Another Middle East skirmish reported but ceasefire appears to still be intact

Asia market update: Weaker Samsung Q2 prelim Revs weigh on chip names; Close RBNZ decision expected on Wed; Another Middle East skirmish reported but ceasefire appears to still be intact.

General trend and developments

-Although Samsung’s detailed Q2 earnings will not be released until late Jul [Jul 30th], the weaker prelim Revs appear to have unsettled traders, at least initially. The co’s shares have lost over 9% on today’s session. This weakness has negatively impacted other chip-related names [including Micron, Advantest and Tokyo Electron]. The South Korean chip giant’s profits were likely supported by the ongoing memory chip crunch, which has resulted in massive gains for chip prices. Recall on the pricing front, Samsung is said to raise DRAM prices by up to 20% in Q3 q/q [financial press article from Jul 3rd].

-Meanwhile, headlines related to Hynix’s upcoming NY ADR listing continue to appear. The chipmaker is planning to raise KRW43T in the ADR listing. The fundraising target was reduced due to the recent decline in the co’s share price. Nonetheless, prior reports have suggested that the money flows linked to the IPO could be supportive for the Korean Won (KRW).

- Separately, amid the correlations between global equity markets, the hedge fund of former OpenAI researcher 'bets' on SK Hynix US IPO, according to the FT. Incidentally, in early Q3, there have been indications that South Korean equity markets have been at least partially driving global equity market volatility. Recall prior reporting related to the involvement of South Korean investors in shares of SpaceX.

-Mixed results were also seen from LG Energy, while LG Electronics reported higher prelim results y/y.

-Demand rebounds at 30-year JGB auction after the Jun BOJ rate hike announcement. In mid-Jun, the BOJ also announced its plan to pause the bond taper from Apr 2027. This could have, perhaps, supported today’s auction amid the higher yield offered by the MOF, as there had been prior concerns about the BOJ falling behind the curve on rates.

-Market focus now shifts to Japan’s economic blueprint which is due to be released at some point in July.

- Incidentally, Japanese officials continue to affirm the independence of the BOJ amid prior press speculation [recall from Jun 24th: Japan Government will call for 'appropriate monetary policy supporting demand' in economic blueprint; Government to urge BOJ to align decisions with its focus on growth; PM Takaichi to finalise her first blueprint in July - draft paper seen by US financial press].

-Previously, Japan govt panelist economist Toshihiro Nagahama said the BOJ should continue to raise rates at moderate pace [comments from Jul 2nd].
Japan May wage growth slowed on special payments.

-PBOC announced plans to increase the Southbound Bond Connect quota to CNY800B from CNY500B [comments at the Hong Kong FIC and Bond Connect Summit].

-Philippine core CPI remained sticky in Jun, but the headline figure continued to ease .Perhaps, BSP’s prior monetary tightening needs to further work through the economy. Future rate decisions are expected to be data dependent, according to the Philippines Central Bank.

-Rabobank sees the NZD as ‘vulnerable’ if the RBNZ softens tone; Prior reports have suggested that Wed’s RBNZ decision could be another close call.

-The NATO Summit in Turkey is among the focal points for Tues-Wed. [Reminder from Jul 5th: Kremlin spokesperson said Trump and Putin spoke for 85 mins on Saturday; Trump offered to reach a settlement in Ukraine ahead of NATO summit in Turkey].

-US equity FUTs -1.2% to -0.3% during Asia trading.

Looking ahead (Asian-weighted focus, using Asian time zone)

-Mon July 6th: (Mon night, US Jun S&P/ISM.

-Tue July 7th: JP 30-Year JGB Auction, UK BoE MPC Meeting Minutes, (Tue night, US May Trade Balance).

-Wed July 8th: KR May Current Account, JP May Current Account, RBNZ Rate Decision, (Wed night, US 10-Year Note Auction, US FOMC Meeting Minutes).

-Thu July 9th: CN Jun CPI/PPI, JP 5-Year JGB Auction, MY Rate Decision, (Wed night, EU ECB Meeting Minutes, US Jun Existing Home Sales).

-Fri July 10th: JP Jun PPI, US IEA Monthly Report (Fri night, US WASDE Report, RU Jun CPI).

Holidays in Asia this week

-Fri July 10th: New Zealand.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens -0.1% at 8,819.

-(NZ) Rabobank sees the NZD as ‘vulnerable’ if the RBNZ softens tone - Press.

-(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 74.7 v 75.9 prior.

-(NZ) NZ DMO releases weekly bill auction results, the next RBNZ rate decision in Wed.

China/Hong Kong

-(CN) Shanghai Composite opens -0.5% at 4,019; (HK) Hang Seng opens -0.2% at 23,568.

-(CN) China PBOC Gov Pan Gongsheng: Affirms Monetary policy maintains a supportive stance; Increasing Southbound bond connect quota to CNY800B (vs. CNY500B prior); To keep increasing China's FX reserves allocation in Hong Kong - HK Fic & Bond Connect Summit.

-(HK) 388.HK Hong Kong Chief Executive: Confirms the launch of central clearing system for gold with the Shanghai Gold Exchange - HK Fic & Bond Connect Summit (as expected).

-(HK) HSBC Halted lending to riskier private credit clients, cites recent high-profile bankruptcies; Barclays declined to comment on the article - FT.

-(CN) World Bank [on China]: Growth is expected to ease further to 4.3% in 2027, as progress in rebalancing economy toward consumption remains gradual [note: becomes the latest to forecast that China will miss its 4.5-5.0% 2026 GDP growth forecast].

-(CN) China's Coast Guard: Says it 'lawfully expelled' Japanese vessel near Senkaku islands.

-(CN) China's Guangxi flooding leaves 4 dead, 8 missing in Hengzhou - CCTV.

-(CN) China's Gansu landslide reports 33 people remaining trapped, 17 people rescued - State Media.

-(CN) China's President Xi calls for stronger disaster relief measures; Issues instructions on flood control - CCTV.

-(CN) Hearing the ‘Big 3’ China airlines cut at large US brokerage firm; cites soft demand [including domestic RPK growth trends] – US financial press.

-(CN) China Foreign Min: Foreign Min Wang Yi met with Norway counterpart to discuss bilateral cooperation and international issues.

-(CN) Follow-up: China COFCO books at least 6 soybean cargos from the US [recall Trump had visited Beijing back in May] – US financial press.

-(CN) China PBOC sets the yuan mid-point at 6.8054 v 6.8066 prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day Reverse Repos; Net drains CNY60B v drains CNY151B prior.

-(HK) 2513.HK Shareholders approve proposed A-share offering at AGM on June 22nd, 2026 [issues clarification statement about speculated multi-billion dollar stock offering in HK].

-(HK) 002475.CN Follow Up: HK IPO said to be 3.8x oversubscribed - financial press [update].

Japan

-(JP) Nikkei 225 opens -0.4% at 69,460.

-(JP) Japan May Labor Cash Earnings Y/Y: 3.2% v 3.4%e; Japan May Household Spending Y/Y: -0.4% v -2.3%e.

-(JP) Japan sells ¥600B vs. ¥600B indicated in 30-year JGB bonds; Avg yield: 3.9930% v 3.8600% prior; Bid-to-cover: 4.55x v 2.94x prior (strongest bid-to-cover ratio since May, 2019).

-(JP) Japan Econ Min Kiuchi: Reports government aims to keep rates low not true; Government blueprint's reference to monetary policy is no different from it's previous approach; Japan is not loosening fiscal discipline, rather showing in verifiable form in economic blueprint.

-(JP) Japan's military buildup and overseas agression are reality, not hypothetical - KCNA commentary.

-(JP) According to former Japan FX official the Yen may be undervalued by up to 20% - financial press [update].

-(JP) Follow up: Two Japanese-owned supertankers carrying Saudi oil heading for Strait of Hormuz to exit Gulf - Data.

-(JP) TM Toyota Motor North America announces $3.6B expansion of its San Antonio, Texas manufacturing campus, adding a second vehicle assembly line to support Toyota Tacoma production; Will generate ~2.0K jobs [US market close].

-(JP) Follow Up: Shizuoka (Japan) Gov said to approve the start for the Maglev project (as expected) - Japanese press.

Korea

-(KR) Kospi opens -1.6% at 7,919.

-(KR) 005930.KR Reports prelim Q2 (KRW) Op 89.40T v 84.3Te (vs 4.60T y/y), Rev 171.0T v 172.2Te (v 74.0T y/y).

-(KR) 005930.KR Follow up: Shares extend losses to -10% following preliminary Q2 earnings results; this move has triggered a circuit breaker for the Kospi index which has dropped by >8%, programme trading has been halted for 20 minutes.

-(KR) Dollar-Won FX transactions related to the SK Hynix ADR-listing are expected to occur around 15th July, 2026 [note: this could be a possible tailwind for the KRW as suggested by prior press report].

-(KR) Korea Exchange activates sidecar to halt Kospi program selling after Kospi FUTs falls more than 5%, programme trading halted for 5 minutes.

-(KR) 066570.KR Reports prelim Q2 (KRW) Op 1.58T v 1.05Te (vs 0.64T y/y), Rev 23.8T v 22.8Te (vs 20.7T y/y).

Other Asia

-(PH) Philippines Jun CPI M/M: -0.3% v -0.1%e; Y/Y: 6.4% v 6.5%e.

-(PH) Philippine Central Bank: Reiterates stance that inflationary pressures remain strong - comments following June CPI data.

-(ID) Indonesia Jun Foreign Reserves: $145.6B v $144.9B prior.

-(MY) Malaysia PM Anwar: To waive penalties for voluntary E-invoice corrections until December 31st, 2027 - speaking in Parliament.

-(TH) TMBA [local bond association]: H1 Thailand Corporate Bond sales at THB409.7B, +2.7% y/y.

North America

-(US) State Department: China launches nuclear capable ballistic missile into Pacific Ocean; We continue to urge China to engage in meaningful arms control discussions - Statement.

-(US) Jun Final S&P Services PMI: 51.2 v 51.3 prelim (confirms 3rd month of expansion) [US market close].

-(US) Jun ISM Services Index: 54.0 v 54.0e; New Orders Index: 55.1 v 56.8e [US market close].

-(US) Fed's Waller (voter): Forward guidance can be problematic; Best not use it at all [US market close].

-(US) President Trump: When congress returns, we must pass reconciliation 3.0, with $350B for defense, plus Save America Act! - post on Truth Social.

-(US) Maine Democratic Party calls on troubled Senate candidate Platner to withdraw from the race.

-(US) WMT (US) Pres. Trump: Announces that Walmart is lowering prices at 'his request,' including a ~15% drop on 1lb of ground beef, among other products [US market close].

-(US) NVDA 'Our roadmap is intact' - company statement following report of potential Kyber delays [US market close].

-(US) MSTR Sells 3,588 BTC for $216M; Holds 843,775 BTC as of July 5th - filing [US market close].

-(US) FISV JPMorgan, BOFA, and other banks held preliminary talks for acquisition of Fiserv's network - WSJ.

-(CA) Canada Jun Services PMI: 47.1 v 50.6 prior (moves back into contraction) [US market close].

-(CA) Bank of Canada (BOC) Q2 Overall Business Outlook Survey: -0.4 v -0.4 prior [US market close].

-(MX) Mexico Pres Sheinbaum: Nubank will invest $4.2B in Mexico from 2026-2030.

-(CU) Antilles Gold [AAU.AU] issues update on US Sanction of Cuba Joint Venture Mining Company.

-(PE) Peru President-Elect Fujimori taps Julio Verde to stay on as Central Bank Chief.

Europe

-(RU) Several Ukrainian drones reportedly managed to reach Omsk (~2500km from frontline) for the 1st time and hit Omsk Oil Refinery - press [**TTN Note: Omsk Oil Refinery (425Kbpd) widely described as Russia’s largest refinery and one of the last top Russian refineries not yet heavily hit by Ukraine’s campaign] [EU market close].

-(RU) Trump: I think Putin feels pressure to end the Ukraine war; We are getting closer than people realize on resolving Ukraine war; Will talk about it at NATO summit - press Q&A [US market close].

-(DK) MAERSKB.DK*Makes structural changes to AE15 Gemini service; Service shifts to trans-Suez route instead of Cape of Good Hope; Decision follows Red Sea security assessments and marks gradual return to Suez corridor. [EU market close].

-(EU) ECB's Wunsch (Belgium): Seems Iran shock has disappeared [EU market close].

-(PL) Poland Defense Min Kosiniak: U.S to resume troops rotation in the country [EU market close].

-(IE) Ireland Jun Unemployment Rate: 5.0% v 4.9% prior [EU market close].

-(DE) Germany plans emergency gas reserve for up to €1.5B plus running costs - Sources.

-(UK) Andy Burnham rules out splitting the UK's treasury into a 'finance ministry, charged with maintaining economic stability, and a separate economics ministry' - FT.

-(NL) Netherlands Jun CPI M/M: -0.6% v +0.1% prior; Y/Y (final) : 2.9% v 2.9% prelim.

-(ZA) South Africa Treasury withhold funds from 69 municipalities including Johannesburg.

Middle East

-(IR) Follow Up: Iran fired at least two missiles at vessels in the Strait of Hormuz on Monday night, 6th July 2026 - Axios [citing US official]; Follow Up: Qatar LNG tanker Al Rekayyat said to be the ship hit near the Strait of Hormuz - Press.

-(IL) Israel Central Bank (BOI) cuts base rate by 25bps to 3.50%; As expected [EU market close].

-(IL) Israel PM Netanyahu: Trump and I see eye to eye on many things; Our relationship is fine [EU market close].

-(SA) ARAMCO.SA Aramco’s August Arab Light OSP to Asia was cut by $11/bbl to -$1.50 vs Oman/Dubai, a much deeper move than the roughly $8/bbl cut traders had expected - press [US market close].

Levels as of 01:20 ET

Nikkei 225 -2.1%; ASX 200 -0.5%; Hang Seng -0.6%; Shanghai Composite -1.5%; Kospi -7.4%.

Equity S&P500 Futures -0.3%; Nasdaq100 -1.2%; DAX -0.4%; FTSE100 -0.1%.

EUR 1.1449-1.1430; JPY 162.18-161.68; AUD 0.6961-0.6935; NZD 0.5707-0.5688.

Gold -1.0% at $4,123/oz; BTC -0.3% at $62,915; WTI Crude Oil +0.8% at $69.11/bbl; Copper -1.0% at $6.1883/lbs.