Asian Market Update: Iranian tensions unsettle crude markets - Iranian tensions unsettle crude markets: Crude oil spiked higher by more than $5 in 7 minutes to trade above the $68 in Asian trading on a rumored naval confrontation between U.S. and Iranian forces in the Persian Gulf. The U.S. Navy and White House were quick to dismiss the rumors. The BBC is reporting that the UK government is preparing to release photographic evidence to support its assertion that 15 UK sailors seized by Iran were not in Iranian waters. Oil prices have now settled around $63.80. - Forex: The CHF gained on safe-haven flows after the rumored naval incident between the U.S. and Iran, and managed to hold on to gains. The USD/CHF medium term outlook remains bearish with USD/CHF staying below both 55 days EMA and 55 weeks EMA. The JPY firmed across the board on a combination of factors. Japanese firms repatriated funds ahead of the fiscal year end and traders sold high yielding currencies ahead of Bernanke's testimony. Some analysts have suggested that if Bernanke says something to cause investors to get more nervous we could see a general unwinding of carry trades. The NZD was the big loser in Asia, with many saying that the NZD looks expensive. It seems that New Zealand's upbeat fundamental outlook is already priced into the currency as NZD/USD traded lower by 0.33%. The KRW traded lower as South Korean companies paid dividends to foreign shareholders, but KRW losses were contained after strong trade balance data (KS Feb Current Account: $492M v -$428M prior) - Asian equities were expected to trade down sharply on renewed U.S. housing concerns, but losses were contained ahead of Bernanke's testimony. Asian ADRs posted their biggest fall in 2 weeks during today's U.S. session, but low trading volume and a lack of willing market participants blunted the impact of poor leads overnight from U.S. market. Gains on the Nikkei are being driven by shares of consumer lenders, real estate companies and energy shares. Shares of Sanyo are trading higher on potential managerial changes, while shares of Oracle Japan are trading higher following its earnings report. Declines on the Nikkei 225 are being led by shares of exporters, as the USD/JPY pair is gaining sharply in Asian trading. The Kospi is lower as gains in shares of Korea Exchange Bank were offset by losses in exporters. The ASX200 index is being led higher by shares of mining and energy companies. Chinese equities are currently in negative territory in a volatile trading session. If Chinese equities closed in the red it would be for the first time in the past 8 sessions. The Hang Seng index is lower by more than 0.25%, trading lower for the second consecutive session, with cautious trading ahead of the settlement of March futures tomorrow. - Commodities: After the rumors of a naval confrontation between the U.S. and Iran were dismissed, crude oil settled around $63.80 and stayed in a tight range for the rest of the Asian session. Crude oil is higher for the 7th consecutive session going into weekly US inventory data tomorrow. Spot gold tracked the movements in oil markets and is currently higher by more than 0.45% and holding above the $672 level. Central bank sales of gold are reported to have been higher recently, but given the geopolitical tensions and higher oil prices analysts see further upside for gold. Shanghai copper is currently lower by more than 1.3% tracking earlier declines in the LME contract on concerns over the U.S. housing market. On the LME copper chart, a break down through $6,700 will be a sign of a secondary top forming, with continued weakness targeting $6,550.