World taking US-Iran prospective deal seriously

Asia market update: World taking US-Iran prospective deal seriously; CN pushes Yuan internationalization; US FOMC tonight.

General trend and developments

-In addition to the oil markets (both Brent and WTI well below $80) govts and companies also appear to be taking the US-Iran deal seriously, as the MOU said to allow Tehran to begin selling oil immediately. Guidance updates have been seen in Australia, for example Flight Center. Meanwhile, the Australian government eased Middle East travel restrictions.

-Nikkei outperformed +0.8% on a quieter day for Asian equities saw the Japanese index hold 70,000.

-China's 2026 annual Lujiazui Forum on national financial issues to be held from today, Jun 17-18th, with speakers including Vice Premier He Lifeng as well as speakers from the PBOC, CSRC, NFTA, SAFE.

-China will launch a Yuan offshore repo facility for foreign central banks and CB-like institutions with Yuan internationalization remaining a focal point. Shanghai to form a Hub and set up offshore finance rules by end-2027 and aiming to form mature offshore finance legal system by end-2030. Eligible institutions include foreign central banks, monetary authorities, international financial organizations and sovereign wealth funds.

-PBOC Gov Pan Gongsheng commented on ways to address the low yield environment in China and improve the yield curve. Plans include increasing/adjusting the domestic O/N RRP operations.

-US and Europe discuss access to AI models as fall out from Anthropic’s withdrawal of Fable 5 / Mythos continues; US Commerce Dept said to hold off blacklisting DeepSeek and 100 other China-linked companies deemed as national security risks as US companies including Microsoft considering to host DeepSeek as a cheaper and self-controllable model option.

-Additionally, US housing starts fell to their lowest level post-pandemic, whilst building permits remained relatively unchanged, suggesting a softer housing demand and a relatively cautious construction environment.

-BOJ message was received by the markets, following the Bank of Japan’s expected hike to 1.00% yesterday. JP yields gave back some of their gains yesterday amid chances of a hike at end-July now 2% and by September at 18.5%.
[Strong May tech-related exports from Japan and Singapore---JP semiconductor related exports +61.2% y/y (MOF].

-Japanese trade balance for May not as bad a deficit as expected, with exports growing at the fastest pace in more than three years and imports less than expected.

-Singapore also better trade data for May with huge exports, especially for Electronic exports up almost +95%. MAS revised its GDP forecasts, cutting the 2026 forecast whilst maintaining the 2027 forecast.

-Nvidia expanding its multi-vendor global footprint to Chinese vendor Ningbo Runhe for optical equipment, on top of aggressive multi-billion dollar investments in US and Taiwan optical companies that include Corning, Marvell and Coherent.

-SpaceX saw another +6% rise including after-hours; At over $206/share now sees the stock battling it out with Microsoft to be the 4th most valuable company in the world after just 3 days of trading.

-US equity FUTs +0.2% to +0.6% during Asia trading.

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

-Wed Jun 17th: (Wed night, US May Retail Sales, US FOMC Rate Decision).

-Thu Jun 18th: NZ Q1 GDP, ID Rate Decision, TW Rate Decision, PH Rate Decision (Thu night, UK BoE Rate Decision).

-Fri Jun 19th: JP May National CPI, (Note: Juneteenth — US markets closed, reduced liquidity).

Holidays in Asia this week

-Tue Jun 16th: Indonesia.

-Wed Jun 17th: Malaysia.

-Fri Jun 19th: China, Hong Kong, Taiwan, US.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens -0.3% at 8,893

-(AU) RBA Assist Gov Jones: Australia must gird for shock-prone financial system - speech at the Australian Banking Association’s Conference 2026.

-(AU) Australia APRA: Sets minimum expectations to strengthen industry readiness for geopolitical shocks.

-(AU) Australia's ASX to introduce 25% cap on share issuance, to fund company takeovers - Statement.

-(AU) Australia lowers Middle East travel advice from "Do Not Travel" to "Reconsider Travel".

-(AU) Australia May Westpac Leading Index M/M: -0.04% v +0.06% prior.

-(NZ) New Zealand Fin Min Willis: Will release a pre-election update on Sept 29th; We take credit rating agencies estimates very seriously; Maintaining prudent fiscal position is important.

-(NZ) Update: New Zealand Q2 Westpac Consumer Confidence 80.4 v 94.7 prior.

-(NZ) New Zealand Q1 Current Account Balance (NZD): -1.0B v -1.0Be.

-(NZ) New Zealand May Non Resident Bond Holdings: 59.6% v 58.9% prior.

China/Hong Kong

-(CN) Shanghai Composite opens -0.4% at 4,074; (HK) Hang Seng opens flat at 24,496.

-(CN) Various China officials speak at the Lujiazui Forum in Shanghai: Vice Premier He Lifeng noted to safeguard national financial security in accordance with the law, to explore the launch of Yuan FX FUTs.

-(CN) DEEPSEEK.IPO (US) US Commerce Dept said to hold off blacklisting Co and 100 other China-linked companies deemed as national security risks - US financial press, citing sources.

-(CN) DEEPSEEK.IPO Reportedly Microsoft considers moving Copilot Cowork to usage-based pricing; Microsoft may host a version of China's DeepSeek as a cheaper model option - Axios [US market close].

-(CN) China issues new white paper on global governance, stating UN's authority challenged and representation critically inadequate.

-(CN) China NDRC: To boost marine economy in effort to increase job creation.

-(CN) Chinese company Ningbo Runhe [300727.CN] says unit FSG in partnership with Nvidia to develop optics, optical interconnect technologies.

-(CN) China to hold World AI Conference in Shanghai in July, 2026 - Xinhua.

-(CN) Reminder: China's 2026 Lujiazui Forum is scheduled to be held Jun 17-18th.

-(HK) Chinese company 'Xiaohongshu' preparing Hong Kong IPO as early as late 2026 - US financial press-(CN) China PBOC sets the yuan mid-point at 6.8096 v 6.8108 prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY420B in 7-day Reverse Repos; Net injects CNY261B v injects CNY297B prior.

Japan

-(JP) Nikkei 225 opens -0.6% at 69,006.

-(JP) Japan May Trade Balance: -¥378.6B v -¥547.6Be.

-(JP) Japan Chief Cab Sec Kihara: Want to do all possible for Mid-East peace, stability.

-(JP) Japan Apr Core Machine Orders M/M: 8.7% v 0.5%e; Y/Y: 15.6% v 8.7%e.

Korea

-(KR) Kospi opens -1.2% at 8,622-(KR) South Korea considering lifting naphtha export curbs - Daily.

-(KR) South Korea Defense Minister: South Korea to move civilian restricted line at border with North Korea by average 2km to the North.

-(KR) South Korea FSS asks investors to refrain from high risk or excessively leveraged investments - US financial press.

Other Asia

-(SG) MAS Survey of Professional Forecasters: Economists cite AI bubble as risk for Singapore economy; Economists cuts Singapore 2026 GDP growth forecast to 3.5% from 3.6%; 38% of respondents anticipate monetary policy tightening in July; raises 2026 and 2027 CPI forecasts.

-(SG) Singapore May Non-oil Domestic Exports Y/Y: 38.4% v 30.5%e.

-(IN) President Trump and PM Modi are set to discuss bilateral trade-deal at the G7 summit on Wednesday 17th June, 2026 - India press.

-(TW) Update: Taiwan is easing regulations to give life insurers flexibility to invest in artificial intelligence projects.

-(PH) Philippine's Senate to elect Sherwin Gatchalian as new Leader of Chamber.

North America

-(US) May Housing Starts: 1.177M v 1.430Me (lowest since pandemic); Building Permits: 1.413M v 1.419Me [US market close].

-(US) May Import Price Index M/M: 1.9% v 1.0%e; Y/Y: 6.7% v 5.7%e [US market close].

-(US) Jun New York Fed Services Business Activity: -10.1 v -5.8 prior [US market close].

-(US) Weekly Redbook LFL Sales w/e June 13th: +9.4% y/y [US market close].

-(US) Weekly API Crude Oil Inventories: -8.3M v -9.1M prior.

-(US) NHC: Tropical Storm Warning issued for portions of Louisiana coast; Dangerous flash flooding continues over portions of Texas and Louisiana from Potential Tropical Cyclone One.

-(US) US Department of State Consular Affairs: US withdraws embassy staff from parts of Colombia due to safety - post on X.

-(BR) Brazil Apr Retail Sales M/M: -1.5% v -0.6%e; Y/Y: 1.0% v 2.0%e [US market close].

-(CL) Chile Central Bank (BCCH) leaves overnight rate target unchanged at 4.50%; As expected.

Europe

-(G7) Leaders release statement on geopolitical issues: Confirms agreement on strengthening Russia oil, gas sanctions; Agree to increase air defense capacities delivery; Support comprehensive follow-on pact to MOU-(UK) London Times Shadow MPC voted 5-4 for the BOE to raise rates by 25bps – Press [update].

-(EU) ECB’s Lane (Ireland, chief economist): Can see inflation in the pipeline; The rate hike this month was a straightforward decision [US market close].

-(RU) G7 leaders said to back more energy sanctions against Russia - press [US market close].

-(PL) Poland PM Tusk: To adopt draft to tax windfall profit on fuel sales today [US market close].

-(FR) Bank of France (BOF) cut its 2026 GDP growth forecast from 0.9% to 0.5%.

-(EU) EU plans trade-relief for Armenia following Russian import bans - FT.

-(PL) World Bank: Group's Board of Executive Directors today discussed new country partnership framework (CPF) for Poland for period 2026-2031.

-(RU) Russia announcement on upcoming OFZ bond issuance (held on Wed); To sell 2 tranches on Jun 17th.

Middle East

-(IR) US and Iran MOU allows Tehran to reportedly begin selling oil immediately - WSJ [US market close].

-(IR) Iran said to claim US naval blockade is being lifted - ISNA [US market close].

Levels as of 01:20 ET

Nikkei 225 +0.7%; ASX 200 +0.5%; Hang Seng -0.5%; Shanghai Composite -0.1%; Kospi +1.1%.

Equity S&P500 Futures +0.2%; Nasdaq100 +0.6%; DAX -0.4%; FTSE100 -0.2%.

EUR 1.1617-1.1608; JPY 160.47-160.26; AUD 0.7073-0.7060; NZD 0.5836-0.5822.

Gold -0.1% at $4,326/oz; BTC -0.5% at $65,676; Crude Oil -1.0% at $75.27/bbl; Copper +0.6% at $6.5203/lbs.