Eco data generally ignored – US/CN talks of more interest

Asia market update: Eco data generally ignored; US/CN talks of more interest; Financial media tries to shift attention to LA.

General trend

- Trump: We are 'very far advanced' on a China deal ahead of high level talks on Monday; China deal is complex but will bring in a lot of money.

-Trade-sensitive names rise.

- Asian equities rise; US FUTs lag.

- China Rare Earth Holdings [769.HK]: Rises by >46% [Reminder: Jun 6th: (CN) Reportedly China grants export licenses to rare earth suppliers of top three US automakers; Licenses valid for six months – press].

- HK TECH index also outperforms.

- Japan 30-year JGB yield rises by 4.5bps to 2.92%, tracks recent gain in UST yields from Fri.

- USD/JPY remains below ¥145; CNH quiet ahead of talks.

- CFTC Japanese Net long positions continued pulling back from their record ~179K contacts as at Apr 29th, now down to ~151K contracts Net long as at Jun 3rd.

- Reports that Japan’s BOJ is considering cutting its quarterly bond buying plan to range ¥200B to ¥400B [currently ¥400B per quarter] through March 2027 [current plan scheduled to end March 2026); Arguments for include mitigating yield pressure vs those against include improving market functioning. No official decision has been confirmed, with discussions set for the BOJ's June 17, 2025, MoPo meeting.

- Taiwan Semi monthly sales due on Tues [Jun 10th].

- US President Trump to participate in 'Invest America' roundtable on Mon at 2 pm ET.

- Japan Chief Cabinet Sec Hayashi: Watching situation in Los Angeles closely.

- Waymo to suspend service in downtown Los Angeles; cites multiple vehicles 'erupting' in flames amid protests - NBC.

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

- Mon Jun 9th (Mon night) Apple WWDC Keynote.

- Tue Jun 10th AU Jun Consumer Confidence, AU May Business Confidence.

- Wed Jun 11th KR unemployment, (Wed night US May CPI).

- Thu Jun 12th IN May CPI, (Thu night US May PPI).

- Fri Jun 13th NZ May PMI (Fri night US Jun Michigan Consumer Sentiment).

Holidays in Asia this week

- Mon Jun 9th Australia, Indonesia.

- Thu Jun 12th Philippines.

Headlines/economic data

Australia/New Zealand

- ASX 200 closed for holiday.

- New Zealand Q1 Manufacturing Activity Q/Q: 5.1% v 2.6% prior.

- RBNZ Chief Economist Conway reiterates underlying inflation continues to ease - US financial press.

- RBNZ delays releasing information on former Gov Orr surprise resignation – NZ Herald [weekend update].

China/Hong Kong

-Hang Seng opens +0.8% 23,977.

-Shanghai Composite opens +0.1% at 3,388.

- US Pres Trump: Treasury Sec Bessent, Commerce Sec Lutnick and USTR Greer to meet with China in London on June 9th [weekend update].

- (US) Trump: We are 'very far advanced' on a China deal ahead of high level talks on Monday; China deal is complex but will bring in a lot of money [weekend update].

- China May CPI Y/Y: -0.1% V -0.2%E; PPI Y/Y: -3.3% v -3.1%e (32nd month of negative readings).

- Starbucks: Said to plan to cut prices on certain drinks in China, effective from Tues [Jun 10th] - financial press.

- China May trade balance: $103.2B V $101.1BE [record high amid weaker components].

- China May Foreign reserves: $3.285 T v $3.282T prior [weekend update].

- Bytedance: US Pres Trump said to prepare to extend TikTok US sale deadline again – press [weekend update].

- Reportedly China grants export licenses to rare earth suppliers of top three US automakers; Licenses valid for six months – press [Late Fri update].

- China PBOC sets Yuan reference rate: 7.1855 v 7.1845 prior.

- China PBOC Open Market Operation (OMO): Injects CNY173.8B in 7-day reverse repos; Net injects CNY173.8B v drains CNY156B prior.

- China to accelerate infrastructure investment [inline]; total infrastructure investment might increase by 7.2% in 2025 - China Securities Times.

- China sold 146.6K mts of rice at auction of state reserves - Press.

Japan

- Nikkei 225 opens +0.8% at 38,028.

- Japan Q1 final GDP Q/Q: 0.0% V -0.2%E; GDP annualized Q/Q: -0.2% V -0.7%E; Private Consumption Q/Q: 0.1% v 0.0% prelim; Inventory Contribution to GDP: 0.6% v 0.3% prelim.

- Japan Apr Current Account: ¥2.3T v ¥2.6Te.

- Japan May Bank Lending Y/Y: 2.4% v 2.3% prior [revised].

- BOJ Dep Gov Uchida: Pros and Cons of unconventional Monetary Policy taken since the GFC is a challenge Central Banks around world must deal with - speech at the Japan Society of Monetary Economics (weekend update).

- Nomura Research Institute (NRI): It is possible that the BOJ might make preparations to be able to raise rates at the Jul meeting; drivers of the decision may include tariffs and JGB yields - US financial press.

- Japan PM Ishiba: To protect supply chain, whatever it takes; Japan is moving into phase where interest rates 'rise as a trend'.

- JSDA said to conduct probe related to brokerage firms and 'unsuitable' Japan bond sales - Press.

- Japan and EU to launch 'Competitive Alliance' to deepen trade, economic security ties - Japanese press, citing diplomatic sources [weekend update].

- Japan Trade Negotiator Akazawa: reiterates strongly urged US to reconsider its tariffs; Believe we have made further progress; Nothing is decided on for further talks; Will make a deal as early as possible [weekend update].

- Japan Trade negotiator Akazawa said to be arranging 6th visit to the US for tariff talks - Japanese press.

- Japan said to 'eye' US tariff agreement that is aligned with the G-7 summit which will be held from Jun 15th; no sources cited - Japanese media.

- US customs agency posts notice of antidumping investigation into Japanese cranes - press.

- BOJ debate reportedly centers on quarterly cuts of ¥200B to ¥400B to bond buying [currently ¥400B per quarter] - New bond-buying plan said to last to March 2027; No official decision has been confirmed, with discussions set for the BOJ's June 17, 2025, meeting [weekend update].

- Bank of Japan (BOJ) announcement related to outright bond buying operations: 1-3 Years; 3-5 Years; 5-10 Years; >25 Years (Leaves purchase amounts unchanged).

- Follow up: Japan said to consider ending tourist tax exemption - Japanese press [inline].

- French bank said to have placed ‘unusually’ large bid at last Thursday’s 30-year JGB auction – financial press [update].

- Japan sells the most Germany sovereign bonds in Apr in 10 years; cites Apr current account data.

- Mizuho Financial [8411.JP]: To raise long-term prime rate by 20bps to 2.25%.

- Japan sells ¥3.5T vs. ¥3.5T indicated in 6-month Bills; Avg Yield: 0.4938% v 0.4381% prior, bid-to-cover: 3.44x v 3.79x prior.

- Explosion said to occur at US military's Kadena air base in Japan, injuries reported - Japanese media.

Korea

-Kospi opens +1% at 2,841.

- South Korea President Lee calls for measures to respond to rising prices – Press.

-South Korea Court delays Jun 18th trial for President Lee - Yonhap.

- North Korea's internet is experiencing a major outage early Saturday - press citing UK researcher [weekend update].

-KaKaoPay [377300.KR]: Strength said to be attributed to possible introduction of KRW-based stablecoins.

-South Korea Finance Ministry sells KRW3.9T vs. KRW3.9T indicated in 3-year Bonds: Avg Yield: 2.420% v 2.335% prior; bid-to-cover: x v 2.52x prior.

Other Asia

- India said to consider minimum import price for certain raw materials related to drug production - India press.

-KeppelDC REIT: To be added to the Straits Times index, effective from Jun 23rd; to replace Jardine Cycle & Carriage.

-Taiwan Semi [2330.TW]: Advanced packaging AP7 plant equipment delivery speculated to be delayed to Q4 from Q3 - Taiwan press.

- Thailand Fin Min Pichai: Have agreed to high level talks with the US on tariffs [weekend update].

North America

- (US) Trump: Think support has solidified for the tax bill over the last 24 hours; Will take a look at Musk's govt contracts; No plans to speak with Musk [weekend update].

- (US) Trump: Thinking about the next Fed Chair, "its coming out very soon"; If we had a good Chair he would lower rates **Note: 04/22 (US) Polymarket pricing 37% chance for Kevin Warsh to become next Fed's Chair; Price 6% chance Arthur Laffer, 5% chance for Kevin Hassett, Larry Kudlow and Judy Shelton [overnight update].

- (US) Pres Trump: Fed Chair Powell is a "disaster"..."Despite him, our Country is doing great...He is costing our Country a fortune"; Calls for a 100 bps Fed rate cut - Truth Social post [weekend update].

- (US) Fed's Musalem (voter): See 50-50 chance that Trump tariffs could either boost inflation for a quarter or two, or cause sustained inflation - FT interview [weekend update].

-California Governor Gavin Newsom on the federal government 'taking over' the California National Guard.

- (US) May change in Nonfarm Payrolls: +139K V +126KE [weekend update].

- (US) May average hourly earnings M/M: 0.4% V 0.3%E; Y/Y: 3.9% V 3.7%E [weekend update].

- (US) May unemployment rate: 4.2% V 4.2%E [weekend update]

Europe

- (EU) ECB's Schnabel (Germany): Do not expect a sustained decoupling between the ECB and Fed [weekend update].

- Japan sells the most Germany sovereign bonds in Apr in 10 years; cites Apr current account data.

- (UK) BOE’s Greene: Disinflation process is still ongoing; Expect inflation to continue to come down to target over the medium term [weekend update].

Levels as of 01:20 ET

- Nikkei 225, +0.9%, ASX 200 closed , Hang Seng +1%; Shanghai Composite +0.3% ; Kospi +1.5%.

- Equity S&P500 Futures: -0.2%; Nasdaq100 -0.2%, Dax -0.2%; FTSE100 -0.1%.

- EUR 1.1427-1.1391 ; JPY144.95-144.34 ; AUD 0.6518-0.6494 ;NZD 0.6042-0.6013.

- Gold -0.4% at $3,331/oz; Crude Oil flat at $64.55/brl; Copper +0.2% at $4.8553/lb.