Equity markets rebound amid Friday’s NY holiday which could impact liquidity

Asia market update: Equity markets rebound amid Friday’s NY holiday which could impact liquidity; Samsung supported by Anthropic news; JPY remains on intervention watch; APAC services PMI data above ests; Fed rate hike bets remain alive despite jobs data.

General trend and developments

-Jul Fed rate hike bets decline, but remain alive, after disappointing US jobs data. The participation rate also missed market estimates. Even still, markets have remained focused on inflation and the impact of Iran. The RBA, for example, is expected to extend its rate pause in Aug, despite the stronger Australian jobs data seen for May.

-TECH: Samsung rebounds and rises by >7%; On the news front, Anthropic is said to be in talks with Samsung for custom AI chips [The Information].
-Samsung generally reports its prelim Q2 results in early Jul.

-In other tech news, Anthropic is also said to be closing certain loopholes related to Chinese companies [FT]. The article mentioned Singapore, along with ByteDance, Ant Financial (Alibaba-affiliate) and Microsoft’s Azure. Recall, the transshipping of US chips to China has also been problematic.

-PMI data was supported by the improving Iran situation? Australia and Japan Jun services PMI data was revised higher. Recall, US President Trump said he signed the Iran ‘peace deal’ back on Jun 17th.China’s RatingDog Services PMI was, also, not as bad as feared. Drivers included new export business and product launches.

-Japan Fin Min said no change in our stance about FX policy [Reminder from Jul 2nd: Japan shifts away from telegraphing intervention risks in advance, focusing on hitting speculators - US financial press].

-That being said, there are apparently hawks on the Japanese government’s economic panel. Specifically, panelist Nagahama recommended that the BOJ continue to raise rates at a ‘moderate’ pace [Jul 2nd].

-Meanwhile, Japanese retailers reported Jun domestic SSS declines, led by Fast Retailing. Fast noted factors including the impact of cooler temperatures and typhoons. Looking ahead, Fast Retailing is due to report Q3 earnings next week [Jul 9th].

-NZ sees additional good news on the inflation front: Jun Consumer Confidence not only improved m/m, but inflation expectations also declined. NZ’s 2-years ahead inflation expectations eased from 5.3% to 4.6% in June, back where it was in January before the oil price spike, according to ANZ. The next RBNZ decision is on Jul 8th. The probability of a RBNZ rate hike next week was at about 70.5% back on Tues [according to money market probabilities]. The next NZIER Shadow Board RBNZ decision will come on Mon [Jul 6th].

The US-subsidiaries of smaller companies in Australia have started to receive US tariff refunds.

-Be reminded that South Korea will start 24-hour FX trading from Mon [Jul 6th]. Incidentally, earlier today South Korea announced a plan to provide KRW14.9T to limit the impact of the weak Korean Won (KRW) on smaller companies.

-Vietnam was the first Asian economy to report Q2 GDP.

-US data centers are in focus as the east coast is currently being impacted by a heatwave.

-US equity FUTs +0.3% to +0.9% during Asia trading.

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

-Mon June 29th: EU Jun Consumer Confidence.

-Tue June 30th: KR May Industrial Production & Retail Sales, JP May Industrial Production & Unemployment Rate, NZ Jun ANZ Business Confidence, AU RBA Meeting Minutes, CN Jun PMIs, UK Q1 GDP, (Tue night, US Jun Consumer Confidence, US May JOLTs).

-Wed July 1st: JP Q2 Tankan, KR Jun Prelim Trade Balance, EU & US Jun final S&P/HCOB Mnfg PMIs, CN June RatingDog Mnfg PMI, EU Jun Prelim CPI.

-Thu July 2nd: KR Jun CPI, AU May Trade Balance, JP 10-Year JGB Auction, EU May Unemployment Rate, (Thu night, US Jun Nonfarm Payrolls).

-Fri July 3rd: AU & JP Jun Final S&P PMIs, CN Jun RatingDog Svcs PMI, Global final Jun S&P/HCOB Services PMIs, (Note: “Independence Day (Observed)” – U.S. markets closed, reduced liquidity).

Holidays in Asia this week

-Wed July 1st: Hong Kong.

-Fri July 3rd: US Independence Day.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens +0.4% at 8,760.

-(AU) RBA staff has announces a rejection over proposal of 9.5% wage rise over three years - AFR.

-(AU) AGI.AU Trading update: Guides H1 (A$) Rev ~A$116M, EBITDA 17M; notes receipt of $2.7M in tariff refunds.

-(AU) Australia Jun Final PMI Services: 50.5 v 49.9 prelim (Confirms a move back into expansion).

-(AU) Australia regulator AUSTRAC: Independent assurance confirms that sportsbet has implemented and operationalized all required remediation.

-(NZ) New Zealand Jun ANZ Consumer Confidence: 91.3 v 86.5 prior.

-(NZ) New Zealand PM Luxon: Indian Prime Minister Narendra Modi will make his first official visit to New Zealand next week.

China/Hong Kong

-(CN) Shanghai Composite opens +0.1% at 40,031; (HK) Hang Seng opens +0.8% at 23,241.

-(CN) China Jun RatingDog PMI Services: 54.1 v 53.0e (40th month of expansion).

-(CN) China Commerce Minister (MOFCOM) welcomes UK companies to invest in China - Statement.

-(CN) PBOC's overnight tool targets liquidity, not broad easing [inline] - Paper.

-(CN) PBOC cut bond purchases; during Jun the central bank purchased a net of CNY10B in sovereign bonds v CNY50B m/m [follows prior reports about the 'low' interest rate environment in China] – US financial press.

-(CN) China Foreign Exchange Trade System (CFETs) as of 5 pm on Thurs had single-day offshore Yuan FX transaction of >$12B - Press.

-(CN) China considering CNY20T ($2.9T) investments in energy development through FY30 - Shanghai Securities News.

-(CN) China fully allocates the CNY200B for equipment upgrades in 2026 - Press.

-(CN) China banks ‘surge’ ahead of IPO wave in Hong Kong – SCMP.

-(HK) Hong Kong to launch gold clearing, settlement system from next week - SCMP.

-(CN) China PBOC sets the yuan mid-point at 6.8047 v 6.8088 prior (strongest level since February 10th, 2023).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY63B in 7-day Reverse Repos; Net drains CNY169B v drains CNY82B prior.

Japan

-(JP) Nikkei 225 opens -0.1% at 68,676.

-(JP) Japan Fin Min Katayama: No change in our stance about FX policy; US, Japan are in close communication on FX; US, Japan are always confirming FX accord.

-(JP) Follow up: The Japanese Yen strengthens past ¥160.93/USD (v ¥161.17/USD, +0.1% prior) following Japan's Fin Min Katayama comments.

-(JP) Japan Trade Min Akazawa: Affirms there are various factors that drive FX rates, no specific comment on FX; Need to monitor, respond to FX impact on small firms.

-(JP) Japan Jun Final PMI Services: 52.2 v 51.8 prelim.

-(JP) 6.0 Mag earthquake strikes Southwestern Ryuku Islands, Japan - GFZ.

Korea

-(KR) Kospi opens +1.2% at 7,340.

-(KR) South Korea to provide KRW14.9T for smaller firms hit by weak Won - [South Korea Finance Ministry] Statement.

-(KR) South Korea considers KRW5T sovereign AI push with tax windfall - Daily.

-(KR) South Korea Fin Min Koo: Won, financial market volatility expanding; FX volatility, price increase adding difficulty to citizens - comments at a South Korean government meeting.

-(KR) South Korea's President Lee approval rating rises to 54% (v 51% prior) - Press.

-(KR) FSS announces plan to penalize MBK Partners Ltd. over it's management of Homeplus Co. that includes suspension of duties; No terms disclosed - Yonhap.

Other Asia

-(SG) Singapore Central Bank (MAS) Partners Industry to develop Safeguards for AI Agents in Finance.

-(PH) Philippines President Marcos reappoints Wassmer, Querubin as Monetary Board Members at the Philippines Central Bank (BSP).

-(ID) 6.2 mag earthquake strikes Halmahera, Indonesia - GFZ.

-(SG) Singapore Jun PMI (whole economy): 57.4 v 56.7 prior.

-(VN) Vietnam Jun CPI Y/Y: 4.7% v 5.5%e.

-(VN) Vietnam Jun Industrial Production Y/Y: 12.7% v 8.8% prior.

-(VN) Vietnam Jun Retail Sales Y/Y: 14.8% v 11.8% prior.

-(VN) Vietnam Q2 GDP Y/Y: 8.4% v 7.0%e.

-(VN) Vietnam Jun Trade Balance: -$2.6B v -$2.3Be.

North America

-(US) Trump: Fed Chair Warsh has a board that's a little bit hostile; Warsh has to do what he has to do; Will start proper procedure for removing Fed's Cook - CNBC interview.

-(US) Jun Change in Nonfarm Payrolls: +57K v +113Ke (near lowest analysts' estimate) [US market close].

-(US) Jun Unemployment Rate: 4.2% v 4.3%e [US market close].

-(US) WHO: Hantavirus outbreak no longer poses a public health risk.

-(US) Fed's Daly (non-voter): Fed policy still in slightly restrictive position; AI investment shock has people wondering if it will be inflationary; We are in early stages of a potential exponential rise in productivity gains from AI [US market close].

-(US) Jun Average Hourly Earnings M/M: 0.3% v 0.3%e; Y/Y: 3.5% v 3.5%e [US market close].

-(US) Initial Jobless Claims: 215K v 218Ke; Continuing Claims: 1.814M v 1.820Me [US market close].

-(US) May Factory Orders: -1.3% v -2.0%e [US market close].

-(US) Weekly EIA Natural Gas Inventories: +87 BCF vs. +81 BCF to +84 BCF indicated range [US market close].

-(US) USTR issues statement on July 6th, 2026 Brazil Section 301 hearing.

-(US) ANTHROPIC.IPO Statement: More details on Fable 5's cybersecurity safeguards; Not intended to block cybersecurity-related activities.

-(US) ANTHROPIC.IPO Announces to close loopholes that allow Chinese companies to access Claude - FT [citing people familiar with the matter].

-(US) DOE issues emergency order to mitigate blackout in South Carolina, North Carolina - US Energy Sec Wright Statement.

-(US) Treasury Sec Bessent: Doesn't see problem with Trump's crypto earnings - CBS Interview.

-(US) President Trump: [On NATO] Ridiculous for the US to continue along this one-sided path when the relationship is not reciprocal... post on Truth Social.

-(US) US official blamed the pursuit of investment from China by Canada for [USMCA] pact decision – SCMP.

-(CA) Follow Up: Canada PM Carney: Agreed with Alberta that the best route for a new pipeline is south through the Trans Mountain corridor to the Pacific coast.

-(BR) Brazil Government sets new rules for meat exports to the European Union - Globo Rural.

-(VE) Venezuela Interim President Delcy Rodriguez: Venezuela asked for international help immediately after earthquake; Venezuela creating $200M reconstruction fund with IMF; 2,595 dead from Venezuela earthquakes - State TV (update).

-(CL) Chile Central Bank Traders Survey.

Europe

-(RU) Russia Central Bank (CBR) Gov Nebulin: CBR will look into fuel shortages at the July meeting; assume situation to be short-lived [EU market close].

-(EU) EU firms are becoming more reliant on China, not less; cites EU chamber chief – SCMP.

-(IE) Ireland Q1 Final GDP Q/Q: -7.0% v -12.1% prelim; Y/Y: -13.0% v -17.1% prelim [EU market close].

-(IE) Ireland Jun PMI Services: 54.2 v 50.8 prior (2nd month of expansion).

Middle East

-(IR) Iran's Unified Command of Armed Forces: Will respond to US intervention in Strait of Hormuz; All vessels are obliged to take maritime route designated by Iran for safe passage; any disobedience will endanger their security [EU market close].

-(IR) Kpler's Amena Bakr: Saudi crude and products exports averaged around 5.8 mb/d, rather than the 6.3 mb/d reported by some, according to sources familiar with the matter. The higher figure includes volumes from previously stranded cargoes - X [US market close].

-(IR) Kuwaiti crude oil production produced an avg of 1.65M bpd (reportedly as high as 1.9M bpd of the last ten days) in June - press [US market close].

Levels as of 01:20 ET

Nikkei 225 +0.9%; ASX 200 +1.4%; Hang Seng +1.0%; Shanghai Composite +0.5%; Kospi +5.5%.

Equity S&P500 Futures +0.3%; Nasdaq100 +0.9%; DAX +0.5%; FTSE100 +0.1%.

EUR 1.1455-1.1420; JPY 161.51-160.92; AUD 0.6944-0.6911; NZD 0.5718-0.5690.

Gold +1.2% at $4,174/oz; BTC +1.8% at $61,639; WTI Crude Oil +0.6% at $69.07/bbl; Copper +1.2% at $6.2468/lbs.