SpaceX, GOOG weigh on tech sentiment

Asia market update: SpaceX, GOOG weigh on tech sentiment; KR VOL continues; IDX MSCI in focus; US quantum compute EO.

General trend and developments

-SpaceX (bond issuance) and Google (top AI talent leaving) led tech weakness during the US session, with the Nasdaq down -1.3%, which continued into the Asia session with the tech index down a further -1.3%.

-Gold, Silver, Bitcoin all joined US equity FUTs in unwinding all of yesterday's gains after Monday's US-Iran rally following the progress in Switzerland, even as WTI crude FUTs held its lows ~$73/bbl.

-Currencies also weaker, with even recent steady performer the Aussie falling below 70c, its lowest since April 8th

-Volatility weighing on Korean assets? (See analysis further below).

-No developments fresh developments on Iran, but with the majority of inbound vessels disabling transponders ships and actively "going dark", tracking of ships and oil through the Strait of Hormuz is challenging.

-Note that MSCI is due to decide as soon as tomorrow whether to downgrade Indonesia to a 'frontier market' status or retain current 'emerging market' status - a threat that has been weighing over the Indonesia bourse and currency since MSCI's warning in January of this year.

Kospi again volatile, down as much as -6% today, with several factors weighing on the market even as the Kospi 200 has rocketed from ~2.5K to >9K in just 15 months.

-South Korea’s chip giants are finally expected to disclose their domestic investment plans on Jun 25th [Thursday]. Previously, both Hynix and Samsung have pledged to pursue hundreds of trillions of Korean Won in local investments over multiple years.

-The recent Korea govt proclamations on potential AI windfall profits and ongoing labor concerns may also be factors. Korea MOF today again warned on the “excessive” weakness of the Korean Won (KRW).

-Further, with SpaceX down another 16% and closing at $155,the stock is now below the lowest market price seen on its IPO day. South Korean (along with Japanese) investors took a large amount of the Space X IPO private placement.

-South Korea’s $350B US investment pledge as part of its US trade deal continues to be overhang for the markets.

-President Trump announced an Executive Order targeting September, 2028 for a US-built research-grade quantum computer, as the Trump Admin aims to accelerate the overhaul of US cyber defense and likely setting up the next frontier in the global tech wars with China. The announcement was aspirational, with no fresh announcement of investment. (Reminder on May 21st the Trump Admin awarded $2B from the CHIPS Act to nine US quantum computing companies). One of the US quantum startups, Infleqtion, welcomed the order, reiterating the importance of the US winning the competition to turn quantum computing from experimental technologies and proof of concepts into scalable computing that can replace classical (bit) computing.

-Comes as China and the US engage in tit-for-tat recently on technology export lists and domestic high-tech subsidies amid warnings from the Pentagon last year that China is accelerating quantum technology as a 'key' to future warfare, harnessing companies such as Alibaba Quantum, Baidu Quantum, Huawei HiQ, alongside specialized firms such as Origin Quantum, Ciqtek, and SpinQ.

-Note that the Japanese Yen briefly spiked higher during NY morning, threatening to pierce the 2024 lows of 162 before rising sharply by 80 pips in just two or three minutes to 161.10, then falling again to near 162 before settling around 161.50. Japan Fin Min Katayama confirmed holding a one-hour call with US Treasury Sec Bessent to discuss the Yen, but again refused to be drawn on specifics, reaffirming that Japan-US have a preexisting agreement on taking decisive FX steps when needed.

-Traders remain worried about high input costs as the Yen hovers near 40 year lows likely not happy to see Japanese input costs rise at their sharpest since 2022 as per Japan’s June prelim PMI’s today. Steeper increases in new orders were seen across both the manufacturing and service sectors but analysts continue to doubt the PMI figures due to the war and stockpiling impact. For the record, Japan prelim Manufacturing PMI rose for a 6th month of expansion, while the PMI Services also held its 19th month of expansion.

-Australia prelim PMIs saw manufacturing improve for its third month of expansion, although Services remained a touch negative for a second month.

-Japan govt said to be aiming to "guide" 40% of household assets into stocks, investment trusts and bonds by 2040 (currently around 23%).

-US equity FUTs -0.1% to +0.1% during Asia trading.

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

-Tue Jun 23rd: (Tue night, European and US Jun Prelim S&P PMIs).

-Wed Jun 24th: AU May CPI, JP BoJ Summary of Opinions, TH Rate Decision, (Wed night, US May Final New Home Sales).

-Thu Jun 25th: AU May Jobs, US Fed Bank Stress Test Results, US May Core PCE.

-Fri Jun 26th: JP Jun Tokyo CPI.

Holidays in Asia this week

-Fri Jun 26th: India.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens +0.2% at 8,826.

-(AU) Australia Jun Preliminary PMI Manufacturing: 51.2 v 50.7 prior (3rd month of expansion).

-(AU) Australia Greens party to support amended Australia tax package as regards property - Statement.

-(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 72.8 v 70.7 prior.

China/Hong Kong

-(CN) Shanghai Composite opens -0.2% at 4,154; (HK) Hang Seng opens +0.1% at 23,800.

-(CN) World Economic Forum China ("Summer Davos") conference: Hyperscaler/AI infrastructure capex expected to exceed $820B in 2026, with cited outlays of Amazon ~$200B, Alphabet ~$190B and Microsoft ~$190B; including buybacks and related spend, the figure was framed as approaching ~$1T this year and on a multi-trillion-dollar path.

-(CN) China Summer Davos Comments [being held Jun 23-25th]: Peking University/PBOC Adviser Huang Yiping: [Reiterates] China need to boost consumption in more aggressive way and make its economy more balanced; Other nations struggle to accommodate China exports.

-(CN) China said to pursue austerity; cites the narrowing budget deficit – US financial press.

-(CN) US brokerage firm said China might increase bond sales; the implementation of the CNY800B policy bank financing tool might also be accelerated – US financial press.

-(CN) China-linked ‘National Team’ ETFs post outflows – US financial press.

-(CN) Dim Sum bond issuance seen to further expand as demand for Yuan funding increases - China Securities Journal.

-(CN) Follow up: China's 618 shopping festival growth slows sharply as consumer spending Malaise persists - CNBC.

-(CN) China PBOC sets the yuan mid-point at 6.8171 v 6.8150 prior (weakest level since June 8th, 2026).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY525B in 7-day Reverse Repos; Net injects CNY75B v drains CNY342B prior.

Japan

-(JP) Nikkei 225 opens +0.1% at 72,456-(JP) Japan Jun Preliminary PMI Manufacturing: 54.9 v 54.5 prior (6th month of expansion).

-(JP) Japan Sells ¥2.5T vs. ¥2.5T indicated in 5-year JGB bonds; Avg yield: 1.905% v 2.0240% prior; Bid-to-cover: 3.11x v 3.22x prior.

-(JP) Follow up: Japan Fin Min Katayama confirms held online talks with US Treas Sec Bessent on Monday.

-(JP) Japan Chief Cab Sec Kihara: Will take appropriate action against FX moves if needed; No comment on FX.

-(JP) Japan govt said to be aiming to "guide" 40% of household assets into stocks, investment trusts and bonds by 2040 (currently ~23%).

Korea

-(KR) Kospi opens -0.3% at 9,083.

-(KR) Korea Exchange activates sidecar to halt Kosdaq program selling, program trading halted for 5 minutes.

-(KR) South Korea Finance Minister: Reiterates current FX level excessive.

-(KR) South Korea Jun Consumer Confidence: 106.6 v 106.1 prior.

-(KR) North Korea Leader Kim: Will exercise North Korea's status as a nuclear power; US and South Korea engage in the most dangerous acts through 'a nuclear war agency'.

Other Asia

-(ID) MSCI reportedly to decide on downgrading Indonesia to 'frontier market' status or retain current 'emerging market' status on June 23rd, (Wed).

-(SG) Singapore May CPI M/M: 0.7% v 0.8%e; Y/Y: 1.8% v 2.0%e.

-(IN) India Jun Preliminary PMI Manufacturing: 54.5 v 55.0 prior (60th month of expansion).

-(IN) India May Eight (Key) Infrastructure Industries: 0.5% v 1.8% prior [EU market close].

-(IN) India Central Bank (RBI) Monthly Bulletin: India inflation still anchored despite pick up in May (update).

-(TH) Thailand's Baht weakens to 33.095/USD (lowest since May 20th, 2025).

-(ID) Indonesia Mar M2 Money Supply Y/Y: 10.8% v 9.2% prior.

-(ID) Indonesia unveils IDR26.3T stimulus; Effective H2, 2026 (update).

-(MY) Malaysia Finance Ministry: Eligible users to get up to 200 litres of subsidized fuel monthly for diesel or Ron95.

-(MY) Malaysia Trade Minister Ghani: Face potential 10% tariff risk on alleged forced labor issues after July 24th, 2026 - Parliamentary Comments.

-(PH) US Embassy in Philippines: US government transferred four Ocean Aero Triton AUSVS to Philippines Military in transaction valued at $13M.

-(PH) Philippines Central Bank [BSP]: Provides relief to banks to help cushion Iran war impact; banks may exclude paper losses on peso-denominated government securities; effective Apr-Dec.

North America

-(US) US Pres Trump said to meet with defense contractors on Wednesday - press [US market close].

-(US) GOOGL Google DeepMind lost Nobel laureate and Gemini co-lead John Jumper to Anthropic, its third senior researcher to depart in as many months - press (update) [US market close].

-(US) SPCX Confirms to launch inaugural senior unsecured notes offering; Terms subject to market conditions [US market close].

-(US) US President Trump signs the National Quantum Initiative Act executive order (update).

-(US) Fed's Goolsbee (non-voter): Inflation is well above target and 'going the wrong way'; A stable market is still stable; We need evidence that this inflation is temporary, whether it will be persistent or not.

-(US) US Senate votes to pass housing bill to limit PE purchases of single-family homes.

-(US) US Fed Chair Warsh to testify before Financial Services Committee on July 14th at 10AM ET.

-(US) Pres Trump: Preparing lawsuits against ABC for 'false reporting' on Washington DC, Reflecting Pool - Truth Social post.

-(US) US Department of Agriculture: Reports new case of screwworm in a Texas goat, taking total number of domestic detections to 16 cases.

-(US) US court temporarily dismisses Trump Admin lawsuit against Los Angeles over immigration enforcement - US financial press.

-(US) US Coast Guard: Cause of Alaska crash under investigation; 4 crew members in Alaska helicopter crash are safe - Statement.

-(CA) Canada May CPI M/M: 1.0% v 0.8%e; Y/Y: 3.2% v 3.0%e; (ex-food/energy) Y/Y: 1.6% v 1.5%e [US market close].

Europe

-(UK) PM Candidate Burnham: Confirm will run for Labour leadership and PM - post on X [EU market close].

-(UK) Former Health Min Wes Streeting said to back Andy Burnham for PM - press (refutes earlier speculation about Streeting running himself) [EU market close].

-(EU) ECB Chief Lagarde: Sees no need for more forceful ECB response to Iran war; No evidence yet of de-anchoring or second-round effects that warrant a more forceful policy action - Parliamentary testimony [EU market close].

-(EU) ECB Chief Lagarde: Renminbi's underappreciation justifies discussions of excessive imbalances at the G7 [EU market close].

-(EU) Euro Zone Jun Advance Consumer Confidence: -17.7 v -18.0e [EU market close].

-(UR) Reportedly Ukraine and Japan are considering a reconstruction fund in the form of loans from Japan's International Cooperation Agency, as well as Hitachi and Toshiba - Nikkei.

-(UK) Announces Global Urban Data Centres Pact, due to be launched at London Climate Action Week, on Tuesday 23rd June, 2026; the mayors are seeking to curb the burden of data centers on utilities.

-(NL) Netherlands to open €1.5T of pensions markets to international providers - FT.

-(IE) Ireland May PPI M/M: 0.9% v 0.2% prior; Y/Y: 1.6% v 1.4% prior [EU market close].

Middle East

-(IR) US Treasury issues Iran-related general license, authorizing some sales of crude oil with Iranian origin (as expected) [US market close].

-(IR) JMIC (the maritime warning entity) lowers Hormuz maritime security threat level to Moderate [EU market close].

-(IL) Israel PM Netanyahu: Reiterates IDF will stay in Lebanon security zone for as long as needed [EU market close].

-(IR) VP Vance: We have made a lot of good progress in yesterday's talks with Iran; Set up a mechanism to keep Hormuz open - comments from Switzerland [US market close].

-(IR) Iran Foreign Min Araghchi: Tehran did not negotiate the nuclear issue and did not accept any new commitments in Sunday's talk in Switzerland [EU market close].

-(IR) Pres. Trump: "Everybody is fully aware that Iran will agree to have Major Weapons Inspections in order to ensure “Nuclear Honesty” long into the future." - Truth Social [US market close].

-(IR) Follow up: Iran Chief Negotiator Ghalibaf: Hormuz will be administered by Iran - IRNA.

-(IR) Iranian Central Bank Gov: Tehran is not obliged to purchase agricultural inputs from US under the existing agreements.

Levels as of 01:20 ET

Nikkei 225 -2.4%; ASX 200 -0.3%; Hang Seng -1.6%; Shanghai Composite -0.7%; Kospi -7.5%.

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

EUR 1.1432-1.1419; JPY 161.64-161.52; AUD 0.7007-0.6964; NZD 0.5725-0.5691.

Gold -1.5% at $4,129/oz; BTC -1.2% at $63,431; Crude Oil -0.3% at $73.64/bbl; Copper -1.7% at $6.2588/lbs.