Tech volatility driven by factors incl, KR holiday and Monday off for JP

General trend and developments

-US Nasdaq cash trading +FUTs prices have gone only one way for a full 24 hours now -- down. Semis, memory and hyperscaler jitters not helped by reports of Google’s latest Gemini AI model being delayed saw further -1.4% losses during Asian trading adding to the -1.5% losses in US regular trading.

-Asian tech stocks fared even worse, with the Nikkei turning into a rout, -6% and falling below 63K, its weakest in nearly two months. (Nikkei having lost well over -10% over the past month has entered into correction territory). Memory-maker Kioxia (-16% today) has seen its value fully halve from its June peak, with chip-related hit hard too; Tokyo Electron -10%, Softbank -12%, Advantest -12%, Sumco -15%, Screen -14%.

-South Korea’s holiday may have spared further tech weakness in terms of the Kospi, but markets likely still spooked by the Korea Financial Services Commission overnight decision to ban any more issuance of single-stock leveraged ETF/ETN listings after as many as 16 EFTs and two EFNs introduced since May 27th that track memory chip-makers Samsung/SK Hynix were judged to have amplified market price swings. (The 18 existing products are not banned and will remain actively traded). One of the Hynix' double-leveraged ETFs down as much as -18%.

-Hynix US ADRs down another -13% overnight, once again only just above its week-ago IPO offer price of $149, while SpaceX plunged way below its $135 offer price down to $127, following abort of major Starship test mission of Starship rocket 'moments' before liftoff.

-Things only got worse as the AI component of tech saw steep selling pressure as Pres Xi at the World AI Conference in Beijing all but confirmed that AI is joining the Chinese arsenal of industries that export deflation around the world (joining EV’s, steel, solar, batteries, textiles, shipbuilding, robotics, machinery and more). Heavy concerns around profitability of AI going forward as AI model-maker DeepSeek reportedly seeks to “flood the world with cheap AI". Pres Xi seems to be aiming for a ”digital Belt & Road” initiative that favors BRICS, Latin American and Africa as AI token exports emerge as a new trade weapon with Chinese press crows about "a new growth engine" for China.

-However, if followed through, the strategy will also damage China’s own AI companies' search for revenues and profits, with GLM 5.2 maker Zhipu / Z.AI down -25% and the Hang Seng AI index down more than -10%, lowest in nearly two years. Hang Seng Tech index -5%. SMIC -10%, Hua Hong -12%.

-As if all of the above wasn’t enough, Pres Trump at his National Address turned most of his ire at the evidence of 2020 election irregularities at China as he claimed China illicitly obtained US election data and asked the Dir of National Intelligence and the FBI to investigate China. All of this just a couple of months ahead of Pres Xi’s scheduled state visit to the US in September.

-TSMC reported a record Q2 last night, with 67.7% gross margins, FY26 growth targets lifted and raised CapEx to $60–$64B, unsurprisingly driven by surging AI demand. However, US ADRs traded at one-month lows due to projected Q3 margin pressure from heavy investments in 2nm ramps and overseas expansion.

-China PBOC made is biggest weekly net cash injection in its open market ops since January, 2023.
-Despite its use in AI infrastructure, Silver at around $55/oz is now touching levels not seen since early December, the start of its moonshot run to $120+. Meanwhile Gold below $4,000 is only a few dollars away from late June lows, at which point it will be down to early Nov levels.

-Weekend risk as Iran and US continue to trade kinetic attacks, with one attack on the port of Chabahar, Iran, coming more than an hour after US CENTCOM said it had already stopped its bombing for the evening. Bahrain, Kuwait, Jordan and Qatar all reporting attacks from Iran while report that the IRGC was in Yemen calling on the Houthis to shut access to the Red Sea if the US escalates attacks on Iran infrastructure.

-After hours earnings were also disappointing from some big US names; Netflix -9% on top-line miss and weak Q3 guidance; Intuitive Surgical -10.7% despite its top and bottom-line beats mentioning China remains challenging. Alcoa lower by -6% across regular and a/h trading on a top-line beat but bottom-line miss and with cuts in production guidance.

-US equity FUTs -1.5% to -0.9% during Asia trading.

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

-Fri 17th July: 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 -0.3% at 8,815.

-(AU) Australia sells A$700M v A$700M indicated in 1.00% Dec 2030 Bonds: Avg Yield: 4.4937% v 4.7049% prior; bid-to-cover 3.46x v 3.69x prior.

-(NZ) RBNZ Q2 GDP Nowcast Estimate declines to +0.1% v +0.9% w/w.

-(NZ) NZ Stats Agency: Jun Petrol prices were down 4.2 percent, while diesel prices decreased 12.1 percent. - update.

-(NZ) New Zealand Jun Non Resident Bond Holdings: 57.7% v 59.6% prior.

-(NZ) New Zealand Jun Food Prices M/M: 0.6% v 1.0% prior.

China/Hong Kong

-(CN) Shanghai Composite opens -0.5% at 3,865; (HK) Hang Seng opens +0.1% at 25,022.

-(CN) China Pres Xi: World has entered unprecedented period of AI innovations; Seize rare historic opportunity to encourage open-source AI - Opening Remarks at the World Artificial Intelligence Conference [WAIC].

-(CN) Follow up: China issues action plan for cooperative development of AI.

-(CN) TTN Preview: World Artificial Intelligence Conference [WAIC] 17th-20th July in Shanghai; Pres Xi Jinping to attend, with companies incl. Huawei, Siemens AG, Alibaba, Baidu, Tencent, Bytedance, DeepSeek, Moonshot, Zhipu and more.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY451B in 7-day Reverse Repos; Net injects CNY431B v injects CNY616B prior (strongest net cash injection via open market operations since January, 2023).

- (CN) China Pres Xi: Call for cooperation in energy and minerals with Kazakhstan; Should increase direct flights between countries [EU market close].

-(CN) China Commerce Minister (MOFCOM): [On British Steel] China firmly opposed and strongly disapproves of the UK government's decision to nationalize it.

-(CN) Follow Up: US President Trump China election claim marks ‘new front’ in the rivalry; cites analysts - SCMP.

-(CN) China June Net Commercial Banks Purchase of Forex $56.6B v $35.8B q/q; SAFE notes China plans to roll out a package of policies to further facilitate cross-border investments and financing.

-(CN) Follow Up: China SAFE [fx regulator] is set to rollout a new package of measures to further facilitate cross-border investment and financing – China Daily.

-(CN) China Jun FX Net Settlement - Clients (CNY-denominated): 391.3B v 285.0B prior.

-(CN) Mozambique considering China debt deal 'modeled' on Brazil accord - US financial press.

-(CN) A "top investor" in China says finance, not AI is the country's biggest bottleneck - US financial press.

-(CN) China should focus on more efficient computing power – Chinese press.

-(CN) China's National Medical Products Administration: Suspends import, sale, and use of Medochemie Ltd. Tramadol Hydrochloride capsules.

-(CN) China PBOC sets the yuan mid-point at 6.7934 v 6.7909 prior.

-(HK) HK-listed leveraged Hynix product [7709.HK] declines by >18%.

Japan

-(JP) Nikkei 225 opens -0.7% at 66,327.

-(JP) Japan Fin Min Katayama: No comment on specific FX levels; Ready to respond appropriately and "decisively" to currency moves at any time as needed.

-(JP) Japan govt said to put tax decision timing in the upcoming Honebuto ("big-boned" economic framework) - Nikkei.

-(JP) Japan Trade Min Akazawa: Hope Nvidia to work with Japan on physical AI further.

-(JP) Japan's largest energy generator JERA said to be considering US listing - US financial press, citing sources.

-(JP) Japan to introduce new bonus system for civil servants - Nikkei.

Korea

-(KR) Kospi closed for the 'Constitution Day' holiday.

-(KR) South Korea Financial Services Commission on leveraged ETF: To ban new single leveraged products from listing; To require retail investors to take additional courses on risks - press [EU market close].

-(KR) US said to be seeking share of Korean AI chipmakers' excess profits - Korea Press (update).

Other Asia

-(TW) 2330.TW Reports Q2 (NT$) Net 706.6B v 623.7Be, Op 766.6B v 463.4B y/y, Rev 1.27T v 1.27T prelim [EU market close].

-(MY) Malaysia Jun CPI Y/Y: 1.9% v 2.0%e.

-(MY) Malaysia Q2 Advance GDP Y/Y: 5.8% v 5.2%e.

-(MY) Malaysia Finance Ministry: New bill proposes establishing national trust fund corp to replace current panel structure.

-(IN) India Central Bank (RBI) Gov Malhotra: Macro fundamentals are strong.

-(IN) India PM Advisor Mohan: Urges India to seek more China investment and trade.

-(TH) Thailand Baht weakens to 33.685/USD, lowest level since late April 2025.

-(SG) Singapore Jun Non-oil Domestic Exports Y/Y: 20.7% v 28.7%e.

North America

-(US) Pres Trump Live Address to the Nation: China engaged in election-related activities in 2020.

-(US) White House: Will release classified US assessments proving that ballot-counting systems are vulnerable to comprise by China, Russia - Statement.

- (US) JUN ADVANCE RETAIL SALES M/M: 0.2% V 0.2%E; RETAIL SALES (EX-AUTO) M/M: -0.2% V -0.1%E [US market close].

- (US) JUN PENDING HOME SALES M/M: -5.4% V -0.5%E; Y/Y: 2.3% V 2.1% PRIOR [US market close].

- (US) JULY NAHB HOUSING MARKET INDEX: 34 V 35E [US market close].

-(US) Fed's Jefferson (voter): Current policy stance should support job market, allow inflation to resume decline toward 2% as tariff effects, energy prices pass through - Prepared Text on "Navigating Economic Shocks".

-(US) SPCX *Aborts major test mission of Starship rocket 'moments' before 13th liftoff attempt in test flight from Texas - US financial press.

-(US) Fed’s Logan (voter, hawk): Time to finish the job of restoring price stability; Some policy restriction is needed to help get us there; Modestly higher interest rates would better balance the outlook and risks [US market close].

-(US) Fed's Schmid (hawk; non-voter in 2026): Recent inflation data is encouraging, but recent data readings are too early to put too much weight on it; Inflation problem is not only about energy [US market close].

- (US) US lawmakers urge Trump administration to ban Chinese memory chips - FT [US market close].

- (US) MAY BUSINESS INVENTORIES: 0.3% V 0.3%E [US market close].

- (US) INITIAL JOBLESS CLAIMS: 208K V 217KE; CONTINUING CLAIMS: 1.805M V 1.818ME [US market close].

- (US) WEEKLY EIA NATURAL GAS INVENTORIES: +41 BCF VS. +40 BCF TO +49 BCF INDICATED RANGE [US market close].

- (US) JULY PHILADELPHIA FED BUSINESS OUTLOOK: 41.4 V 13.0E [US market close].

- (US) July New York Fed Services Business Activity: +8.7 v -10.1 prior [US market close]..

- (CA) Canada Jun Annualized Housing Starts: 239.0K v 255.0Ke [US market close].

-(US) Top Treasury Tax Official Kenneth Kies ousted after clashes with White House over IRS audits - WSJ.

-(US) YUM FDA recommends avoiding Taco Bell lettuce in MI, OH, WV, KY, IN - US financial press.

-(US) FDA: No confirmed Ebola cases in United States as of July 14th, 2026.

-(VE) Venezuela Interim President Delcy Rodriguez: 4,930 dead (v 3,811 prior) from earthquakes.

Europe

-(RU) Russia says it continued strikes at Ukraine's ports - IFX.

-(UK) IMF said to have warned incoming UK PM Burnham on the little room to increase public spending given the UK's challenging fiscal outlook.

Middle East

-(IR) IRAN REPORTEDLY TELLS YEMEN'S HOUTHIS TO CLOSE BAB EL-MANDEB GATEWAY TO THE RED SEA IF U.S. HITS POWER NETWORK - PRESS [EU market close].

-(IR) CENTCOM: US successfully completes new strikes in Iran; US hit dozens of Iranian military targets; US struck Iran coastal surveillance and air defense sites - post on X.

-(IR) Sec of Defense Hegseth: Reiterates Iran does not control the Strait of Hormuz. - post on X.

-(IR) IRGC: Launched attack on US command center in Syria's Al-Tanf - Tasnim.

-(IR) Follow up: Iranian Army: Targeted US force deployment and logistical support centres in Kuwait in drone attack - Iran State Media.

-(IR) Iranian Army: Targeted US helicopters, reconnaissance aircraft at Sakhir base in Bahrain in drone attack - Tasnim.

-(IR) US CENTCOM: Carrying out new strikes on Iran - X post; US began launching strikes on Iran at 14:00EDT [US market close].

-(IR) IEA Chief Birol: Reiterates we should be worried about oil and gas security if flows through Strait of Hormuz, war in Iran, do not improve in the next few weeks.

-(IR) Three explosions said to be heard in Iran's Chabahar - Iran State Media.

-(IR) Bahrain Interior Ministry: Siren has been sounded (again) - post on X.

-(IR) US CENTCOM: US forces have boarded one vessel since the recommencement of the US Navy blockade.

-(QA) Several 'booms' heard in Doha, Qatar - govt alert to mobile phones.

-(QA) Qatar Defense Ministry: Qatar intercepted missile attack.

-(YE) Yemen's Houthi Leader: All Saudi oil and vital facilities would be targets for our missiles if Riyadh gets involved in 'comprehensive aggression' against Yemen and escalates the conflict [EU market close].

Levels as of 01:20 ET

Nikkei 225 -5.3%; ASX 200 -0.8%; Hang Seng -2.4%; Shanghai Composite -2.4%; Kospi flat.

Equity S&P500 Futures -0.9%; Nasdaq100 -1.5%; DAX -0.8%; FTSE100 -0.5%.

EUR 1.1449-1.1435; JPY 162.47-162.31; AUD 0.7003-0.6976; NZD 0.5849-0.5833.

Gold flat at $3,979/oz; BTC -2.4% at $63,416; WTI Crude Oil +1.0% at $79.72/bbl; Copper -1.0% at $6.2180/lbs.