Further stories on Trump putting pressure on Fed Chair helps push Dollar lower amid quiet session

Asia market update: Further stories on Trump putting pressure on Fed Chair helps push Dollar lower amid quiet session; Focus on US Final Q1 GDP, US May Durable Goods.

General trend

- The dollar came under further selling pressure with WSJ reporting that Trump is considering announcing a “shadow” Fed Chair as soon as Sept/Oct chair, in a bid to ‘undermine’ Powell. Euro rose above $1.17, highest Since Oct 2021. Yen broke back into 144 handle. USD lowest against Swiss Franc since 2011 (just above 0.80), while the DXY index lost a further -0.2% to briefly fall below 97.00, lowest since Jan 2022.

- Dollar mood perhaps not helped by Treasury Sec Bessent reminding Congress in a letter that it Must act on the debt limit by August recess (while extending the debt-limit measures hrough July 24th).

- Nikkei 225 outperformed Asia +1.4 at nearly 39,500 (hitting 39K for first time since Feb).

- South Korea Pres Lee helped take the shine off the recent stellar performance of the Kospi index since his election victory on Jun 3rd (with the index close to all-time-highs), saying in a speech to the National Assembly that the Korean economy is in a 'desperate situation'. Kospi underperforming Asia down as much as -2%, later paring half those losses.

- Japan Trade Negotiator Akazawa: Will keep in mind July 9th deadline as I negotiate; We cannot accept 25% auto tariffs.

- Australia May Job Vacancies much more positive than prior.

- Another stronger bond auction result for Japan JGB market, with the 2-year auction having its highest demand ratio since January of this year.

- China PBOC sets Yuan reference rate: 7.1620 v 7.1668 prior (strongest since Nov 8, 2024) Dollar Now at 7.15 handle.

- US special envoy Witkoff said he is hopeful for a comprehensive peace deal with Iran and is also looking forward to "big announcements" on the Abraham Accords.

- Memory maker Micron initially +6% after hours but then lost all gains as it handily beat Q3 earnings estimates and reported significantly higher gross and op margins y/y. Sees growing AI memory demand.

- US equity FUTs +0.1% to +0.2% during Asian trading.

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

- Thu Jun 26th (Thu night US Final Q1 GDP, US May Durable Goods).

- Fri Jun 27th JP May Retail Sales, (Fri night US May Core PCE).

Holidays in Asia this week

- Fri Jun 27th Malaysia, Indonesia.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.2% at 8,541.

- Australia May Job Vacancies Q/Q: +2.9% v -4.3% prior.

- New Zealand sells total NZ$450M vs. NZ$450M indicated in 2029, 2035 and 2041 bonds.

- BNZ: New Zealand May Job Ads M/M: -2.1% v 1.1% prior ; Y/Y: -7.8%.

China/Hong Kong

- Hang Seng opens -0.5% at 24,345; Shanghai Composite opens -0.1% at 3,451.

- HKMA to ensure orderly operation of HK$ markets - statement.

- China Premier Li: China remains biggest driving force for world economy - comments at Asian Infrastructure Investment Bank's annual meeting.

- US said to allow ethane exports to be loaded and shipped to China, but companies need authorization to unload the ethane - press cites letter to US ethane exporters.

- US Sec State Rubio discussed with G7 ministers cooperation on China's actions - State Dept statement.

- China official: China vows stronger controls over abuse of addictive substances including narcotic and psychotropic drugs.

- China Vice Premier He Lifeng: Vows to stabilize the property market and expectations.

- Former PBOC official Zhu Min: Consumption is the biggest challenge to China's economy today.

- China reportedly asks some rare earth firms for information about their experts, including forcing them to turn in passports, aiming to prevent trade secret leaks – WSJ.

- China PBOC sets Yuan reference rate: 7.1620 v 7.1668 prior (strongest since Nov 8, 2024).

- China PBOC Open Market Operation (OMO): Injects CNY509B in 7-day reverse repos; Net injects CNY306B v injects CNY209B prior.

Japan

- Nikkei 225 opens +0.3% at 39,072 (hits 39K for first time since Feb 19th).

- Japan Trade Negotiator Akazawa: Will keep in mind July 9th deadline as I negotiate; We cannot accept 25% auto tariffs - Japanese press.

- Japan sells ¥2.6T VS. ¥2.6T indicated in 2-year JGB bonds; AVG yield: 0.7290% V 0.7520% prior; bid-to-cover: 3.90x v 3.77X prior (Strongest coverage ratio since Jan 2024).

- Japan releases weekly flows data [period ended Jun 20th]: Foreign buying of Japan equities: -¥524.3 v +¥473.3B prior; Japan buying of foreign bonds: ¥615.5B v ¥1.57T prior.

Korea

- Kospi opens flat at 3,108.

- South Korea Jun Manufacturing Business Survey: 94.4 v 94.7 prior.

- South Korea Pres Lee: South Korea needs 'bold investment' in AI as well as chips; Economy is in a 'desperate situation' - speech at National Assembly.

Other Asia

- Thailand central bank (BOT) leaves benchmark interest rate unchanged at 1.75%; as expected [overnight update].

North America

- (US) Pres Trump has considered selection of new Fed Chair as successor to Powell by Sept, Oct, in a bid to 'undermine' Powell – WSJ.

- (US) Treasury Sec Bessent sends letter to Congress: Must act on debt limit by August recess; Debt-limit measures extended through July 24th - financial press.

- (US) MBA Mortgage Applications w/e Jun 20th: +1.1% v -2.6% prior.

- (BR) Brazil Jun FGV Construction Costs M/M: 1.0% v 1.4%e.

- (US) House SALT Caucus Repubs to meet with Treasury Sec Bessent at 11:00AM ET - Punchbowl.

- (US) White House Council of Economic Advisers Chair Miran: Optimistic on trade discussions before July 9th; Expect there to be some stubborn holdouts on trade.

- (US) Pres Trump: Tremendous things accomplished at highly productive NATO summit; think Iran-Israel war is over; We have reasserted credibility of American deterrence - comments at NATO summit.

- (US) MAY NEW HOME SALES: 623K V 693KE; Month’s supply highest since fall 2022.

- (US) DOE CRUDE: -5.8M V -1.5ME; GASOLINE: -2.1M V 0ME; DISTILLATE: -4.1M V +1ME.

- (US) Pres Trump: Know within 3-4 people for next Fed chair pick.

- (US) Fed's Collins (voter): Monetary policy is well positioned, it's time for patience and care; Reiterates that the economy is solid overall.

- (MX) US Treasury identifies three Mexican financial institutions as under money laundering concern for opioid trafficking.

- (US) White House NEC Dir Hassett: See plenty of room for Fed to lower interest rates right now - comments to media.

- (US) Fed's Barr and Kugler don't support plan to ease key bank capital rule; Fed proposal would reduce aggregate Tier 1 capital requirements for global systematically important banks by 1.4% ($13B) - press cites prepared statements.

- (US) Treasury $70B 5-year note auction draws 3.879% V 4.071% PRIOR, BTC 2.36 V 2.39 prior and 2.39 over the last 12.

Europe

- (IE) Ireland Jun Consumer Confidence Index: 62.5 v 60.8 prior.

- Hungary Jun Business Confidence: -12.7 v -13.8 prior.

- (IR) Iran official: Nuclear installations badly damaged by US.

- (EU) NATO Sec Gen Rutte: Europe and allies must do more heavy lifting; Will continue to support Ukraine on 'irreversible path' to membership; Pres Trump 'deserves all the praise' - comments at NATO summit.

- (CZ) Czech central bank (CNB) leaves 2-week repurchase rate unchanged at 3.50%; as expected.

- (ES) US Pres Trump: Negotiating with Spain on trade deal; Spain terrible for what they have done (on refusal to meet 5% of GDP defense spending target.

- (EU) NATO summit joint statement: Confirm to agree on defense spending target of 5% of GDP by 2035; Omits earlier wording that Ukraine's future is in NATO.

Levels as of 01:20 ET

- Nikkei 225 +1.5%, ASX 200 -0.1%, Hang Seng -0.6%; Shanghai Composite +0.1%; Kospi -1.2%.

- Equity S&P500 Futures +0.1%; Nasdaq100 +0.2%; DAX +0.1%; FTSE100 flat.

- EUR 1.1664-1.1717; JPY 144.57-145.27; AUD 0.6505-0.6536; NZD 0.6030-6066.

- Gold +0.2% at $3,349/oz; Crude Oil +0.5% at $65.21/bbl; Copper +0.3% at $4.9428/lb.