  • Prediction markets show the probability of a recession has hit its lowest point since 2022.

Current situation: While recession probabilities have dipped, the structural economy is deteriorating through a historic housing affordability crisis and a collapse in entry-level employment.

European Economic Data→ Stable

  • A digital finance shift could provide a £33 billion boost to the UK economy.
  • More than 1.2 million Canadians are working multiple jobs, approaching a record high.
  • Andy Burnham is considering a bolstered budget including land taxes and public control of utilities.

Current situation: The outlook remains stable as the recovery in earnings is balanced against emerging structural pressures in the labor market and uneven inflation.

China / EM Economic Data→ Stable

  • China has launched a new Beijing-backed mining investment vehicle to increase control over overseas resources.
  • The Chinese government is cracking down on top ratings for corporate bonds.
  • Egypt's current account deficit for January-March widened to $5.1 billion.
  • South Korea reported a 17.4% year-on-year increase in imports for July 1–10.
  • China Medical System will pay Insilico up to $177 million for nervous system research.
  • Research suggests that reducing reliance on China would cost Western nations $23 trillion.

Current situation: Regional stability is holding as China's record energy demand and credit market reforms offset the broader instability in the property sector and equity markets.

Oil / Energy Markets↑ Rising● Changed

  • Brent crude oil surged between 3% and 4.5% at the open following renewed military strikes between the U.S. and Iran.
  • The European Union has purchased a record amount of gas from Russia's flagship plant.
  • The Iraqi Prime Minister is scheduled to visit Washington on Monday to sign several oil and gas memorandums of understanding.
  • U.S. fossil fuel power investments are outpacing those of China for the first time in decades.
  • The EU is considering a 2040 electrification target to reduce dependence on oil and gas.

Current situation: Geopolitical risk premiums have aggressively returned as direct U.S.-Iran military conflict reignites fears over the Strait of Hormuz and global supply disruptions.

Gold / Metals / Commodities↓ Falling● Changed

  • Gold prices dropped over 1% and fell below $4,100 as renewed U.S.-Iran strikes raised inflation fears and expectations for higher interest rates.
  • Base metals retreated due to concerns that renewed hostilities between the U.S. and Iran will hinder global economic growth.
  • Chile's Codelco reported copper production fell 18.3% year-on-year to 106,300 tons in May.
  • Kingsgate reported a processing interruption at Plant 1 of the Chatree gold mine.

Current situation: Bullion and industrial metals are under pressure as rising energy costs and inflation risks shift investor focus away from safe-havens toward the prospect of prolonged high interest rates.

USD / FX / Currencies↑ Rising● Changed

  • The U.S. Dollar Index held above 101.00, bolstered by renewed Middle East attacks and fears of a Hormuz closure.
  • Argentina’s peso crashed to a new all-time low against the U.S. dollar.
  • The Indonesian currency hit its lowest level since June 9 at 18,110 per dollar.
  • The Chinese Central Bank fixed the Yuan midpoint lower at 6.7972 against the dollar.
  • Japan's summer outbound travel is expected to fall 9% due to the weak yen.
  • The U.S. dollar's share of global reserves has dropped to a 21st-century low.

Current situation: The U.S. dollar is regaining strength as a primary safe haven amid escalating Mideast tensions, putting significant downward pressure on Asian and emerging market currencies.

US Fiscal / Debt / Credit↓ Deteriorating● Changed

  • U.S. margin debt as a share of M2 money supply reached 6.2% in May, nearing the 6.3% record set during the dot-com bubble.
  • U.S. household equity holdings have reached a record $72 trillion, which is 33% above the long-term trend.
  • Total investments in U.S. listed ETFs have surpassed $15.6 trillion.

Current situation: Fiscal and credit stress is intensifying as systemic leverage reaches historic bubble levels and record equity exposure increases household vulnerability.

Markets

US Indices↓ Risk-off● Changed

  • US stock futures opened slightly lower following Iran's declaration that the Strait of Hormuz is closed.
  • S&P 500, Nasdaq 100, and Dow Jones futures declined by 0.1% to 0.3% at the open.
  • The gap between individual stock volatility in the S&P 500 and the VIX has reached a record 34 points.
  • WTI Crude prices rose by 3.0% in response to the geopolitical escalation.

Current situation: The precarious balance of the market has shifted toward a risk-off posture as the closure of the Strait of Hormuz triggers immediate volatility and energy price spikes.

European / Asian Indices↓ Risk-off● Changed

  • South Korea's KOSPI plunged 8%, triggering a market-wide trading halt and erasing over ₩213.5 trillion ($150 billion) in value within one hour.
  • Japanese stocks saw over ¥27.17 trillion ($170 billion) in market value erased.
  • European equity futures declined, with the DAX falling 0.7% and the Euro Stoxx 50 down 0.6%.
  • Foreign stocks have outperformed US stocks for 70 consecutive weeks.

Current situation: The previous risk-on surge in Asia has collapsed into a severe sell-off, characterized by historic value erasures in Japan and South Korea following US-Iran strikes.

AI Chips / Semiconductors→ Neutral● Changed

  • Samsung Electronics is accelerating the opening of its first Yongin chip plant to 2029, moving the date up by one to two years.
  • Nvidia, Micron, Broadcom, and Applied Materials are projected to generate a combined record free cash flow of $430 billion over the next 12 months.
  • SK Hynix reported 2Q26 operating profit of KRW 60.4 trillion, which is 61% higher quarter-on-quarter but 8% below consensus estimates.
  • SK Hynix shares dropped as much as 8.2% in Seoul following its US Nasdaq debut.
  • TSMC plans to add two advanced chip packaging plants in Chiayi, Taiwan.
  • US semiconductor imports reached a new record high as a percentage of GDP.

Current situation: While long-term infrastructure expansion and cash flow projections remain robust, the sector is experiencing short-term instability as investors book profits and react to earnings misses.

Big Tech→ Neutral● Changed

  • The AI data center boom has doubled Big Tech debt to $350 billion over the last five years.
  • EU officials indicated that Big Tech companies will face fines for consumer protection failures.
  • Instagram is planning to implement charges for advanced AI access.
  • iPhone 17 is reportedly running out of stock in India due to consumer fears of future price hikes.

Current situation: Strong consumer demand for hardware is offset by mounting debt burdens and increasing regulatory pressure from the European Union.

AI Companies↓ Risk-off● Changed

  • Elon Musk accused OpenAI CEO Sam Altman of stealing Apple's phone technology and abandoning the organization's AI charity mission.
  • OpenAI's consumer device may launch as early as February 2027, though legal disputes with Apple could disrupt the timeline.
  • Elon Musk announced that SpaceX will begin launching space-based data centers as early as next year.
  • Tata Consultancy Services plans to employ up to 8,900 AI deployment engineers and is seeking AI acquisitions.
  • Shares of Chinese AI model maker MiniMax plunged after JPMorgan slashed its price target for the second time in a week.
  • A Verasight survey found that 69% of Americans support forcing AI firms to transfer 50% of their stock to a public sovereign wealth fund.

Current situation: The risk-off trajectory is intensifying as high-profile accusations of corporate theft and legal battles over hardware disrupt the transition from software to consumer devices.

Defense / Aerospace→ Neutral● Changed

  • A next-generation ramjet fuel propulsion system for future offensive and defensive missions has undergone testing.
  • Reports indicate that the account of President Trump purchased Lockheed Martin shares after stating in March that the Iran conflict was easing, occurring as the Pentagon sought to replenish THAAD missile stockpiles.
  • Chinese aviation and defense stocks declined by more than 4% amid a broad market sell-off.
  • Global powers are investing billions of dollars into orbital military power projection, with warnings that Europe is at risk of falling behind.

Current situation: Technical advancements in propulsion and orbital capabilities continue, while geopolitical volatility is creating sharp fluctuations in Asian defense equities and scrutiny over U.S. industrial procurement.

Financials / Banks↓ Risk-off● Changed

  • The five largest U.S. investment banks—JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup—are forecast to report $11.1 billion in fees, the highest level since 2021.
  • Deutsche Bank and UniCredit have filed lawsuits against Linde regarding losses tied to Russia sanctions.
  • Five major commercial banks in South Korea have exhausted over 85% of their annual household loan growth limits.
  • Japan is encouraging its national pension fund to increase investments in alternative assets, while younger citizens are increasing NISA account usage due to inflation.
  • HDFC Bank reduced its workforce by 3,343 employees in the financial year ending March to accelerate automation.
  • China is pressing rating agencies to limit top-tier ratings for high-cost, risky borrowers.
  • Capital Group, BlackRock, Fidelity, and Goldman Sachs participated in the anchor book for SBI Funds, which was oversubscribed more than 20 times.

Current situation: Despite record-high fee projections for major U.S. banks, systemic risks are emerging as South Korean lending limits are reached and European banks litigate sanctions-related losses.

Earnings / Corporate● Changed

  • Nippon Paint has made multiple offers to acquire Akzo Nobel's decorative paints business, with the latest bid valuing the unit at €7.5 billion.
  • Ford and the Canadian union Unifor reached a tentative national labor contract, averting a potential dispute.
  • Volkswagen management is planning to reduce its model lineup and cut capacity, though the CEO stated there are solutions to save money other than shutting factories.
  • Mastercard is examining the potential sale of its UK payments subsidiary, Vocalink.
  • Wall Street is reporting significant fee gains from the SpaceX IPO and various mega-mergers.
  • Fonterra is seeking regulatory approval to become the sole owner of the Whareroa plant's co-generator after acquiring Nova Energy's 50% stake.
  • Seven & i Holdings is considering selling a stake to SoftBank and PayPay.

Current situation: Corporate activity is dominated by high-value strategic acquisitions and labor negotiations, with significant shifts in the automotive and chemical sectors.

Nuclear / Energy Transition↑ Risk-on● Changed

  • Bangladesh is testing the viability of atomic power for developing economies via its first nuclear plant.
  • Fervo Drilling reported a 143% increase in drilling rates, and Quaise raised $134 million for geothermal development.
  • High electricity bills are driving a rooftop solar boom in the Philippines, supported by low-cost Chinese technology.
  • Holtec has further delayed the restart of the Palisades nuclear plant following dismissed lawsuits and Department of Energy support.

Current situation: The transition is diversifying as geothermal efficiency spikes and developing nations like Bangladesh and the Philippines adopt nuclear and solar solutions to combat energy costs.

Bonds / Yields↓ Risk-off● Changed

  • The U.S. Treasury two-year yield climbed to its highest level in over 16 months as U.S. strikes on Iran drove up oil prices and fueled expectations of Federal Reserve policy tightening.
  • Global fund selling of South Korean bonds has reached a nearly three-month high.
  • Goldman Sachs analysts suggest the "window is shut" for funding another $360 billion in hyperscaler debt over the next 12 months, signaling a potential bubble in AI-related debt.

Current situation: Downward pressure has shifted into an active sell-off across several markets, with geopolitical shocks in the Middle East driving yields higher and credit concerns mounting for AI infrastructure debt.

Crypto

Bitcoin→ Neutral● Changed

  • Bitcoin is trading at 63,868.00, reflecting a decrease of 0.77%.
  • A son of Donald Trump reportedly lost approximately 600 million from the family fortune following a major bet on Bitcoin.
  • Michael Saylor indicated that he intends to purchase more Bitcoin.

Current situation: Price action remains muted amid mixed signals from high-profile holders, characterized by significant losses for the Trump family and continued accumulation intent from Michael Saylor.

Altcoins / DeFi↑ Bullish● Changed

  • The Robinhood Chain has attracted over 290 million in stablecoins and 134 million in total value locked since its launch.
  • Robinhood Chain has recorded 12 million in real-world assets and 4 billion in cumulative decentralized exchange volume.
  • Several altcoins saw price declines, including Dogecoin at 0.0730 (-2.8%), Stellar at 0.1860 (-3.18%), and Litecoin at 44.55 (-1.89%).

Current situation: While broad altcoin prices are retreating, the underlying institutional integration continues to accelerate as the Robinhood Chain records significant growth in stablecoin inflows and DEX volume.

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