Risk appetite grows in Asia – Hynix +8% while Trump more positive today

Asia market update: Risk appetite grows in Asia; Hynix +8% while Trump more positive today; Mixed CN data; BOK may hike tomorrow; US Jun PPI tonight.

General trend and developments

-Two-way volatility out of Korean equities continues but today on the good side of the ledger with the Kospi as much as +8% and back above 7K. Hynix up as much as 11% in Seoul, closing some of the 50% premium that opened up overnight after the company’s ADRs +27% during US trading. Not even South Korea Pres Lee’s party-pooper comments that “The South Korean stock market is quite unstable” could put a dent in Korean equities. Economically, South Korean import prices fell at their fastest pace in more than three years on the fall in crude oil prices. Japan’s Nikkei also +1.2%.

-The good cheer spread to the Nasdaq, +0.8% in the Asian session and now trading back at Friday’s closing levels, undoing all of the Middle East-led price declines seen on Monday. Sentiment assisted by the revelation that Stripe and Advent International have made a $53B play for PayPal, although PayPal reportedly yet to respond. ASML also beat Q2 estimates and sharply raised FY26 Rev outlook. CEO said customers are increasing Capex and accelerating plans.

- Market also helped by the unexpectedly soft US CPI figures in June leading to Fed expectations of a July rate hike falling from 42% to 17%.

- Although US-Iran continued to attack each other, there were positive signs from Pres Trump today, continuing to offer an olive branch to Iran, saying that US meetings with some Iranian representatives were ongoing, while holding off on attacking energy facilities. Crucially, Trump also said he decided to replace the 20% US “Reimbursement Fee” with Trade and Investment deals by various Gulf States into the US.

- China’s data dump was a mixed bag. Q2 GDP was below target although YTD growth remains in the middle of China’s 4.5-5.0% target, while Industrial Production saw the fastest growth since March, back above 5% but components such as power generation and refinery runs were weaker, with the Stats Bureau still warning of an uncertain external environment. Retail Sales was the real surprise, with no explanation as yet from the authorities as to what fueled the fastest retail growth since February (+1.0%). Fixed Assets Investment continued to plumb the worst depths reached during Covid along with even worse Property Investment in June and even Beijing new home prices continuing to fall.

- Amid unexpectedly cool US CPI figures for June (Core CPI at 0.0%), collectively the major US banks (JPMorgan, Goldman Sachs, Citi, Bank of America, and Wells Fargo) reported record second-quarter profits totaling $49B, well surpassing Wall St estimates, driven by surging investment banking fees from a robust deal-making environment (including the SpaceX IPO) and healthy trading revenues amid ongoing geopolitical volatility.

-IBM suffered record -25% losses in a single day after warning its Q2 results will fall short of estimates as clients shift spending away from software to servers, storage and memory ahead of expected price increases. IBM’s misfortune was to the benefit of Dell, Hewlett Packard Enterprise, Lenovo and other server infrastructure vendors as US corporates pick up the pace in rolling-their-own AI infrastructure rather than remaining beholden to the US frontier AI labs’ high token prices amid token-maxxing and question marks on access to top AI models due to US govt involvement. Nvidia rose to one-month highs as the market recognized the overwhelming enterprise demand for hardware. -Tech corporate earnings are also coming into sharper focus, with Taiwan Semi’s quarterly figures due tomorrow (July 16th).

- Alibaba Cloud cut Zhipu's GLM-5.2 Fast Mode pricing by 20%, as US and CN AI markets continue to compress margins for top AI models. Comes as competing LLM developer DeepSeek said to be preparing for IPO filing in Shanghai next year.

- Coreweave unexpectedly said to be exploring using derivatives (possibly put options and other types) as a hedge against any future drop in memory / storage chip prices.

- In Australia Rio Tinto affirmed output guidance with BHP to report quarterly mining results tomorrow.

-Bank of Korea (BOK) rate decision tomorrow sees markets pricing in an 89% probability of a 25bps hike, while bond market surveys show up to 66% of professional traders anticipating a tightening. Would be the first hike in three and a half years of pauses. CPI also hit a 2.5-year high of 3.2% in June (well above BOK’s 2% target). Governor Hyun-song has also signaled that interest rates must rise to address growing inflationary pressures, financial stability risks, and housing market overheating. Then just yesterday South Korea MOF raised its GDP forecast from 2% to 3%, bolstered by strong chip exports.

- Japanese yields softer again following Fin Min Katayama’s follow up comments yesterday on aiming to increase the purchasing base of Japanese JGBs, with the benchmark 10-year yields back below 2.7% for the first time since late June.

-US equity FUTs +0.2% to +0.7% during Asia trading.

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

- Wed 15th July: 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 +0.6% at 8,864.

-(NZ) New Zealand Jun Total Card Spending M/M: -1.2% v 2.2% prior.

-(NZ) New Zealand Biosecurity Minister: H5 bird flu confirmed in New Zealand.

China/Hong Kong

-(CN) Shanghai Composite opens -0.1% at 3,963; (HK) Hang Seng opens +0.9% at 24,551.

-(CN) China Q2 GDP Q/Q: 0.9% V 0.9%E; Y/Y: 4.3% V 4.5%E [slowest annualized growth since Q4 2022].

-(CN) China Jun Retail Sales Y/Y: 1.0% V -0.1%E [fastest growth since Feb].

-(CN) China Jun industrial production Y/Y: 5.3% V 4.6%E [fastest growth since Mar].

-(CN) China Jun YTD fixed urban assets Y/Y: -5.7% V -5.0%E [largest contraction since 2020].

-(CN) China Jun New Home Prices M/M: -0.2% v -0.2% prior.

-(CN) China Jun Surveyed Jobless Rate: 5.0% v 5.1%e.

-(CN) China Jun YTD Property Investment Y/Y: -18.0% v -16.8%e.

-(CN) China NBS [China stats agency]: Notes H1 economic operations still within reasonable range but (still) many external uncertainties - comments post-Jun "data dump".

-(CN) China sells 30-Year ultra-long special bonds at 2.2529% v 2.2723%.

-(CN) Follow Up: China increases holdings of US Treasuries despite diversification trend [cites the May US TIC flows data], the holdings rose after hitting an 18-year low in Apr - SCMP.

-(CN) China operated mine warns Pakistan copper project faces freeze over ‘insurgency’ - FT.

-(HK) Hong Kong's audit watchdog said to target "idle firms", stepping up their scrutiny; Aims to boost capacity - press.

-(HK) 9988.HK Alibaba Cloud cuts Zhipu's GLM-5.2 Fast Mode pricing by 20%.

-(CN) China PBOC sets the yuan mid-point at 6.7910 v 6.7990 prior (strongest since Feb 10th, 2023 and boosting Yuan fixing by most since April as dollar drops).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY427B in 7-day Reverse Repos; Net injects CNY412B v injects CNY227B prior.

Japan

-(JP) Nikkei 225 opens +0.5% at 68,047.

-(JP) Japan May Core Machine Orders M/M: -12.4% v -4.2%e; Y/Y: -1.9% v +12.3%e.

-(JP) Japan May Tertiary Industry Index M/M: 1.1% v 0.4%e.

-(JP) With regards to the BOJ certain transcripts have been released from 10 years ago – US financial press.

-(JP) Japan panel to forgo reaching consensus on food tax cut and will therefore release an interim summary of opinions instead; notes continued opposition by non-ruling parties - US financial press.

-(JP) Japan FSA reportedly to survey regional banks on interest rate risks - Nikkei.

-(JP) Japan Dep Chief Cab Sec Ozaki: Refrain comment on effect of Mideast on Japan economy.

-(JP) Japan May Tertiary Industry Index M/M: 1.1% v 0.4%e.

-(JP) Japan reportedly considers lifting ban on US potato imports - Nikkei.

-(JP) Tokyo said to be considering to host a New York University campus - Japan press.

-(JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 3~5 Years; >25 years; (Inline with planned amounts for Q2, 2026).

-(JP) Bank of Japan (BOJ) Results related to today's outright bond buying operations.

Korea

-(KR) Kospi opens +3.3% at 7,082.

-(KR) South Korea's President Lee: South Korean stock market is quite unstable; It'll take time for South Korea stock market to stabilize - Government Briefing.

-(KR) Follow up: South Korea President Lee urges Korea Exchange to swiftly draw up ETF safeguard.

-(KR) South Korea Finance Minister: To prepare measures, system for offshore won trading by early next year.

-(KR) South Korea Finance Chief: Working to keep CPI under 3% in H2 - briefing to South Korea President Lee.

-(KR) South Korea FSC: South Korea money moving towards productive finance [away] from properties - Statement.

-(KR) South Korea Jun Unemployment Rate: 2.7% v 2.8%e.

-(KR) South Korea reportedly sets 2027 Min Wage at KRW10,700/hr, +3.7% y/y - Korea press.

-(KR) South Korea Jun Export Price Index M/M: 0.0% v 0.3% prior; Y/Y: 48.9% v 46.9% prior.

-(KR) South Korea May M2 Money Supply M/M: 0.8% v 0.6% prior.

-(KR) 005380.KR Follow up: Co with POSCO lead "MySteel Global" consortium to develop next-gen electrical steel for EV Motors - Korea press.

-(KR) South Korea's FuriosaAI said to be raising >$500M at >$2B valuation - Theinformation.

-(KR) South Korea government is seeking to raise the foreigner-only casinos’ fund contribution cap from 10% to 15% of sales – Local press.

-(KR) Korea exchange activates sidecar following Kospi FUTs rising by +5%, programme trading halted for 5 minutes; Korea exchange activates sidecar following Kosdaq 150 FUTs rising by +6%, programme trading halted for 5 minutes.

Other Asia

-(MY) Malaysia's Deputy Finance Minister Amir: Government remains committed to strengthening fiscal sustainability - Parliamentary Comments.

-(MY) Malaysia Dep Energy Min: To prioritize strengthening, expanding use of existing renewable energy sources - Parliamentary Comments.

-(TH) Thailand plans higher electricity tariff charges for data centers.

-(ID) Indonesia May External Debt: $444.4B v $439.8B prior.

-(PH) Philippines May Overseas cash remittances: $2.7B v $2.7B prior; Y/Y: 2.0% v 2.0% prior.

-(IN) IKEA to open 25 stores in India by end of decade, investing INR110B by 2030 - India press.

North America

-(US) JUN CPI M/M: -0.4% V -0.1%E; Y/Y: 3.5% V 3.8%E; Core CPI M/M: 0.0% v 0.2%e; Y/Y: 2.6% v 2.8%e [US market close].

-(US) US Fed Chair Warsh: Doesn't believe that 'everything is swell' after today's CPI report; Want to see more broad-based economic growth; We want the rise in inflation to be more limited; Fed has the tools to deliver price stability - Q&A [US market close].

-(US) PYPL* said to have received >$53b joint offer from Stripe and Advent International earlier in July at $60.50/share - financial press, citing sources.

-(US) Fed Chair Warsh congressional (house) testimony released; does not comment on outlook for interest rates; Fed has no tolerance for persistently elevated inflation [US market close].

-(US) US Senators release text of updated Russia Sanctions Bill negotiated by Trump and the late Senator Lindsey Graham - press [US market close].

-(US) Fed's Goolsbee (non-voter): June CPI data was surprisingly benign; Would feel better with several more months of this [US market close].

-(US) Jun Real Avg Hourly Earning Y/Y: +0.3% v -0.8% prior [US market close].

-(US) Atlanta June Sticky-CPI (1-month annualized) 0.8% v 2.9% m/m; Core Sticky CPI (1-month annualized) 0.7% v 2.9% m/m [US market close].

-(US) DOE directs PJM to dispatch specified units to 'secure grid' - financial press.

-(US) Fitch Ratings Records First U.S. CLO 2.0 Note Default After Investor Action - Press.

-(US) US CMS Proposes Transformational Medicare Reforms to Expand Accountable Care, Modernize Physician Payment, and Shift from Sick Care to Healthcare.

-(US) US House votes to confirm daylight savings time as permanent, sends bill to Senate.

-(US) Weekly API Crude Oil Inventories: -0.6M v -0.4M prior.

-(US) CRWV *Said to be exploring using derivatives as hedge against any future drop in memory, storage chip prices - US financial press, citing sources.

-(US) IBM *Reports prelim Q2 $2.93 v $3.02e, Rev $17.2B v $17.9Be; Says z17 played out was worse than expectations; In the last few weeks of June, saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases - investor letter [US market close].

-(CA) Bank of Canada (BOC) reportedly cancels Wednesday media lockup due to worker protest.

-(MX) Mexico Jun Nominal Wages Y/Y: 7.2% v 7.9% prior [US market close].

-(MX) Mexico June ANTAD Same-Store Sales Y/Y: -1.6% v +0.8% prior.

-(BR) Brazilian Official: Talked trade with USTR Greer earlier today.

Europe

-(EU) EU said to propose easing banks capital requirements this week - FT [EU market close].

-(PL) Poland Central Bank's Zarzecki: Rate hike is more likely than a cut for next move; Wouldn't support rate cut this year [EU market close].

-(UR) Ukraine to purchase Chinese drone parts with EU defense loan - FT.

Middle East

-(IR) President Trump: We'll be striking Iranian power plants and bridges next week; Bombings will continue until he says otherwise; Believes objectives have been met; Will discontinue bombing if Iran comes to the negotiating table, but he doesn't want to negotiate right now - pre-recorded Fox News Interview.

-(US) Pres. Trump: Have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States - Truth Social [US market close].

-(IR) US Energy Sec Wright: We've to ensure oil can flow out of the Gulf; Reiterates 20% fee imposed at the Strait of Hormuz is off the table.

-(IR) Iran war cost could be as much as $100B - NBC.

-(IR) IRGC: Strait of Hormuz will remain closed until 'end of America's evils'; 'Set fire to and destroyed' US military logistics and support center in Kuwait's Mina Abdullah; Destroyed US fifth fleet command, fuel and equipment facilities in Bahrain.

-(IR) Follow up: President Trump held situation room meeting on Iranian strikes on Tuesday [14th July, 2026]; White House declined comment - Axios.

-(IR) CENTCOM: Completes more strikes against Iran - post on X.

-(IR) CENTCOM Commander: Iran has intentionally targeted civilians across the region by attacking seven commercial ships.

-(IR) Iran's Mehr: Sounds of explosions heard in maritime area of Eastern Hormozganh and Sirik.

-(IR) Iran's IRIB: US strike hit a wheat storage silo in Iran's Hoveyzeh early on Wednesday.

-(IR) Kuwait's Fire Force: Blaze at one site brought under control after it was targeted in Iran attacks, no injuries reported - Kuwaiti State News Agency.

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

-(IR) Jordanian Army: Air defenses intercepted and shot down three ballistic missiles that entered Jordanian airspace from Iran early on Wednesday.

-(IL) Israel PM Netanyahu: Any new attack by Iran will draw a much stronger response [EU market close].

-(IQ) US State Dept Official: US is supporting efforts by Iraq and Syria to increase interconnectivity and build future routes for trade and prosperity.

Levels as of 01:20 ET

Nikkei 225 +1.1%; ASX 200 +0.3%; Hang Seng +1.3%; Shanghai Composite -0.1%; Kospi +6.3%.

Equity S&P500 Futures +0.2%; Nasdaq100 +0.7%; DAX -0.3%; FTSE100 -0.3%.

EUR 1.1443-1.1418; JPY 162.27-161.97; AUD 0.6993-0.6970; NZD 0.5826-0.5806.

Gold -0.7% at $4,027/oz; BTC +3.2% at $64,730; WTI Crude Oil +0.6% at $79.81/bbl; Copper +0.1% at $6.3700/lbs.