Equity supply and AI credit deals remain in focus pre-Oracle results, KR two-way VOL continues

Asia Market Update: Equity supply and AI credit deals remain in focus pre-Oracle results; KR two-way VOL continues; Cautious sentiment not helped by fresh Iran hostilities; JP/CN CPI with focus on US May CPI tonight.

General trend and developments

-Super Micro saw its -7% losses in the NY session double after the close for an aggregate -14% loss on the day, driven by the announcement of a $7B equity financing transaction to fund its AI orders. Only adds to US equity liquidity concerns amid a flood of equity financing recently, topped by Google’s record $85B equity raise and SpaceX’s $75B IPO offering at a mammoth $1.75-1.80B valuation due by Friday. Eyes on Oracle reporting Q4 results tonight. Note also Softbank reportedly now stalled in its attempt to get a $6B loan backed by its stake in OpenAI.

-Korea’s Kospi whipsawing continues, down as much as -6% today after yesterday’s +8% rise and Monday’s -8% fall. Also a red-letter day for the rest of Asia with the Nikkei off by more than -2% and only Australia’s ASX eking out a flat day.

-Ongoing back-and-forth of hostilities between Iran and the US/Gulf States kept the markets cautious, although no major damage reported and US CENTCOM’s later announcement of a completion to hostilities during the Asia session saw oil off its US session highs following Pres Trump’s announcement in the NY session that an Apache helicopter had been downed and the US “must respond” (Note the US crew were reported as safe and well). Pres Trump reiterated post-US close that he believes a deal with Iran is “still close”.

-Inflation theme: Japan’s PPI came in hotter for May, but will there be pass-through to the consumer?. There was a similar theme regarding China’s May inflation readings, with the Iran conflict-induced supply shock keeping PPI at nearly 4%, much-elevated after several years of falling CN prices - but little capacity for Chinese firms to pass on those costs to the consumer, with CPI for May coming in less than 1/3 the level of PPI. US CPI due later tonight (Fed Chair Walsh’s first CPI reading as Chair in a Fed board increasingly hawkish in tone. Note the Fed is already in its quiet period ahead of next week’s Fed decision).

-Japan BOJ noted a rise in May’s Yen-denominated import price index, at 25.5%, marked the fastest since Nov 2022.

-A weak 30-year JGB auction out of Japan saw a tail of 38bps and a bid-to-cover of <3x. However, little reaction out of the JGB market, where yields at the long-end of the curve held on to their earlier 2-3bps fall.

-Indonesia Central Bank’s surprise overnight hike by 25bps initially saw the Rupiah strengthen, but during the Asia session once more fell below 18,000/USD. This puts the BI in a tough spot, as one of the rationales for the hike was to strengthen the stabilization of the Rupiah from the impact of high global turmoil due to the war in the Middle East and as a preemptive measure to keep inflation in check. The other reason stated by the BI was to increase returns for the attractiveness of foreign portfolio investment inflows (which was particularly hurt by MSCI’s decision in late January to apply interim freeze for Indonesia stock index changes. As recently as May 12th MSCI was still making cautious comments on Indonesia).

-Taiwan’s Central Bank (CBC) Gov believes that the recent pull back in the stock market is 'healthy“. On the inflation theme, Gov Yang added that Taiwan's inflation is ”relatively mild“.

-Reports that China is considering a~$295B AI data center build-out over the next five years suggests a shift in how China intends to compete in the global AI race. If confirmed, a move toward a state-led, centralized model that far outstrips private investment forecasts (e.g. Alibaba’s $69B three-year AI build out), it appears the CCP may be putting AI ahead of its focus on all other "New Quality Productive Forces" in recent years - which in turn could put question marks over those industries continuing to enjoy the level of state support they have thus far enjoyed. China may also be feeling pressured by the multi-trillions of (mostly private) dollars being spent in the US under its own AI build-out. Comes also as Taiwan said to consider "much stricter" curbs on AI chip exports to China, in alignment with US policy. [** TTN Note: As China struggles with already huge levels of combined government debt, local debt and hidden debt, memories of the USSR spending itself to an economic standstill trying to keep up with US defense spending in the 1970’s and 80’s are difficult to shake].

-Japan Defense Ministry in its annual White Paper designated China as “Japan’s most serious concern”.

-China Pres Xi’s first trip to North Korea since before Covid saw the two nations agree to expand cooperation and safeguard sovereignty.

-Taiwan Semi to release monthly Rev for May, 2026 at the time of this update’s release [**Reminder: April Rev saw the lowest pace increase since Oct 2025].

-US equity FUTs -0.8% to -0.5% during Asia trading.

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

-Wed Jun 10th: (Wed night, US May CPI, CA Rate Decision).

-Thu Jun 11th: KR May unemployment rate, (Thu night, ECB Rate Decision, US May PPI).

-Fri Jun 12th: UK Apr GDP, (Fri night, US Jun Prelim Michigan Consumer Sentiment).

Holidays in Asia this week

-Mon Jun 8th: Australia.

-Fri Jun 12th: Philippines.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens -0.2% at 8,588.

-(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 70.8 v 68.8 prior.

-(NZ) USGS: Magnitude 6.0 earthquake strikes Auckland Islands, New Zealand region.

China/Hong Kong

-(CN) Shanghai Composite opens +1.3% at 4,010; (HK) Hang Seng opens -0.5% at 24,443.

-(CN) China May CPI Y/Y: 1.2% v 1.3%e [the data remains below the ~2.0% CPI target].

-(CN) Small banks in China are offering higher rates on CDs in order to lure deposits – Chinese press.

-(CN) China has issued its second batch of fuel export quotas for 2026 - Press.

-(CN) China's Taiwan Affairs Office: China coast guard is conducting law-enforcement patrols in the waters East of Taiwan island in accordance with the law.

-(CN) Chinese companies rush to scale-back usage of "red-chip" structures - FT.

-(CN) China banks said to be attracting gold investors via 'favors' - China Securities Times.

-(CN) China reported CNY13B in back taxes for Jan-May, relates to foreign income; cites the State Taxation Administration – US financial press.

-(HK) Remarks from event in Hong Kong on the 10th June, 2026.

-(HK) iCapital increases Hong Kong office space by 100% – SCMP.

-(HK) Remarks from event in Hong Kong on the 10th June, 2026.

-(CN) China PBOC sets the yuan mid-point at 6.8130 v 6.8147 prior (strongest level since February 10th, 2023).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY159B in 7-day Reverse Repos; Net injects CNY159B v injects CNY153B prior.

Japan

-(JP) Nikkei 225 opens -0.7% at 64,952.

-(JP) Japan and UK are moving toward offshore wind cooperation agreement - Nikkei [US market close].

-(JP) Japan May PPI (domestic CGPI) M/M: 0.9% v 0.8%e; Y/Y: 6.3% v 5.6%e (Y/Y increase strongest since March, 2023 - BoJ data).

-(JP) Japan sells ¥600B vs. ¥600B indicated in 30-YEAR JGB bonds; Avg yield: 3.8600% v 3.8420% prior; Bid-to-cover: 2.94x v 3.49x prior.

-(JP) Japan's Defense Ministry expected to designate China as "Japan's most serious concern" - Ministry's Annual White Paper (Nikkei).

-(JP) Nikkei Forum Future of Asia 2026 in focus.

-(JP) Bank of Japan (BOJ) Official: May's Y/Y rise in Japan's Yen-denominated import price index, at 25.5%, marks the fastest since Nov 2022.

-(JP) Japan mega banks said to launch live stablecoin transactions in FY26-27 - press.

-(JP) Japan to increase IP protections for certain new fruit and vegetable varieties - Nikkei [update].

Korea

-(KR) Kospi opens -2.4% at 7,899.

-(KR) China Pres Xi sent message of thanks to North Korea leader Kim, pledges to advance strategic ties between the states - KCNA [US market close].

-(KR) South Korea Finance Ministry: Volatility in financial sector is expanding.

-(KR) Korea Exchange activates sidecar to halt Kospi program selling, following Kospi index "extending losses" by -4.9% - US financial press.

-(KR) South Korea may require shareholders to vote on profit-linked bonus - Daily.

-(KR) Follow up: South Korea FSS and Bank of Korea (BOK) to begin joint FX inspection on banks from today - press.

Other Asia

-(ID) Follow up: Indonesia's Rupiah falls again, as it touches the 18,000/USD mark.

-(ID) Follow up: Indonesia's Senior Deputy Governor: Indonesia Central Bank held a phone-call with investors in Europe and US explaining its surprise rate hike.

-(ID) Indonesia Fin Min: Impact on inflation from fuel price hike should be limited.

-(ID) Indonesia May Consumer Confidence: 120.9 v 123.0 prior.

-(ID) Indonesia's Rupiah strengthens to 17,875/USD in early trade following "surprise" rate hike.

-(ID) Indonesia Central Bank (BI) Gov Warjiyo: BI sees Indonesia economic growth at 5.1-5.9% in 2027; Rupiah (IDR) currency is inline with the government's estimate of 16,800-17,500 - comments in parliament.

-(ID) Indonesia Fin Min: Impact on inflation from fuel price hike should be limited.

-(ID) Indonesia authorities question Maybank staff over Salim Group exports.

-(TW) Taiwan said to consider "much stricter" curbs on AI chip exports to China to align with US - press [US market close].

-(TW) Taiwan Central Bank (CBC) Gov Yang: I personally believe the recent pullback of the stock market is healthy - comments to Legislature.

-(TW) Taiwan test fires US-supplied missile launcher towards China; the test occurred earlier on Wed - WSJ.

-(IN) India to raise jet fuel prices by 10% for domestic operations as part of price stabilization fund scheme for local airlines - press [US market close].

-(IN) India govt official: Q1 GDP growth held up despite global challenges [US market close].

-(IN) Indian families scale back on gold for weddings, as prices hover near highs - Nikkei Asia.

-(MY) Malaysia PM Anwar: Malaysia, Japan looking to boost trade in Ringgit and Yen currencies.

-(MY) Malaysia's Deputy Finance Minister Amir: Not worried by Ringgit's recent slide; Remains committed to medium-term fiscal goals - Interview.

-(VN) Vietnam Government: Allows coal miners to raise output to meet power generation demand.

North America

-(US) Apr Trade Balance: -$55.9B V -$56.1BE [US market close].

-(US) May Existing Home Sales: 4.17M v 4.07Me (highest since Dec); First-time buyers were 35% of sales v 33% m/m (highest since June 2020) [US market close].

-(US) Atlanta Fed GDP Now: Raises Q2 GDP estimate from 3.02% to 3.29% [US market close].

-(US) State Dept issues joint statement on US-Japan deterrence dialogue [US market close].

-(US) US Dep Sec of State Landau: US working to release energy reserves and boost sales of LPG, LNG to ASEAN nations.

-(US) EIA: Assumes oil shipments through the Strait of Hormuz will resume in Q3 [US market close].

-(US) US Energy Sec Wright: There will be many months to return to normal energy flows [US market close].

-(US) Reportedly the White House has requested the Center of AI Standards and Innovation to stop publishing public reports - WSJ [US market close].

-(US) Weekly API Crude Oil Inventories: -9.1M v -6.8M prior [US market close].

-(US) House Republicans pass the $70B immigration enforcement funding bill [US market close].

-(US) USTR Greer: Moving quickly on domestic sourcing of critical minerals [US market close].

-(US) Reportedly US Intelligence workforce were told to expect cuts - press [US market close].

-(US) US FDIC Chair Hill: Wants bank examiners to focus on material financial risk [US market close].

-(US) Treasury’s $58B 3-year note auction results: Draws 4.192% v 3.965% prior; BTC 2.64 v 2.54 prior and 2.64 over the last 9 auctions [US market close].

-(US) House passes bill to accelerate first union contract talks - US financial press.

-(US) Arizona has proposed pausing tax breaks related to data centers for 3 years - US financial press.

-(US) President Trump: Pulte taking over as acting DNI from June 19th, 2026 - post on Truth Social.

-(US) Agriculture Sec Rollins: First U.S. calf with screwworm is healthy, recovering - Interview on Fox Business.

-(US) Graham Platner wins Maine Senate Democratic primary – US financial press.

-(US) May NFIB Small Business Optimism: 95.3 v 96.0e [US market close].

-(CA) Canada Trade Tribunal sees 'injury' from plywood imports from China - Press [update].

-(MX) Mexico May CPI M/M: -0.2% v -0.1%e; Y/Y: 4.0% v 4.0%e [US market close].

-(MX) Mexico Pres Sheinbaum: Met with JP Morgan CEO Dimon [US market close].

-(MX) Follow up: Mexico's Agriculture Ministry: Mexico halts imports of U.S. livestock following screwworm cases.

-(BR) Brazil Aviaion Regulator ANAC Head: Brazil seeks US, Canada, and Europe cooperation to harmonize eVTOL rules [US market close].

-(BR) Brazil May FGV Inflation IGP-DI M/M: 0.9% v 0.8%e; Y/Y: 2.5% v 2.4%e [US market close].

-(CU) Cuba poised to receive it's biggest US fuel shipment dating back to the "Cold War embargo" - US financial press.

Europe

-(RU) Local Governor: Two industrial facilities on fire in Russia's Vladmir region following drone attack - Interfax.

-(EU) ECB's Moulin (France): Bank of France will revise inflation forecast higher; Would not draw many conclusions on French GDP weakness; Europe can issue joint debt to fund some projects [US market close].

-(NL) Netherlands Apr Manufacturing Production M/M: 1.3% v 2.8% prior; Y/Y: 4.7% v 1.7% prior.

-(NL) Netherlands May Producer Confidence: -2.0 v -0.7 prior.

-(UK) Thames Water to pay £749M under creditor takeover deal - FT.

-(FR) AIR.FR CEO Faury: In dispute with Pratt & Whitney over deliveries in 2027; Depending on how much we get from Pratt, we might fall short of production goal (prev guided 870 for FY26) [US market close].

Middle East

-(IR) US Official: [Confirms] Third round of strikes in Iran [following Iran shooting down Apache Helicopter] - Axios.

-(IR) Pres. Trump: Confirms Iran shot down an Apache Helicopter patrolling the Strait of Hormuz last night; US must respond to this attack - Truth Social [US market close].

-(IR) Follow up: U.S. completes strikes in response to Iran's Apache helicopter attack on Monday.

-(IR) Iran IRGC: launched drone strike on US Fifth fleet in Bahrain; Clashes are continuing, warns 'more severe responses' if US hostility continues; hit 21 aerial US Naval targets in the region, used long-range missiles in certain strikes - Iran media.

-(IR) Iran Foreign Min: Foreign forces in proximity to Iran territory are at constant risk on account of human error, accidents, or potentially being caught in the crossfire; To reduce risk, the best thing is for them to leave [provides a reasoning on the Apache Helicopter incident] [US market close].

-(IR) Reportedly US and Iran have zeroed in on 4 nuclear issues during talks; US believe Iran will settle on a 15-year suspension of enrichment - NYT [US market close].

-(IR) IDF Chief, General Zamir: Our strike in Iran was a preparation for a heavier blow; We are prepared to return and strike again [US market close].

-(IR) Iran state media: Military sources say no offensive air military ops conducted in the last 24 hours in the Strait of Hormuz; Any renewed hostility by the enemy under the pretext of the US Apache helicopter crash will trigger a decisive response [US market close].

-(IR) US CENTCOM says has begun "self defense" strikes against Iran, in response to the downing of a US Apache helicopter; Mission will be a proportional response to Iranian aggression - X Post [US market close].

-(IR) US Pres Trump: It's important to respond to Iran downing of helicopter; Our response will be strong and is happening now [US market close].

-(IR) Iran's State Media: Qeshm was attacked; Situation now reported to be calm after US attacks on areas in Southern Iran.

-(IR) Fresh explosions heard in Ahvaz (Southwest Iran) - Iran press.

-(IR) Iran's Foreign Minister Aragchi: Armed forces will leave no attack unanswered - post on X.

-(IR) Bahrain Interior Ministry: Siren has been sounded; Warning siren has been sounded; Urges public to head to nearest safe place.

-(IR) Follow up: Bahrain's Interior Ministry: Warning siren has been sounded again.

-(IR) Follow Up: US airstrikes targeted 5 locations in Southern Iran - NYT [citing two Iranian officials].

-(IR) IRIB: US renews strikes on Iran's Southern Jask region.

-(AF) Afghanistan claims Pakistan violated it's airspace last night.

-(IL) Follow up: Jordan's Armed Forces: No casualties or damage reported; Debris fell following interception of 5 missiles from Iran - State TV.

Levels as of 01:20 ET

Nikkei 225 -2.4%; ASX 200 +0.1%; Hang Seng -1.4%; Shanghai Composite -0.8%; Kospi -6.7%;

Equity S&P500 Futures -0.5%; Nasdaq100 -0.8%; DAX -0.1%; FTSE100 -0.2%.

EUR 1.1553-1.1533; JPY 160.44-160.24; AUD 0.7033-0.7009; NZD 0.5824-0.5805.

Gold -1.9% at $4,181/oz; BTC -3.6% at $61,160; Crude Oil +0.1% at $88.32/bbl; Copper -1.1% at $6.2833/lbs.