Iran continues to weigh – Blowout CN Trade ahead of Q2 GDP

Asia market update: Iran continues to weigh; Blowout CN Trade ahead of Q2 GDP; 20-yr JGB auction best in 16 yrs on Katayama; KRW <1,500 amid easing FX rules; Focus on US Jun CPI.

General trend and developments

-Crude oil kept rising overnight, ~10% higher than last Friday’s close with the majority of the rise coming in the US morning as Pres Trump notified Congress of a ‘new war’ against Iran as CENTCOM confirmed another night of heavy attacks in Iran, while Trump also threatened a 20% toll on all transiting cargo – all coming as the US military reinstated a blockade on Iran in the Strait of Hormuz.

-UAE said that two national tankers targeted by two Iranian cruise missiles in Southern Strait of Hormuz, with one Indian crew member killed and eight others wounded. Weakness today in India rupee and equities. Sirens sounded again in Bahrain, although no substantial damage reported.

-China’s trade surplus rocketed ever higher on the back of the highest export surge in June (+27%) since 2021’s initial Covid recovery. AI boom drove strong demand as the June dollar-denominated trade surplus of $125B leaped past the previous record for a month ($114B in Dec, 2025). Also noteworthy was China’s June oil imports confirming to hit their lowest since Oct 2016 while monthly car exports surged past 1M units.

-Anticipation ahead of China’s Q2 GDP and data dump tomorrow to see if domestic demand continues to be weak (Retail Sales) even as exports drive the Chinese economy.

-Although Japan 20-year yields rose 5bps yesterday in tandem with conflict-spooked bonds around the world, ahead of today’s 20-year JGB auction fresh comments from Fin Min Katayama saw 20-year yields fall more than 4bps as she said it was time to consider including JGBs in Nippon Individual Savings Accounts (NISA), while adding to her Friday comments that adjustments will be made to GPIF pension portfolio if required and wanting to enhance the attractiveness of Japanese govt bonds overall. (Reminder that Japan cabinet due to approve 2026-27 economic framework on July 21st). SocGen also said it sees ~$76B of JGB purchases if the world’s biggest pension fund GPIF simply rebalances its assets, without having to change its asset allocation mix. All led into the strongest 20-year JGB auction in 16 years, with a tail of 0bps and high demand of 4.52x, far above the 12-month average of 3.54x. [Note, however, Yen largely unchanged at 162 handle].

-Korean Won strengthened beyond 1,500 for first time since mid-May amid South Korea MOF’s “significantly eased” FX rules on capital transactions while also boosting 2026 GDP to 3% (from 2% prior) on the AI chip boom.

-Korea Kospi's nosebleed levels of volatility continued, up in early trade, then down as much as -5.3% before recovering to be +1.1% at time of writing (for now...). SK Hynix losing a further ~4% during Korean trading may mean that its recently listed US stock price may fall below the $149 IPO offer price. [Note that SpaceX shares also kept falling during the US session to be as low as just a dollar above its pre-IPO set price of $135/shr].

-US equity FUTs also bounced late in the Asia session, off its lows for the week amid the escalated war tensions in the Middle East.

-Market expectations of a further RBNZ hike in Sept up to as high as 60%, with NZ 2-year yields up +10bps as the NZIER Q2 Business Confidence vaulted to +8% v -4% q/q, with a net 54% of businesses expected to raise prices in Q3. [Comes on top of yesterday’s first rise in the NZ Services Index since January and last week’s Manufacturing PMI up to nearly 60, highest since 2021. NZ syndicated bond auction also well supported, selling the top end of the amount indicated].

-Australia Consumer Confidence ticked up but still overall low levels as Business Confidence improved but still negative.

-Mixed Singapore Q2 GDP data, beating on the yearly but below ests on the quarterly.

-US Fed Chair Warsh’s first day of his debut Congressional hearings start tonight.

-Pres Trump to make a Speech to the Nation on Thursday evening, 9pm ET.

-Corporate Earnings: Australian quarterly production updates remain in focus: Rio Tinto is due on Jul 15th, BHP on Jul 16th. Tech corporate earnings are also coming into sharper focus. Taiwan’s Semi’s quarterly figures are due Jul 16th, while ASML’s results are due on the preceding day [Jul 15th]. Samsung seemingly disappointed markets when it reported Q2 sales figures in early July. Hynix is also seen reporting towards the end of the month, as the co’s shares have remained volatile in recent weeks. US bank earnings are, as always, expected to be keenly watched. JPMorgan reports Q2 results later on Tues, along with Goldman Sachs, Bank of America, Citigroup and Wells Fargo.

-US equity FUTs flat to +0.2% during Asia trading.

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

-Tue 14th July: (Tue night, US Jun CPI).

-Wed 15th July: KR Jun Unemployment Rate, CN Q2 GDP & Jun “Data Dump”, IN Jun Trade Balance, EU May Industrial Production, (Wed night, US Jun PPI, CA Rate Decision).

-Thu 16th July: KR Rate Decision, UK May GDP & Trade Balance, (Thu night, US Jun Advance Retail Sales).

-Fri 17th July: MY Q2 Advance GDP & Jun CPI, EU Jun Final CPI, (Fri night, US Jun Housing Starts, US Jun Industrial Production, US July Michigan Prelim Consumer Sentiment).

Holidays in Asia this week

-No holidays in Asia this week.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens -0.1% at 8,804.

-(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 75.3 v 74.7 prior.

-(AU) Australia July Westpac Consumer Confidence Index: 83.9 v 80.6 prior.

-(AU) Australia Jun NAB Business Confidence: -5 v -14 prior.

-(NZ) New Zealand NZIER Business Opinion Survey: Q2 Business Confidence: +8% v -4% q/q, Net 54% of businesses expect to raise prices in Q3.

-(NZ) RBNZ’s Conway (chief economist): Middle East conflict has complicated monetary policy; Even though oil prices have eased, the effects of the shock will continue to reverberate through the economy for some time yet.

-(NZ) New Zealand May Net Migration: 1.9K v 3.1K prior.

-(NZ) New Zealand sells NZ$7.0B v NZ$5.0-7.0B indicated in 4.75% May 2038 Bonds via syndication.

China/Hong Kong

-(CN) Shanghai Composite opens -0.1% at 3,909; (HK) Hang Seng opens -0.1% at 24,182.

-(CN) China Jun trade balance: $125.6B V $120.4BE (beats prior record high of $114B in Dec 2025).

-(CN) China Jun trade balance (CNY-denominated): 859.05B V 723.98B PRIOR.

-(HK) 2476.HK* demand for ai-related PCB products is strong.

-(CN) Follow Up on China's Jun trade data: China monthly car exports ‘surge’ past 1M units - FT.

-(CN) China Customs Vice Minister: This year increase in China's trade has been strong, momentum stable.

-(CN) China said to 'ramp up' IPO scrutiny for sponsors and brokers - Securities News.

-(CN) China expels Politburo member Ma Xingrui from the Communist Party Public Office - Xinhua.

-(CN) China “National Team” ETF saw the most inflows in 15 months on Mon – US financial press.

-(CN) Large banks in China said to have dismissed rumors of SOE banks offering high-interest deposits in order to attract customers; the banks mentioned included Ag Bank and China Construction Bank – Chinese press [update].

-(CN) IDC [International Data Cooperation]: Global Q2 smartphone market shipments to 277.5M, -6.7% y/y.

-(CN) AI homework tools cut exam scores by 20%, cites study of 26K students in China - SCMP.

-(CN) Chinese Government delegation to visit North Korea between July 15-17th - KCNA.

-(CN) China PBOC sets the yuan mid-point at 6.7990 v 6.7972 prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY237B in 7-day Reverse Repos; Net injects CNY227B v injects CNY217B prior.

Japan

-(JP) Nikkei 225 opens -0.4% at 67,003.

-(JP) Japan Fin Min Katayama: Time to consider including JGBs in NISA (Nippon Individual Savings Accounts).

-(JP) Japan sells ¥700B VS. ¥700B indicated in 20-year JGB bonds; AVG yeild: 3.6260% V 3.5420% prior; bid-to-cover: 4.52X V 2.97X prior.

-(JP) Japan Trade Min Akazawa: Decline to comment on Trump remarks on Hormuz fees.

-(JP) Japan Health Min Ueno: GPIF makes investments for benefit of uninsured.

-(JP) Japan Chief Cabinet Sec Kihara: Diet should decide on session extension.

-(JP) BOJ Dep Gov Himino: Reiterates bond buying decision is separate from monetary policy - parliamentary testimony.

-(JP) Japan May Final Industrial Production M/M: 0.1% v 0.5% prelim; Y/Y: -2.1% v -1.7% prelim.

-(JP) Japan Econ Min Kiuchi: Not true that Japan fiscal plan has been delayed over wording adjustments.

-(JP) Benchmark 10-year JGB FUTs down -0.17pts in early trading.

-(JP) SocGen sees ~$76B of JGB purchases if pension fund GPIF rebalances its assets.

-(JP) Japan reportedly considers self-driving vehicle network of up to 10K cars by FY30 - Nikkei.

-(JP) BOJ Dep Gov Himino to speak in parliament after 11:36am local time (02:36 am GMT).

Korea

-(KR) Kospi opens -0.6% at 6,769.

-(KR) Korea exchange activates sidecar to halt Kospi trading.

-(KR) South Korea MOF raises 2026 growth forecast to 3.0% v 2.0% prior; South Korea to ease FX rules on capital transactions significantly.

-(KR) South Korea Jun foreign net investment in local bonds +$1.65B v +$5.68B m/m.

Other Asia

-(IN) India JUN CPI Y/Y: 4.4% V 4.2%E (4th straight month with annual pace within target) [EU market close].

-(SG) Singapore Q2 advance GDP Q/Q: 1.1% V 1.3%E; Y/Y: 5.7% V 5.6%E.

-(SG) Singapore Foreign Ministry: Foreign Min Balakrishnan to visit US on July 14-16th.

North America

-(US) Fed's Waller (voter): Concerned about elevated pace of core inflation; If there is another hot reading on core inflation this week, we'll need to consider a rate hike in the near term [US market close].

-(US) White House plans to bring together utility companies and data center developers for a voluntary pledge designed to ensure rapid growth in electricity demand from AI does not drive up power bills for households and businesses - press [US market close].

-(US) White House Official: Trump Administration blocking American citizens in DR Congo from travelling to US on commercial flights due to Ebola risk.

-(US) To be a special S. Carolina GOP primary on August 11th following the passing of Senator Lindsey Graham (R-SC) - S. Carolina Election Commission.

-(US) US CFTC: Has approved final rule amending margin requirements for uncleared swaps.

-(US) Former IMF advisor says US dollar does risk rising, but another Plaza Accord coordination unlikely as "not feasible now" - SCMP.

-(US) Bankers said to be seeking to sell stakes this summer in US data center plays Netrality, EDGE, Databank, with Databank majority stake deal maybe as high as $25B - WSJ.

-(VE) Venezuela's Top Economic Advisor Calixto Ortega: In the coming weeks we will present a sustainability analysis of necessary debt for restructuring [from the Venezuelan earthquake on the 24th June].

-(VE) Venezuela Interim President Delcy Rodriguez: Oil production at 1.20M bpd, annual output target unchanged.

Europe

-(UR) Ukraine reportedly hits 7 tankers in Sea of Azov - press [EU market close].

-(UR) Ukrainian Senior Officials: Ukraine's capital Kyiv is under attack from Russian ballistic missiles.

-(UK) First Minister recommends that Wales be given additional tax powers - FT.

-(UK) Jun BRC Like-For-Like Sales Y/Y: 1.7% v 3.4% prior.

-(IE) Ireland Jun Construction PMI: 45.4 v 50.2 prior (moves back into contraction).

Middle East

-(IR) Reportedly, US Pres Trump notified Congress of a new war against Iran – Politico [US market close].

-(IR) Pres. Trump: Reinstates the Iranian blockade; Intends to take 20% of all cargo shipped as reimbursement for providing security - Truth Social [US market close].

-(IR) US Navy-Led JMIC: US Military will begin enforcement of a Naval blockade of all Iranian ports and Iranian coastal areas on July 14th, 8pm GMT [US market close].

-(IR) Iran: Hormuz Strait bill introduced in parliament overnight.

-(IR) US Pres Trump: Think the Iran situation is going very fast; Reiterates that US is engaging with 'a very major attack' on Iran tonight; Believes the US will have complete control of the Strait of Hormuz by the end of the conflict; Still believes a deal with Iran is possible.

-(IR) UAE Defense Ministry: Two national tankers targeted by two Iranian cruise missiles in Southern Strait of Hormuz; One Indian crew member killed on tanker, eight others wounded - post on X.

-(US) US Sec of State Rubio to meet with Jordanian Dep PM at 4pm ET on Tuesday, 14th July 2026.

-(IR) US Dept Energy: Yesterday 8.5M barrels of oil transited the Strait of Hormuz - statement to CNBC [US market close].

-(IR) US CENTCOM: US forces struck a submarine and ship maintenance facility in Iran on Sunday; This is the first time that the US employed sea drones in combat [US market close].

-(IR) CENTCOM: Confirms US forces did NOT strike Kharg Island in Iran [US market close].

-(IR) Kpler's Amena Bakr: US has directly struck Kharg Island oil infrastructure (western jetty pumping station + pipelines) — first confirmed hit on Iran’s core export terminal; fires visible via satellite. [EU market close].

- (IR) Iran Top Joint Military Command: To leaders of regional countries, any cooperation with the U.S. will be considered war against Iran - IRIB [EU market close].

- (IR) Iran's IRNA: Won't be forced to pay 'enemy' for ship passage - cites advisor to Supreme Leader Mokhber [EU market close].

-(AE) Dubai plans new port and container terminal in Fujairah to bypass Strait of Hormuz; Initial investment hundreds of millions of dollars, completion possible within 1.5 years - FT [EU market close].

-(IL) Israel Jun Trade Balance: -$4.0B v -$3.8B prior [EU market close].

-(IR) Reportedly US Centcom plans for multiple days of strikes against Iran; Targets include coastal surveillance system, drone and missile capabilities - Axios.

-(IR) US Centcom: Began launching third night of strikes against Iran at 4.45 pm ET.

-(IR) Iranian State Media reports that Iranian army has targeted US military facilities and equipment in Kuwait with drones and a 'hostile' US vessel with cruise missiles - press.

-(IR) Iran Mehr News Agency: Several areas in Southwestern Iran's Khuzestan's Omidiyeh hit by US projectiles.

-(IR) IRGC: Two 'offending supertankers' were hit and disabled in Strait of Hormuz - Iranian Media.

-(IR) IRGC: Targeted weapons warehouses, satellite communications centre and US forces' housing building at Bahrain's Juffair base.

-(IR) UKTMO: Receives report of a tanker being hit by unknown projectile 40NM northeast of Qalhat, Oman.

-(IR) Bahrain's Interior Ministry: Sirens sounded in Bahrain.

-(IR) IRGC: [Confirms] Targeted US air base in Jordan with ballistic missiles - FARS News.

-(IR) Jordan: Intercepted and downed four missiles that entered Jordanian airspace from Iranian territory - State News Agency.

-(IR) Bahrain's Interior Ministry: Sirens sounded in Bahrain.

-(IR) IRGC: [Confirms] Targeted US air base in Jordan with ballistic missiles - FARS News.

-(IQ) Iraq PM: Government plans to 'significantly' increase oil production within three years - State News Agency.

Levels as of 01:20 ET

Nikkei 225 +0.7%; ASX 200 -0.1%; Hang Seng +0.2%; Shanghai Composite +0.6%; Kospi +1.6%.

Equity S&P500 Futures flat; Nasdaq100 +0.2%; DAX -0.4%; FTSE100 -0.1%.

EUR 1.1397-1.1378; JPY 162.49-162.23; AUD 0.6936-0.6913; NZD 0.5796-0.5748.

Gold +0.5% at $4,022/oz; BTC +0.1% at $62,858; WTI Crude Oil +2.1% at $79.80/bbl; Copper +1.6% at $6.3790/lbs.