Yesterday’s risk asset rally flattens out amid reports of 60-day US-Iran ceasefire MOU

Asia Market Update: Yesterday’s risk asset rally flattens out amid reports of 60-day US-Iran ceasefire MOU; Focus on SpaceX IPO launch.

General trend and developments

-Markets held onto (but did not add to) the gains that originally started piling up from 19:20pm ET in yesterday’s Asia’s session following dovish Trump comments at the time, as breaking news today shortly before midnight ET detailed the Iran-US MOU would extend the ceasefire for 60 days, during which time nuclear talks are expected to be held. Reportedly the agreement still needs final sign-off, which dovetails with earlier Trump comments that “VP Vance will be there” (to sign off, likely in Europe). Ceasefire also said to cover Lebanon while the Strait of Hormuz will be reopened immediately without tolls.

-Iran would also be given waivers on oil sanctions during the 60 days with further relief dependent on compliance with the agreement. The situation regarding frozen Iranian assets was unclear.

-Asian equities had already popped earlier in the Asia session, playing catch-up to the continued rise in risk assets overnight which accelerated as Pres Trump announced on a social media post that the US had “Made a great settlement with Iran...with documents in ”pretty final shape“. Iran has since consistently denied a deal had been struck but that did not stop equities, bonds, precious metals and Bitcoin rising steeply. Trump then followed up in a virtual rally during the Asia session that ”We got everything we wanted; Ended war with Iran today“.

-Note that Iraeli PM Netanyahu stated that Israel is not a party to the emerging US-Iran MOU, although Trump did speak with him about it.

-Chip-relateds in Asia followed SMH higher (+6.8%) from the US session, with Samsung +12% and Hynix +9% as Kospi extreme VOL continued, up +9% today (for the week: Kospi Mon -8%, Tue +8%, Wed -6%, Thu flat. Fri +9%), with Japan chip-relateds Tokyo Electron +11%, Advantest +9%, Renesas +6% as the Nikkei returned +3.5%. Strong gains for all Asian major indices.
- SPACEX:

-US equities and indeed global investors will be tuning in to the world’s biggest-ever IPO as SpaceX debuts on the Nasdaq after a likely pre-trading period between 9:30am-10am ET where market makers and institutions collect buy and sell orders for the exchange to match into a single "clearing price". The massive $1.77T listing has soaked up both investor attention and funds over the past week or two, with some analysts speculating that once the listing takes place capital that had been tied up for SpaceX allocations, particularly by retail investors, may come back into the market again.

-Then in terms of what happens to the initial set pricing of $135/share post-listing, irrespective of any initial "pop" or not; Note that SpaceX’s lock up period for retail investors of 15 days is timed perfectly to dovetail in with institutions able to start buying the stock on the open market after 15 days, one of up to 16 staggered lock-up periods over the next year or so (a record number of lock-ups for an IPO), designed to balance supply and demand for the mega-listing.

-Ahead of key Asian rate decisions next week the ECB overnight raised rates as expected by 25bps, with Japan’s BOJ next week expected to hike for the first time since December, 2025, while Australia’s RBA expected to pause on the same day (Tuesday, June 16th) following three successive hikes thus far in 2026.

-US equity FUTs +0.2% during Asia trading.

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

-Fri Jun 12th: UK Apr GDP, (Fri night, US Jun Prelim Michigan Consumer Sentiment).

Holidays in Asia this week

-Mon Jun 8th: Australia.

-Fri Jun 12th: Philippines.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens +1.5% at 8,764.

-(NZ) New Zealand May Manufacturing PMI: 49.9 v 50.4 prior (1st month of contraction in 8 months).

-(NZ) New Zealand Apr Net Migration: 3.1K v 3.2K prior.

China/Hong Kong

-(CN) Shanghai Composite opens +0.8% at 4,017; (HK) Hang Seng opens +1% at 24,502.

-(CN) China tells big banks to curb interbank-loans to ease ample liquidity - financial press.

-(CN) Follow up: China reportedly says China-EU trade relations means "a lot".

-(CN) China summons carmakers suspected of irrational competition and orders them to follow pricing laws and quality rules - press (in line with theme).

-(CN) Chinese investors rush to open Hong Kong accounts amid Beijing crackdown - FT.

-(CN) Banned’ forex trading said to ‘resurface’ in China social media – Chinese press.

-(CN) China has arrested US scholar U Min Zin who studies Myanmar politics, cited the 'endangering' of national security'; the arrest occurred in early Jun – NYT.

-(CN) China PBOC sets the yuan mid-point at 6.8109 v 6.8150 prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY393B in 7-day Reverse Repos; Net injects CNY178B v injects CNY189B prior.

Japan

-(JP) Nikkei 225 opens +1.4% at 65,087.

-(JP) Japan Government to select vessels to dispatch to Hormuz [timeframe uncertain] - US financial press.

-(JP) Japan Apr Final Industrial Production M/M: 0.5% v 0.8% prelim; Y/Y: 2.0% v 2.3% prelim.

-(JP) Japan Chief Cab Sec Kihara: Declines to comment on ECB rate hike.

-(JP) Japan Fin Min Katayama: Sees no impact of Gov Ueda's absence on BOJ meeting (rate decision next week, June 16th).

-(JP) Japan Defense Min Koizumi to visit Indonesia from Jun 12th - press.

-(JP) Japan Aerospace Exploration Agency [JAXA]: Japan H3 Rocket No.6 launches carrying test probe, six satellites.

-(JP) FT: BOJ Gov illness ‘complicates’ the task of the central bank; analysts note a focal point is expected to be the BOJ's forward guidance.

-(JP) Japan chip exports to China rebound, cites the improvement in bilateral trade – Chinese press [update].

Korea

-(KR) Kospi opens +6.4% at 8,263.

-(KR) Bank of Korea (BOK) Gov Shin: Interest rates need to be raised "before its is too late".

-(KR) Approval rating for South Korea's Lee falls to 57% (marking a 6-month low).

-(KR) Korea exchange activates side car to halt program buying on Kospi.

-(KR) South Korea signs AI standardization agreement with partners incl Singapore, Australia, UK and Canada - Yonhap, citing Korean Agency for Technology and Standards.

-(KR) South Korea Fin Min: Higher consumer prices and slower job market expected due to fall out from Middle East war; cites a report from the Ministry - Yonhap.

-(KR) South Korea concrete delivery halt said to threaten Samsung, SK Hynix chip production expansion plans - press.

-(KR) Follow up: South Korea's Ex-President Yoon sentenced 30 years on drone incident - Yonhap.

Other Asia

-(PH) Philippine Foreign Minister: [On China's sanctions] We are of the view that it is not correct; We will still try to discuss with Chinese authorities; That is their sovereign right.

-(ID) Indonesia Central Bank (BI): Sees capital inflows increase after rate hike.

-(ID) Indonesia wealth fund Danantara said to monitor export prices, not act as a middleman - US financial press.

-(IN) India said to be willing to let it's fiscal gap widen to as much as 4.8% of GDP (prior 4.3%) - financial press.

-(MY) Malaysia Apr Industrial Production Y/Y: 8.2% v 4.5%e.

North America

-(US) SPCX Prices IPO of 555.6M shares at $135/shr, as expected; SPCX Follow up: CEO Elon Musk files form 3 following it's pricing of IPO; Holds options to purchase 350M SpaceX Class B shares.

-(US) May PPI final demand M/M: 1.1% v 0.7%e; Y/Y: 6.5% V 6.4%E; (ex-food/energy) M/M: 0.4% v 0.5%e; Y/Y: 4.9% v 5.4%e [US Market Close].

-(US) Initial Jobless Claims: 229K V 220KE; Continuing Claims: 1.795M v 1.785Me [US Market Close].

-(US) Federal Appeals Court extends stay on lower court ruling against Trump's 10% global tariff, allowing the Administration to continuing enforcing Section 122 tariffs for the time being - press [US Market Close].

-(US) Weekly EIA Natural Gas Inventories: +108 BCF vs. +98-101 BCF [US Market Close].

-(US) Treasury’s $22B 30-year bond reopening draws 5.020% v 5.046% prior; Bid-to-cover 2.33 v 2.30 prior and 2.41 over last 8 reopenings [US Market Close].

-(US) President Trump and allies have discussed pushing lawmakers to pass resolution to "expunge" impeachments - WSJ.

-(US) WSJ Greg Ip: The global economy is threatened again by trade imbalances; notes deficits and surpluses will be on the agenda at next week’s G7 meeting in the French Alps - update.

-(US) Reportedly US plan is said to pull a third of fighter jets it provides NATO for Europe - NYT.

-(US) US insurance rulemaker [National Association of Insurance Commissioners] probes credit risks tied to data centers; whether certain credit ratings for projects were justified will be examined - FT.

-(US) Department of Energy (DOE) authorizes some Duke units to operate up to max level as it issues emergency order to mitigate blackouts in North and South Carolina due to unusually hot weather - Statement.

-(CA) Canada PM Carney: There are delays at Michigan-Ontario bridge opening due to US request.

-(CA) Canada PM Carney: Canada is looking for a bilateral deal with Mexico.

-(BR) Brazil Apr IBGE Services Volume M/M: 1.2% v 0.8%e; Y/Y: 1.9% v 1.2%e [US Market Close].

-(PE) Peru Central Bank (BCRP) leaves Reference Rate unchanged at 4.25%; as expected.

Europe

-(EU) ECB raises key rates by 25bps; As expected (first hike since September 2023); Reiterates not pre-committing to a particular rate path [US Market Close].

-(EU) ECB Chief Lagarde: 25bps is a signal and necessary; Decision was unanimous without reservations; Did not discuss alternatives; Our discussion was not about a preemptive 'insurance hike' [US Market Close].

-(EU) ECB Staff Projections: Raises inflation projections and cuts growth [US Market Close].

-(EU) Reportedly ECB policymakers consider interest rate pause if energy prices remain as they are - press [US Market Close].

-(EU) ECB's Nagel (Germany): The supply shock triggered by the war in the Middle East is proving to be strong and persistent - Comment by E-mail.

-(EU) ECB’s Dolenc (acting Slovenia member): ECB rate hike just enough for now to follow baseline; Had robust set of data on table to make decision.

-(TR) Turkey Central Bank (CBRT) leaves one-week auction rate unchanged at 37.00%; As expected [US Market Close].

-(RU) Russia's Defense Ministry: Russia downs 231 drones overnight - Newagencies [citing defense ministry].

-(UK) Defense Min Healey resigns over insufficient backing for defense plans - press (was expecting UK Strategic Defense Review any day) [US Market Close].

-(IE) Ireland May CPI M/M: -0.1% v +0.5% prior; Y/Y: 3.6% v 3.7% prior [US Market Close].

-(HU) Hungary PM Magyar: To review 2026 budget by Jun 30th, amend it early Sept; Targeting HUF300-600B in wealth tax income (above estimates of HUF250-350B) [US Market Close].

Middle East

-(IR) Iran-US MOU would extend ceasefire for 60 days; Still needs final sign-off - Axios [citing unnamed diplomat and US official]

-(IR) US Pres Trump: We made a great settlement with Iran; Finalization is possible in the next few days and probably signed in Europe; Iranian docs are in 'pretty final shape'; The Strait of Hormuz will open as soon as the deal is signed [US Market Close].

-(IR) Iranian News: Likelihood that Iran will approve the recently announced deal given that the US has accepted the text approved by Iran; Iran has not given a final response yet - press [US Market Close].

-(IR) Pres. Trump: Iran leaders have approved discussions and final points have been approved by all parties involved; Time and place of the signing to be announced shortly; US cancels strikes on Iran, but blockade will remain in effect until transaction is finalized - Truth Social [US Market Close]

-(IR) Pres Trump: Will be hitting Iran very hard tonight; At some point in the not too distant future, we will be taking Kharg island, and other oil infrastructure points, and assume total control of their oil and gas markets [US Market Close].

-(IR) Head of National Security in Iran's Parliament: In response to Trump's threats, 'He will receive a stronger and more painful response' [US Market Close].

-(IR) US President Trump: Today we settled up with Iran; Pretty much completed; We got everything we wanted; Ended war with Iran today - Comments at Virtual Campaign Rally.

-(IR) Iran has not yet approved any text for agreement with the US - FARS news agency [US Market Close].

-(IR) Treasury Sec Bessent: Any tolls paid to Iran to be offset by extracted funds; Iran will lose the zero-sum game it is playing - X post [US Market Close].

-(IR) US shot down two Iranian attack drones "tonight" [Thursday]; Traffic flow through the Strait of Hormuz continues - post on X [Fox reporter citing US defense officials].

Levels as of 01:20 ET

Nikkei 225 +3.5%; ASX 200 +1.9; Hang Seng +1.9%; Shanghai Composite +1.5%; Kospi +7.8%;

Equity S&P500 Futures +0.2%; Nasdaq100 +0.2%; DAX +1.6%; FTSE100 +0.8%.

EUR 1.1587-1.1561; JPY 160.31-159.91; AUD 0.7054-0.7029; NZD 0.5843-0.5813.

Gold -0.6% at $4,187/oz; BTC +1.3% at $63,478; Crude Oil -2.0% at $85.98/bbl; Copper +0.2% at $6.4095/lbs.