com Asia Market Update: Similar to Q2, Kospi volatility continues to drive markets, while Iran is still uncertain; Meanwhile macro data has
***General Trend and Developments*** -Overall Asian equities are again directionless ahead of the upcoming US-related events. Cautious start to the new quarter? - Disappointing PMIs seen throughout Asia [including China, Indonesia, Japan, South Korea, Taiwan, Vietnam]. The Chinese data was hurt by new export orders. -South Korea’s Jun chip exports accelerated further during the last few days of the month - The BOJ’s Q2 Tankan survey generally beat market ests, supported by large manufacturers. That being said, the BOJ suggested that the data could have been even stronger. This is the case because most firms replied before the US-Iran peace deal on June 15th. Ahead of the data, the markets were only pricing in a marginal chance of a BOJ rate hike in late Jul. -The Yen remains at 40-year lows to begin the new quarter. Reticence, however, was seen among JP officials before the recent comments from Mimura. Can we interpret this silence as inaction or vigilance with regards to possible FX intervention, especially with the upcoming US jobs report [Thurs] and holiday [Friday]? US Jun ADP employment data is due on Wed. -JGBs trade mixed. 10-year yields rise ahead of the bond auction.
***General Trend and Developments*** -Overall Asian equities are again directionless ahead of the upcoming US-related events. Cautious start to the new quarter? - Disappointing PMIs seen throughout Asia [including China, Indonesia, Japan, South Korea, Taiwan, Vietnam]. The Chinese data was hurt by new export orders.
-South Korea’s Jun chip exports accelerated further during the last few days of the month - The BOJ’s Q2 Tankan survey generally beat market ests, supported by large manufacturers. That being said, the BOJ suggested that the data could have been even stronger. This is the case because most firms replied before the US-Iran peace deal on June 15th. Ahead of the data, the markets were only pricing in a marginal chance of a BOJ rate hike in late Jul.
-The Yen remains at 40-year lows to begin the new quarter. Reticence, however, was seen among JP officials before the recent comments from Mimura. Can we interpret this silence as inaction or vigilance with regards to possible FX intervention, especially with the upcoming US jobs report [Thurs] and holiday [Friday]? US Jun ADP employment data is due on Wed.
-JGBs trade mixed. 10-year yields rise ahead of the bond auction results on Jul 2nd -An unnamed US official characterized the US /Iran talks as positive, as ships are transiting the Strait of Hormuz at ‘higher’ levels. According to Iran, dialogue with mediator Qatar on the implementation of the interim deal with the US, including the release of frozen assets, is likely to be on Wed [July 1st in Doha]. Trump is said to be okay with the talks going beyond the Aug 18th deadline (WSJ) -Headlines related to the US/China tech war continue to appear.
The Trump administration is said to be drafting a ban on imports of foreign energy inverters [the equipment that connects solar projects and batteries to the grid], according to a recent press report. Shares of Chinese co. CN] have declined by >13%. -Certain Chinese EV companies again report stronger sales in Jun m/m [Nio, XPENG].
Li Auto lags. BYD sales figures also in focus. -Macau Jun Casino Revs miss ests -Mexico wants the USMCA to be extended for 16 years. July 1st is the deadline to renew the trade agreement.
S. 8 prior (7th month of expansion) -(K