SpaceX, GOOG Weigh on Tech

***General Trend and Developments*** - -SpaceX (bond issuance) and Google (top AI talent leaving) led tech weakness during the US session, with the Nasdaq down -1.3%, which continued into the Asia session with the tech index down a further -1.3%. - -Gold, Silver, Bitcoin all joined US equity FUTs in unwinding all of yesterday's gains after Monday's US-Iran rally following the progress in Switzerland, even as WTI crude FUTs held its lows ~$73/bbl. - -Currencies also weaker, with even recent steady performer the Aussie falling below 70c, its lowest since April 8th - -Volatility weighing on Korean assets? (See analysis further below). - -No developments fresh developments on Iran, but with the majority of inbound vessels disabling transponders ships and actively "going dark", tracking of ships and oil through the Strait of Hormuz is challenging. - -Note that MSCI is due to decide as soon as tomorrow whether to downgrade Indonesia to a 'frontier market' status or retain current 'emerging market' status - a threat that has been weighing over the Indonesia bourse and currency since MSCI's warning in January of this year. - **Kospi again volatile, down as much as -6% today, with several factors weighing on the market even as the Kospi 200 has rocketed from ~2.5K to >9K in just 15 months. - -South Korea’s chip giants are finally expected to disclose their domestic investment plans on Jun 25th [Thursday].

Previously, both Hynix and Samsung have pledged to pursue hundreds of trillions of Korean Won in local investments over multiple years. - -The recent Korea govt proclamations on potential AI windfall profits and ongoing labor concerns may also be factors.

Korea MOF today again warned on the “excessive” weakness of the Korean Won (KRW). - -Further, with SpaceX down another 16% and closing at $155,the stock is now below the lowest market price seen on its IPO day.

South Korean (along with Japanese) investors took a large amount of the Space X IPO private placement. - -South Korea’s $350B US investment pledge as part of its US trade deal continues to be overhang for the markets. - -President Trump announced an Executive Order targeting September, 2028 for a US-built research-grade quantum computer, as the Trump Admin aims to accelerate the overhaul of US cyber defense and likely setting up the next frontier in the global tech wars with China.

The announcement was aspirational, with no fresh announcement of investment. (Reminder on May 21st the Trump Admin awarded $2B from the CHIPS Act to nine US quantum computing companies).

One of the US quantum startups, Infleqtion, welcomed the order, reiterating the importance of the US winning the competition to turn quantum computing from experimental technologies and proof of concepts into scalable computing that can replace classical (bit) computing. - -Comes as China and the US engage in tit-for-tat recently on technology export lists and domestic high-tech subsidies amid warnings from the Pentagon last year that China is accelerating quantum technology as a 'key' to future warfare, harnessing companies such as Alibaba Quantum, Baidu Quantum, Huawei HiQ, alongside specialized firms such as Origin Quantum, Ciqtek, and SpinQ. - -Note that the Japanese Yen briefly spiked higher during NY morning, threatening to pierce the 2024 lows of 162 before rising sharply by 80 pips in just two or three minutes to 161.10, then falling again to near 162 before settling around 161.50.

Japan Fin Min Katayama confirmed holding a one-hour call with US Treasury Sec Bessent to discuss the Yen, but again refused to be drawn on specifics, reaffirming that Japan-US have a preexisting agreement on taking decisive FX steps when needed. - -Traders remain worried about high input costs as the Yen hovers near 40 year lows likely not happy to see Japanese input costs rise at their sharpest since 2022 as per Japan’s June prelim PMI’s today.

Steeper increases in new orders were seen across both the manufacturing and service sectors but analysts continue to doubt the PMI figures due to the war and stockpiling impact.

For the record, Japan prelim Manufacturing PMI rose for a 6th month of expansion, while the PMI Services also held its 19th month of expansion. - -Australia prelim PMIs saw manufacturing improve for its third month of expansion, although Services remained a touch negative for a second month. - - Japan govt said to be aiming to "guide" 40% of household assets into stocks, investment trusts and bonds by 2040 (currently around 23%). - -US equity FUTs -0.1% to +0.1% during Asia trading - - *** Looking ahead (Asian-weighted focus, using Asian time zone)*** - -Tue Jun 23rd: (Tue night, European and US Jun Prelim S&P PMIs ) - -Wed Jun 24th: AU May CPI, JP BoJ Summary of Opinions, TH Rate Decision, (Wed night, US May Final New Home Sales) - -Thu Jun 25th: AU May Jobs, US Fed Bank Stress Test Results, US May Core PCE - -Fri Jun 26th: JP Jun Tokyo CPI, - - *** Holidays in Asia this week*** - -Fri Jun 26th: India - - ***Headlines/Economic Data*** - Australia/New Zealand - -(AU) ASX 200 opens +0.2% at 8,826 - -(AU) Australia Jun Preliminary PMI Manufacturing: 51.2 v 50.7 prior (3rd month of expansion) - -(AU) Australia Greens party to support amended Australia tax package as regards property - Statement - -(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 72.8 v 70.7 prior - - China/Hong Kong - -(CN) Shanghai Composite opens -0.2% at 4,154; (HK) Hang Seng opens +0.1% at 23,800 - -(CN) World Economic Forum China ("Summer Davos") conference: Hyperscaler/AI infrastructure capex expected to exceed $820B in 2026, with cited outlays of Amazon ~$200B, Alphabet ~$190B and Microsoft ~$190B; including buybacks and related spend, the figure was framed as approaching ~$1T this year and on a multi-trillion-dollar path. - -(CN) China Summer Davos Comments [being held Jun 23-25th]: Peking University/PBOC Adviser Huang Yiping: [Reiterates] China need to boost consumption in more aggressive