Asian Macro Initial Thoughts & Data Impacting Asia 21 - 25 July. Japan closed but LDP performed badly in the Upper House election
NZX opened higher testing 12,900 then traded 12,895/905 range until inflation data came out which was higher than expected and market sold off on the news, currently -9pts -0.072% at 12,870
Overview.
Japan markets closed but the Upper House elections on Sunday did not go well and luckily for the Government markets will be closed and so there will be no immediate reaction. PM Ishiba vowed to stay on as the country's leader, even as his ruling coalition failed to win the 50 seats it needed in the upper house to retain a majority. He no longer has a majority in either house. That leaves Japan open to more political uncertainty and potential another period of short term Prime mInisters and policy uncertainty, especially damaging considering Japan has yet to agree tariff levels with the US. Worth noting the public outcry at immigration levels and inflation.
Looking ahead
Next weekend Taiwan will hold recall elections for 24 opposition lawmakers. Whilst the nation’s ruling party won the presidency but lost its parliamentary majority last year, so its leader Lai Ching-te is attempting to regain control under the motto “Unite Taiwan”.
Thursday sees Beijing hosting an EU/China summit which in this era of tariffs could be very important for both trading nations and we also get a rate decision from the ECB, on Thursday. Also this week the Magnificent 7 tech stocks start reporting with with Alphabet and Tesla reporting with Tesla investors watching for what Musk may say regarding politics going forward.
Also this week we get a lot of preliminary PMI data from Eurozone, France, Germany, India, Japan, UK and US. Also US housing data in focus with Existing Home sales which is likely to be weak and New Home Sales also likely to be weak and it is already clear that Builders have been more and more aggressive in using discounts and other incentives to maintain sales. Slight -VE for sentiment.
Continued uncertainty about Trump’s interaction with Fed Chairman Powell. Even though he has been warning by many in Government. In a posting on his Truth Social he claims he knows best about what is best for the Economy. Fed officials now in ‘black-out’ ahead of the next Fed meeting.
The total market capitalization of crypto assets surpassed US$4 trillion for the first time, thanks to the rise in altcoins, the alternative to Bitcoin, and the approval of the US GENIUS Act, according to Bloomberg. Altcoins are leading the cryptocurrency rally, with Ether soaring 22% in the past 5 days. Bitcoin set an all-time high of US$123,205 earlier this week. Investors continued to flood into US-listed crypto ETFs, with Bitcoin ETFs attracting US$5.5 billion so far in July and Ether ETFs bringing in US$2.9 billion.
I listened to a good Bloomberg Law podcast which has the great tag line the ‘elections have consequences’ and made the point that Trump is not pushing a Republican agenda but the Trump agenda where loyalty to Trump is the prerequisite, to do his bidding, not Republican values but his. I think that is very true and worrying for the fabric of American society.
Trump continues to be dogged by the Epstein association while his Mega base want to know all the details but it is clear doesn’t care about what they want. It is likely that like many others he has been associated with Epstein from years ago like many others. Worth noting that his public popularity is dropping although I doubt that will see him changing his policies. Most surveys show his approval rating has dropped further in recent days. Over the weekend he called for the Washington Commanders to revert to their former name ’The Redskins’ which many natural Americans consider offensive. But Trump made the call and threatened scuppering a new stadium deal.
Press speculating that Trump and Xi could meet ahead of or during Apec summit in South Korea October 30 and November 1.
Hong Kong recovered from typhoon Wipha which saw the T10 raised for the first time in 2 years.
Earnings
Monday include Domino’s Pizza Q2, Midwich Group trading update, MONY Group HY, NXP Semiconductors Q2, Roper Technologies Q2, Ryanair Q1, Verizon Communications Q2
Tuesday Alfa-Laval Q2, ASA International Q2 business update, Canadian National Railway Q2, Capital One Financial Q2, Coca-Cola Q2, Compass Q3 trading update, CoStar Q2, Danaher Q2, DR Horton Q3, Enagas Q1, Equifax Q2, General Motors Q2, Givaudan HY, Greencore Q3 trading update, Halliburton Q2, Headlam pre-close trading update, Intuitive Surgical Q2, Invesco Q2, IQVIA Q2, Julius Baer HY, KeyCorp Q2, Kier trading update, Lockheed Martin Q2, Luceco HY trading update, Marston’s Q3 trading update, Mitie Q1 trading update at AGM, MSCI Q2, Norsk Hydro Q2, Northrop Grumman Q2, Paccar Q2, Pentair Q2, Philip Morris International Q2, PulteGroup Q2, Quest Diagnostics Q2, RTX Q2, SAP Q2/HY, Sherwin-Williams Q2, Synchrony Financial Q2, Temenos Q2, Tenet Healthcare Q2, Texas Instruments Q2, Vale Q2, Yu Group trading update
Wednesday Alphabet Q2, Amphenol Q2, AT&T Q2, Baker Hughes Q2, Boston Scientific Q2, Breedon HY, Crown Castle Q2, CSX Q2, Equinor Q2, EQT Q2, Fiserv Q2, Fresnillo Q2 production report, Gecina HY, General Dynamics Q2, Heathrow HY, Hilton Worldwide Q2, Hochschild Mining Q2 production results, Iberdrola HY, IBM Q2, Informa HY, Infosys Q1, Lamb Weston Q4, Lennox International Q2, Lonza HY, Mattel Q2, Moncler HY, Northern Trust Q2, Moody’s Q2, Otis Worldwide Q2, PensionBee Q2, Randstad Q2, Royal KPN Q2/HY, ServiceNow Q2, Tesla Q2, Thales HY, Thermo Fisher Scientific Q2, T-Mobile US Q2, UniCredit Q2/HY, United Rentals Q2, JD Wetherspoon Q4 trading statement
Thursday 3i Group Q1 performance update, AJ Bell Q3 trading update, American Airlines Q2, Anglo American Q2 production report, AO Smith Q2, Banco Sabadell Q2, Blackstone Q2, BNP Paribas Q2, BT Q1 trading update, Canon Q2, Carrefour HY, Centrica HY, City of London Investment Group Q4 FuM and trading update, CVS trading update, Dassault Systèmes Q2, Deutsche Bank Q2, Deutsche Börse HY, Dow Q2, Getlink HY, Honeywell International Q2, Howden Joinery HY, Intel Q2, ITV HY, Keurig Dr Pepper Q2, Kuehne+Nagel Q2/HY, Lloyds Banking Group HY, LVMH HY, Michelin HY, MTU Aero Engines Q2, Nasdaq Q2, Nestlé HY, Nokia Q2/HY, Reach HY, Reckitt Benckiser HY, Repsol Q2, Roche Holding HY, Severfield FY, SK Hynix Q2, Southwest Airlines Q2, STMicroelectronics Q2, Textron Q2, TotalEnergies Q2/HY, Union Pacific Q2, Valero Energy Q2, Verisign Q2, Vodafone Q1 trading update, Wickes Q2 trading update, Wizz Air Q1
Friday Aon Q2, Centene Q2, Charter Communications Q2, Eni Q2, Jupiter Fund Management HY, NatWest HY, Phillips 66 Q2, Rightmove HY, Signify Q2/HY, Volkswagen HY
Housekeeping
On Monday morning I will be on RTHK’s Money Talk with host Chloe Feng and Mark Michelson of IMA Asia. Click the link below if you have a topic you would like discussed this coming Monday or if you just want to listen to the programme use the link below.
https://www.rthk.hk/radio/radio3/programme/money_talk
Last Thursday afternoon I was on RTHK’s The Close, with Nitin Dialdis and fellow guest Samuel Faveur, CEO, Mandarin Capital. We looked at the rift between Trump and Powell along with the failed takeover of Seven & I in Japan and the implications for the wider market.
If there is a topic you want discussed next week please message me or them via the link, which can also be used to listen to the programme
https://www.rthk.hk/radio/radio3/programme/the_close
Looking for good Independent Research, Showcase Events, Introductions & Marketplace, Reports, blogs, trials, podcasts then click the link
https://www.eri-c.com/
It is MiFID II compliant, you can try Before You Buy, there is Research Evalution. and information can be shared across team or firm. It has Different Views at the Best Price. Buyers transact at offered prices or with vendor permission, by agreement. ERIC's industry low commission rates - charged only to sellers - allow both buyers and sellers to realise better net pricing simulataneously. The differentiated price discovery mechanism entertains private bids and negotiation (on or offline) to broaden demand capture and liquidity.
If you have any problems connecting, call or message me and I will sort your issue out.
For Example last recently Russell Napier was in conversation with Andy Rothman on the topic of Will Trump make China great again. Russell has covered Asia for year and Andy has a unique perspective on China, having lived and worked there for more than 20 years as an American diplomat and a sell-side macro strategist. Andy first went to China as a student in 1980, returned as Foreign Service Officer in 1984, joined CLSA in Shanghai in 2000, and then went to the buy side with Matthews Asia in 2014. This year, Andy founded Sinology LLC, advising institutional investors and corporate directors on the risks and opportunities in the Chinese economy, and on navigating the rising tensions in US-China relations. This follows on from Andy’s recent webinar after a recent visit to China in early April you can still go to the website to listen to that recording if you didn’t hear it live.
Mark Tinker recently posted the Latest thoughts from Market Thinker - Class Dismissed....
Britain's new Class structure is a key to its new problems. 'As the Chattering Classes head to their villas in Tuscany and Provence for the next six weeks and the Chartering Classes head to the Med for the next leg of their perpetual party, the British Middle Class are left with the Meddle Class and the Muddle Class, who, well intentioned or not, continue to mess up the economy'
You can find the whole article here
DATA impacting Asia 21 - 25 July
New Zealand
Monday Inflation Rate
Tuesday Balance of Trade, Exports, Imports, 1 year Bill Auction, 3 & 6 month Bill Auction
Wednesday No Data Due
Thursday RBNZ’s Conway speaks
Friday No Data Due
Australia
Monday No Data Due
Tuesday RBA Meeting Minutes
Wednesday No Data Due
Thursday Flash PMIs (Manufacturing, Services & Composite) RBA Bulletin
Friday No Data Due
Japan
Monday No Data Due - Market closed for Marine Day
Tuesday No Data Due
Wednesday BoJ’s Uchida speaks, 40-year JGB Auction
Thursday Flash PMIs (Manufacturing, Services & Composite)
Friday Tokyo Core CPI, Tokyo CPI Ex Food & Energy, Foreign Bond Investment, Stock Investment by Foreigners, 3-Month Bill Auction, Coincident Index Final and Leading Economic Index Final
S Korea
Monday 5-Year KTB Auction
Tuesday PPI, 20-Year KTB Auction
Wednesday Consumer Confidence
Thursday Business Confidence, GDP Growth Rate
Friday No Data Due
Taiwan
Monday No Data Due
Tuesday Export Orders, Unemployment Rate
Wednesday Industrial Production, Retail Sales, M2 Money Supply
Thursday No Data Due
Friday No Data Due
China
Monday Loan Prime Rate (1-Year and 5 Year)
Tuesday No Data Due
Wednesday No Data Due
Thursday No Data Due
Friday No Data Due
Sunday Industrial Profits (YTD)
Hong Kong
Monday Inflation Rate
Tuesday No Data Due
Wednesday No Data Due
Thursday No Data Due
Friday No Data Due
Macau
Monday No Data Due
Tuesday No Data Due
Wednesday No Data Due
Thursday Inflation Rate, Tourist Arrivals
Friday Unemployment Rate
Singapore
Monday No Data Due
Tuesday MAS 12 & 4 Week Bill Auction
Wednesday Core Inflation Rate, Inflation Rate
Thursday 1-Year T-Bill Auction
Friday URA Property Index Final, Industrial Production
Malaysia
Monday No Data Due
Tuesday Inflation Rate
Wednesday No Data Due
Thursday No Data Due
Friday Coincident Index and Leading Economic Index.
Indonesia
Monday No Data Due
Tuesday M2 Money Supply
Wednesday No Data Due
Thursday No Data Due
Friday No Data Due
Philippines
Monday No Data Due
Tuesday No Data Due
Wednesday No Data Due
Thursday Budget Balance
Friday No Data Due
Thailand
Monday No Data Due
Tuesday No Data Due
Wednesday No Data Due
Thursday Balance of Trade, Exports, Imports,
Friday New Car Sales
Cambodia No data scheduled this week
Myanmar No data scheduled this week
Vietnam No data scheduled this week
India
Monday Infrastructure Output
Tuesday No Data Due
Wednesday M3 Money Supply
Thursday Flash PMIs (Manufacturing, Services & Composite)
Friday Foreign Exchange Reserves
Euro Zone
Monday No Data Due
Tuesday No Data Due
Wednesday Consumer Confidence Flash
Thursday Flash PMIs (Composite, Manufacturing & Services), ECB Interest Rate Decision, Deposit Facility Rate, Marginal Lending Rate, ECB Press Conference
Friday Loans to Companies, Loans to Households, M3 Money Supply, ECB Consumer Inflation Expectations
Germany
Monday 3 & 9 Month Bubill Auction
Tuesday Bund/g Auction
Wednesday 10-Year Bund Auction
Thursday Gfk Consumer Confidence, Flash PMIs (Manufacturing, Composite & Services)
Friday Ifo Business Climate, Current Conditions and Expectations
France
Monday 12, 3 & 6 month BTF Auction
Tuesday No Data Due
Wednesday No Data Due
Thursday Business Confidence, Business Climate Indicator, Flash PMIs (Composite, Manufacturing & Services)
Friday Consumer Confidence
United Kingdon
Monday No Data Due
Tuesday Public Sector Net Borrowing Ex Banks, Index Linked Treasury Gilt 2035 Auction
Wednesday Treasury Gilt 2040 Auction
Thursday Flash PMIs (Manufacturing, Services & Composite)
Friday Gfk Consumer Confidence, Car Production, Retail Sales, Retail Sales Ex Fuel, CBI Business Optimism Index and Industrial Trends Orders
United States
Monday CB Leading Index, 3 & 6 Month Bill Auction
Tuesday Feds Powell speaks, Redbook, Richmond Fed (Manufacturing Index, Manufacturing Shipments Index and Services Revenues Index), Fed Bowman speaks, Money Supply, API Crude Oil Stock Change.
Wednesday MBA Data (30 yr Mortgage Rate, Applications, Market Index, Refinance Index, Purchase Index), Existing Home Sales, EIA Oil Stocks Change, 17-Week Bill Auction, 20-Year Bond Auction
Thursday Chicago Fed National Activity Index, Initial Claims, Continuing Claims, Jobless Claims 4 week average, Flash PMIs (Composite, Manufacturing & Services), New Home Sales, EIA Gas Stocks Change, Kansas Fed (Composite and Manufacturing Indexes), 4 & 8-Week Bill Auction, 10-Year TIPS Auction, 15 & 30 year Mortgage Rate, Building Permits, Feds Balance Sheet
Friday Durable Goods Orders, Durable Goods Ex Transport, Durable Goods Ex Defense, Durable Goods Ex Air, Baker Huges Oil Rig Count.
Market opening indications and data
New Zealand
NZX opened higher testing 12,900 level in early trades and then trading 12,895/905 range. Inflation data came out after the open, higher than expected and market sold off on the news currently -9pts -0.072% at 12,870
Data Out after the open
Inflation Rate Q2 0.5% QoQ vs 0.9% Q1 (F/cast is 0.3%)
Inflation Rate Q2 2.7% YoY vs 2.5% Q1 (F/cast is 2.1%)
Australia - No Data Due
ASX to open lower after the lacklustre performance of US markets on Friday. Futures indicate -49pts -0.56% at 8,688 with weakness in Energy names, Miners mixed and Tech.
Watch The Block Inc (ASX: XYZ) after its NYSE listed shares jumped in after-hours trade on Wall Street on Friday. The catalyst for this was news that the Afterpay and Cash App owner's shares will be added to the benchmark S&P 500 index after Hess Corp (NYSE: HES) was acquired by energy giant Exxon Mobil
Japan - No Data Due
Market closed
Chicago Futures indicating up 260pts 0.65% at 40,010
Yen closed 148.81 Friday. Opening 148.55 on Monday.
S Korea
Market to open lower following the weak US performance on Friday and continue concerns about the impact of tariffs. Heavy rains have resulted in a rising death toll; with 14 reported dead -VE for sentiment
Market closed lower on Friday, trade volume was moderate at 389.98 million shares worth 11.84 trillion won ($8.5 billion). Decliners outnumbered gainers 589 to 303. Individuals net sold, offsetting net purchases by institutions and foreigners.
The local currency was quoted at 1,393.00 won against the greenback at 3:30 pm. Friday, down 0.4 won from the previous session.
Heavy rain continued to pound South Korea for the fourth straight day Saturday, leaving at least four people dead and forcing more than 7,000 people to evacuate their homes. Authorities warned that up to 250 millimeters of additional rainfall could fall within the day, raising concerns of further damage and casualties.
Data Due after the open
5-Year KTB Auction vs 2.655% prior
Taiwan - No Data Due
Market to open lower with pressure on Tech following Fridays lacklustre performance on Friday
China
Market to open higher after the Golden Dragon China Index closed up 46pts 0.6% at 7,728. But offshore investor sentiment weakened by the news that Wells Fargo banker, Shanghai-born Chenyue Mao, who spearheads the bank's international factoring business, being subjected to an exit ban.
FTSE A50 China Futures up 2pts 0.01% at 13,853
MSCI A50 China Futures up 4.4pts 0.21% at 2,185.2
Spot USD/CNY opening -0.0025pts -0.03% at 7.1788 level.
Spot USD/CNY added 30 bps to close at 7.1766 Friday (18th). As of 4:35 pm, USD/CNY in the night session lifted 75 bps. USD/CNH hiked 39 bps to 7.1795, 29 bps below USD/CNY.
Data Due 15 minutes before the open
Loan Prime Rate 1-Year 3% currently no changer expected
Loan Prime Rate 5-Year 3.5% currently no changer expected
Hong Kong
Market to open higher, ADR’s closed up 161pts 0.64% at 24,986 with only CLP, CCB, ICBC, Bank Of China, Tencent and CK Hutch in the red. With no major data expected out of China this week.
Futures indicate up 28pts 0.11% at 24,883
Turnover on Friday HK$238.691B vs HK$236.412B Thursday Short selling vs 15.8% Thursday
Data Due after market Monday
Inflation Rate Jun MoM vs -0.3% May (F/cast is 0.2%)
Inflation Rate Jun YoY vs 1.9% May (F/cast is 1.6%)
Data Out after market Friday
Business Confidence Q3 -8 vs -9 Q2 (F/cast was -5)
Macau - No Data Due
Singapore - No Data Due
Malaysia - Data Due
Balance of Trade Jun vs MYR 0.8B May (F/cast is MYR 8 B)
Exports Jun YoY vs -1.1% May Consensus is 5.6%)
Imports Jun YoY vs 6.6% May (Consensus is 9.7%)
GDP Growth Rate Prelim Q2 YoY vs 4.4% Q1 (F/cast is 4.2%)
Indonesia - No Data Due
Philippines - No Data Due
Thailand - No Data Scheduled this week
Myanmar - No Data Scheduled this week
Cambodia - No Data Scheduled this week
Vietnam - No Date Scheduled this week
A Tourist boat capsized in Ha Long Bay, killing 30 of the 48 passengers - a negative for the Tourism business
India - Data Due after market
Infrastructure Output Jun YoY vs 0.7% May (F/cast is 1.3%
Out after market Friday
Bank Loan Growth Jun 9.5% YoY vs 9.6% May (F/cast was 12.5%)
Deposit Growth 04 Jul 10.1% YoY vs 10.4% prior
Foreign Exchange Reserves 11 Jul $696.67B vs $699.74B prior
Europe
Eurozone No Data Due
Germany 3 & 9 Month Bubill Auction
France 12, 3 & 6 month BTF Auction
United Kingdom No Data Due
United States
Futures Dow -27pts -0.05%, S&P -0.06% and NDX -0.09%
Data Due CB Leading Index, 3 & 6 Month Bill Auction
HEADLINES & NEWS
AUSTRALIA & NEW ZEALAND
The start-up making drugs in space, then sending them to Australia at 30,870km/h. Varda Industries is aiming to create a viable industry manufacturing drugs in space, where the lack of gravity unlocks new possibilities. And Australia is well positioned to play a part.
Diggers Club does $230m facelift; Charter Hall chiefs offload $20m site; DroneShield expands. Property giant Charter Hall’s top chaps – chief executive David Harrison and finance director Sean McMahon – are part of a syndicate offloading a major site on Military Road.
JAPAN
Japan's ruling coalition is certain to lose control of the upper house in Sunday's election, public broadcaster NHK reported, an outcome that further weakens Prime Minister Shigeru Ishiba's grip on power as a tariff deadline with the United States looms. While the ballot does not directly determine whether Ishiba's administration will fall, it heaps political pressure on the embattled leader who also lost control of the more powerful lower house in October. Ishiba's Liberal Democratic Party (LDP) and coalition partner Komeito had 47 seats, one short of the 50 seats needed to secure the 248-seat upper chamber in an election where half the seats were up for grabs, NHK said early on Monday. The LDP had 39 of those 47 seats. That comes on top of its worst showing in 15 years in October's lower house election, a vote which has left Ishiba's administration vulnerable to no-confidence motions and calls from within his own party for leadership change.
Speaking late on Sunday evening after exit polls closed, Ishiba told NHK he "solemnly" accepted the "harsh result". "We are engaged in extremely critical tariff negotiations with the United States...we must never ruin these negotiations. It is only natural to devote our complete dedication and energy to realizing our national interests," he later told TV Tokyo. Asked whether he intended to stay on as prime minister and party leader, he said "that's right".
Japan, the world's fourth largest economy, faces a deadline of August 1 to strike a trade deal with the United States or face punishing tariffs in its largest export market.
The main opposition Constitutional Democratic Party was set to finish second, vote counts showed. The fringe far-right Sanseito party, birthed on YouTube a few years ago, announced its arrival in mainstream politics with its 'Japanese First' campaign and warnings about a "silent invasion" of foreigners winning broader support. It won 14 seats to one elected previously.
Finance Minister Katsunobu Kato said on Friday he was aware of bond market concerns about the country's fiscal policy ahead, in the build-up to an upper house election where the minority government is poised for another setback. Japanese government bonds plunged this week, sending yields on 30-year debt to an all-time high, after polls showed Prime Minister Shigeru Ishiba's coalition was in danger of losing its majority in the upper house vote on Sunday.
A U.S. trade deal with Japan is still possible, U.S. Treasury Secretary Scott Bessent said in a social media post on Friday, adding that "a good deal is more important than a rushed deal" and that he looked forward to continuing talks. Speaking to reporters after the meeting, Ishiba said he asked Bessent to continue "active talks" with his top tariff negotiator Ryosei Akazawa. Akazawa, who also attended the meeting, confirmed to reporters that both sides agreed to maintain a productive dialogue. Bessent left Ishiba's office without speaking to reporters. Akazawa will receive the U.S. delegation on Saturday at Expo. Tokyo is hoping to meet an August 1 deadline to reach a deal to avert President Donald Trump's tariff of 25% on goods imports from Japan as part of the global trade shakeup he has unleashed since taking office in January.
Japan plans to require listed companies to disclose the rate of change in their employees' wages in annual securities reports, as investors assess whether pay increases are outpacing inflation, according to sources close to the matter. The Financial Services Agency hopes the requirement, possibly to be implemented in reports from next June, would encourage companies to invest in human resources, viewed as key to achieving sustainable growth, the sources said. The agency plans to revise the relevant Cabinet Office order to allow the change after the proposal is discussed by a panel of experts and comments are solicited from the public, they said. Annual securities reports are also released by some other firms, including unlisted companies that have had 1,000 or more shareholders over the previous five years. In the reports, companies disclose information on the number of employees, their average age, average years of service, average annual wages, the ratio of women in managerial posts, the percentage of employees who have taken child care leave and the wage gap between male and female employees. In the planned expansion of items to be disclosed, the companies will also be required to explain the reasons for the rate of change in wages and their strategy for acquiring talent, such as experts in artificial intelligence technology, the sources said.
Alimentation Couche-Tard's attempt to create a global convenience store behemoth was set back when it pulled its $46 billion bid for Seven & i (3382.T) whose consumers in Japan have emotional ties to their purveyor of rice balls. The Canadian company, which owns Circle-K, withdrew its bid on Thursday after a year-long pursuit, citing "a calculated campaign of obfuscation and delay" by the Seven-Eleven operator and lack of engagement by its founding Ito family. Couche-Tard first disclosed the proposal in August last year, with Seven & i under pressure from shareholders to boost returns by selling off assets and focusing on its mainstay convenience store business. "ACT bid at just the right time... when Seven was at its weakest," said Michael Causton of consultancy JapanConsuming. The possibility of a takeover quickly sparked concern about whether the Seven-Eleven operator's fresh food would be affected. It also generated debate about Japan's openness to foreign takeovers. Convenience stores are an important resource in Japan during natural disasters, but Seven-Eleven's massive global presence made it a target for Couche-Tard. With Seven & i looking to avoid a takeover, it changed its self-reported national security category to "core" in September, a step which raised questions as to whether it was a defensive manoeuvre. In private, it emphasised its importance to Japan's economic security to the government, three sources familiar with the matter said. Seven & i declined to comment. Couche-Tard’s share rallied 8% on news it had pulled its bid, whislt Seven & I saw downgrades.
SOUTH KOREA
Korea may face US tariffs of between 15 to 18 percent as the country scrambles to cut a better deal with Washington, a former US trade official said Friday. “I see countries such as Korea, I see Japan in the same bucket. ... as being able to get out from under the highest tariffs that have been threatened but (only) with some kind of deal,” Michael Beeman, former assistant US trade representative for Japan, Korea and APEC, said in a video podcast released by the Korea Economic Institute of Korea. Beeman, whose US trade official tenure lasted January 2017-2023 during Trump’s first term, believes that Korea may be able to reduce the tariffs to the "15 to 18 percent (range)" if negotiations lead to a deal that the Oval Office deems successful.
South Korea is to officially repeal its decade-old handset subsidy law on Tuesday, opening the door to bigger discounts and potentially cheaper smartphones — just in time for the launch of Samsung Electronics' new Galaxy Z Flip7 and Fold7 later this month and Apple’s iPhone 17 in the fall. Industry insiders say a “subsidy war” is likely to break out, as mobile carriers rush to regain market share with aggressive pricing and subsidies. SK Telecom, in particular, is expected to take bold action after losing over 800,000 subscribers in a major April data breach. The repeal marks a major shift in the mobile phone market. Carriers and retailers will no longer be restricted by government-set subsidy limits, allowing for more flexible and competitive pricing. Phones could even be sold at “zero-cost,” depending on the plan and promotions.
Posco Future M posted a sharp drop in second-quarter profit and swung to a net loss, hit by slowing demand for EV battery materials, though the company pointed to a potential rebound in the second half of the year as new production ramps up. According to a regulatory filing on Friday by the Korean battery material producer, it logged 660.9 billion won ($474.7 million) in revenue and 770 million won in operating profit in the April to June period this year, down 27.8 percent and 71.7 percent, respectively, from the same period last year. The company reported a net loss of 33.5 billion won in the second quarter after posting a 48.9 billion won net profit in the first quarter. Posco Future M’s energy materials division was hit hardest, with quarterly revenue falling 37.6 percent from the previous quarter to 315.4 billion won, and the unit posting an operating loss of 25.5 billion won as the global EV market showed signs of slowing.
Shinsegae Group has failed to sell its mobile payment businesses after Kakao Pay withdrew from acquisition talks, the retail giant confirmed Thursday. “We had been in discussions with Kakao Pay over a strategic partnership in the mobile payment business, but decided to end the talks due to shifts in the strategic direction of both companies,” Shinsegae Group said in a statement. The two companies had been in negotiations since early this year over the sale of SSG Pay and Smile Pay, with the deal valued at around 400 billion won ($290 million) at the time, according to industry sources. Kakao Pay reportedly offered a lower price in the talks.
Amid intensifying climate shifts, geopolitical tensions and a scramble for new trade corridors, the Arctic shipping route is quickly emerging as a key part of South Korea’s maritime strategy — touted as both a paradigm-shifting opportunity and a logistical gamble. Once effectively impassable, climate change has melted the sea ice enough for the Arctic passage to be a prospective sea-route between Europe and Asia. President Lee Jae Myung and the ruling Democratic Party of Korea have made it a pillar of Korea’s long-term logistics agenda, hoping to leverage Busan's location to pit it at the forefront of this shift in global shipping. Most recently, Oceans Minister nominee Chun Jae-soo cited the Arctic route as a key reason for relocating the Ministry of Oceans and Fisheries to Busan, part of a broader plan to decentralize Seoul-centric functions and build a new growth engine in the southern port city.
Ousted conservative President Yoon Suk Yeol was indicted Saturday on additional criminal charges related to his ill-fated imposition of martial law, about three months after he was formally thrown out of office. Mr. Yoon’s additional indictments mean he will remain in jail for up to six months as he faces a trial at the Seoul Central District Court on his Dec. 3 martial law declaration that plunged South Korea into huge political turmoil. Mr. Yoon was sent back to prison last week after the Seoul court approved his arrest warrant requested by a team of investigators headed by independent counsel Cho Eun-suk.
TAIWAN
Minister of National Defense Wellington Koo yesterday praised Taiwanese troops for their work over the past 10 days, as the longest-ever live-fire component of Taiwan’s annual military exercises concluded early yesterday. In a teleconference to the armed forces, Koo officially announced the end of the 10-day, nine-night Han Kuang exercises that began on Wednesday last week. That was double the length of previous live-fire segments, which typically lasted five days and four nights, the ministry said in a statement.
Fitch Ratings has revised its outlook for Taiwan’s banking sector to “deteriorating” from “neutral,” amid rising pressures on profitability and asset quality. The change reflects growing concern that Taiwan’s export-heavy economy would face intensifying headwinds in the second half of this year and into next year, as cyclical demand cools and geopolitical uncertainty clouds the investment climate, Fitch said in a report issued on Thursday. Fitch forecast Taiwan’s GDP growth to ease to 2.8 percent this year and slow further to 2.5 percent next year, down from 4.8 percent last year. “External risks will weigh heavily on bank earnings and credit performance,” Fitch said.
TSMC sees currency volatility as a “big uncertainty” to its margins and is to constantly review hedging strategies to manage the impact, TSMC chief financial officer Wendell Huang said. “We use different hedging alternatives. The first one is to just simply sell the US dollar in the spot market,” Huang said. “We also use forwards contracts, and we also move part of the cash, the US dollar cash, to an offshore holding company whose financial statements are denominated in the US dollar.” Huang’s comments came after TSMC, the world’s biggest contract chipmaker, on Thursday reported better-than-expected second-quarter earnings and raised its outlook for this year’s revenue, a move that underscores resilient demand from the global artificial intelligence spending spree. TSMC shares rose 2.21 percent in Taipei trading Friday, after its stock that traded in the US +3.4 percent overnight Thursday.
Despite the bright prospects, TSMC and other Taiwanese exporters, as well as life insurers with heavy exposure to US assets, face challenges from a red-hot New Taiwan dollar that has surged more than 11 percent this year against the greenback. During an earnings call on Thursday, Huang warned TSMC’s third-quarter performance would likely face a bigger hit from a strong NT dollar. Huang estimated that every 1 percent appreciation of the NT dollar against the greenback would reduce the firm’s revenue by 1 percent. The firm last month said that it is set to inject US$10 billion in capital into an overseas unit to shore up currency hedging operations.
Chunghwa Telecom Co Friday said it has activated a new submarine cable system; the Southeast Asia–Japan Cable 2 (SJC2) jointly with its Asian partners to satisfy growing data transmission demand and enhance its network resilience. SJC2 spans about 10,500km, and connects key locations across Southeast and Northeast Asia, including Taiwan, Singapore, Thailand, Vietnam, Hong Kong, China, South Korea and Japan, Chunghwa Telecom said in a statement.
Basso Industry Corp (Pneumatic tool maker) has lowered its revenue growth target to a single-digit percentage increase for this year, from double-digit percentage growth it previously guided, as the company digests the New Taiwan dollar’s sharp appreciation while clients adopt a wait-and-see attitude amid uncertainty over US tariffs, company spokesperson Leo Chen said Friday. The company, which supplies pneumatic nail guns, automotive maintenance tools, magnesium and aluminum alloy die-cast components, as well as bicycle and car parts, reported that second-quarter revenue fell 1.8 percent year-on-year to NT$741.19 million (US$25.21 million). Orders for this month are stable, but shipments for next month could decline, Chen said.
The US House of Representatives on Friday passed the Department of Defense Appropriations Act for fiscal 2026, which includes US$500 million for Taiwan. The bill, which totals US$831.5 billion in discretionary spending, passed in a 221-209 vote. According to the bill, the funds for Taiwan would be administered by the US Defense Security Cooperation Agency and would remain available through Sept. 30, 2027, for the Taiwan Security Cooperation Initiative.
Gasoline and diesel prices are to remain unchanged this week, CPC Corp, Taiwan and Formosa Petrochemical Corp said yesterday, despite a decline in global oil prices last week. Gasoline prices at CPC and Formosa stations are to stay at NT$26.8, NT$28.3 and NT$30.3 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to remain at NT$25.6 per liter at CPC stations and NT$25.4 at Formosa pumps, they added.
CHINA
China's exports of rare earth magnets to the United States in June soared to more than seven times their May level, marking a sharp recovery in the flow of critical minerals used in electric vehicles and wind turbines after a Sino-U.S. trade deal. Outbound shipments to the United States from the world's largest producer of rare earth magnets surged to 353 metric tons in June, up 660% from May, data from the General Administration of Customs showed on Sunday. That came after pacts reached in June to resolve issues around shipments of rare earth minerals and magnets to the United States. Chipmaker Nvidia plans to resume sales of its H20 AI chips to China as part of the agreement. China, which provides more than 90% of the global supply of rare earth magnets, decided in early April to add several rare earth items to its export restriction list in retaliation for U.S. tariffs. Shipments of magnets are likely to recover further in July as more exporters obtained licences in June, analysts said. During the first half of 2025, exports of rare earth magnets fell 18.9% on the year to 22,319 tons.
Electric vehicle brands Neta and Zeekr inflated sales in recent years to hit aggressive targets, with Neta doing so for more than 60,000 cars, according to documents reviewed by Reuters and interviews with dealers and buyers. The companies arranged for cars to be insured before they were sold to buyers, the documents show, enabling them under Chinese industry car registration practices to book sales early so they could hit the monthly and quarterly targets, the dealers and buyers said. Neta booked early sales of at least 64,719 cars through this method from January 2023 to March 2024, according to copies of records it sent to dealers, seen by Reuters. That was more than half the sales of 117,000 vehicles it reported over the 15 months. Neta's effort to book sales early has not been previously reported.
Zeekr, a premium EV brand owned by Geely, used the same method to book early sales in late 2024 in the southern city of Xiamen through its main dealer there, state-owned Xiamen C&D Automobile, according to dealers, buyers and sales receipts seen by Reuters. Analysts and investors tracking China’s auto industry gauge performance and estimate inventory levels with two sets of sales data. Wholesale numbers reported by automakers to the industry association show sales from automakers to dealers, while retail data compiled from registration records of mandatory traffic insurance show the sales to users.
Vehicles booked as sold before reaching a buyer are called "zero-mileage used cars" in the Chinese auto industry. The practice has emerged out of cutthroat competition for sales in the world's largest auto market, which is reeling from a brutal, years-long price war caused by chronic overcapacity. The industry faces a moment of reckoning, with state media calling out the zero-mileage car practice, China's cabinet pledging to regulate "irrational" competition, and other central government bodies organising meetings with the industry's largest players to express concern about such methods.
On Saturday a publication run by the China Association of Auto Manufacturers said the industry ministry was planning to clamp down on the practice by banning cars from being resold within six months of being registered as a sale. Also on Saturday, Chinese state media reported that Zeekr had been selling cars with insurance already purchased to inflate sales, the first such naming of a specific automaker in a sign that Chinese authorities are getting more serious about the crackdown. In a front-page story, the China Securities Journal newspaper, one of China's most important government-owned financial publications, interviewed Zeekr car buyers in cities such as Guangzhou and Chongqing, who the newspaper said had found that their cars already had insurance policies before they were sold.
Tao Qing, spokesperson for China's Ministry of Industry and Information Technology (MIIT) and director of the Operation Monitoring and Coordination Bureau, revealed at a press conference held by the State Council Information Office that work plans for stable growth in the machinery, automotive, and power equipment industries will be released soon to enhance high-quality supply capacity and optimize the development environment of these industries. In addition, the MIIT will issue a digital transformation implementation plan for the automotive industry and implement digital transformation plans for the machinery and power equipment industries.
Xie Cun, Director of the Department of Information and Communication Development at China's Ministry of Industry and Information Technology (MIIT), said at the State Council Information Office's press conference that, recently, the MIIT will work with the relevant departments to print and implement the digital transformation plans of industries such as textile, light industry, food and pharma, identifying the digital R&D design, flexible production and manufacturing, intelligent supply chain management optimization and other 82 typical scenarios, so as to classify development of intelligent transformation.
In 1H25, the telecom business volume of Mainland China hiked 9.3% YoY, with the aggregate telecom business revenue reaching RMB905.5 billion, Xie Cun, Director of the Information and Communication Development Department of the Ministry of Industry and Information Technology (MIIT), stated at a press conference held by the State Council Information Office. The information and communication industry maintained a sturdy operational trend overall, the Director said. The number of foreign-invested telecom enterprises exceeded 2,600, up 27% from that in the same period last year, fully reflecting the persistent attractiveness of the mainland telecom market to foreign capital.
The FT Friday morning Asia time reported that if the Chinese shipping company COSCO Group is unable to participate in the sale of Panama ports by CKH Group's Hutchison Port, Beijing will block the sale plan involving over 40 ports, foreign media reported, quoting people familiar with the matter. China's Ministry of Foreign Affairs spokesperson Lin Jian, during a routine press conference, stated that he is not aware of the situation in the report. Regarding CKH's sale of overseas ports, China's State Administration for Market Regulation will protect market fair competition according to the law and safeguard public interests. Lin emphasized that China consistently opposes using economic coercion and bullying to infringe on other countries' legitimate rights and interests.
From June 16 to July 15, 2025, rental transactions in Shenzhen hit a nearly six-year record high with a YoY increase of 11.5%, according to Beike Research Institute. The influx of recent graduates led to a spike in transactions in the second half of June, and the rental demand from college graduates further accelerated in July.
Microsoft on Friday said it will stop using China-based engineers to provide technical assistance to the U.S. military after a report in investigative journalism outlet ProPublica sparked questions from a U.S. senator and prompted Defense Secretary Pete Hegseth to order a two-week review of Pentagon cloud deals. The report detailed Microsoft's use of Chinese engineers to work on U.S. military cloud computing systems under the supervision of U.S. "digital escorts" hired through subcontractors who have security clearances but often lacked the technical skills to assess whether the work of the Chinese engineers posed a cybersecurity threat. Microsoft, a major contractor to the U.S. government, has had its systems breached by Chinese and Russian hackers. It told ProPublica it disclosed its practices to the U.S. government during an authorization process. On Friday, Microsoft spokesperson Frank Shaw said on social media website X the company changed how it supports U.S. government customers "in response to concerns raised earlier this week ... to assure that no China-based engineering teams are providing technical assistance" for services used by the Pentagon.
China lead poisoning: disease control agency, hospital faked results, probe finds Ten officials in China’s northwestern Gansu province under investigation for oversight gaps in case that left more than 200 kindergarten children with high blood lead levels. This comes nearly two weeks after police in Gansu’s Tianshui city detained eight people over their involvement in the poisoning that left more than 200 kindergarteners with high lead levels in their blood, in a case that shocked the nation. According to an investigation report released by the provincial government on Sunday, the Gansu Provincial Centre for Disease Control and Prevention (CDC) and the Tianshui Second People’s Hospital manipulated testing procedures and results for children from Heshi Peixin Kindergarten.
HONG KONG
Economy
The composite interest rate, which is a measure of the average cost of funds of banks, decreased by 35 bps to 1.26% at the end of June 2025, from 1.61% at the end of May 2025. The decrease in composite interest rate reflected the decreases in the weighted funding cost for deposits during the month.
Earnings
GWMOTOR (02333.HK) has announced its interim results for the period ended June 2025. The company's total operating revenue rose by 1% YoY to RMB92.367 billion, while its net profit amounted to RMB6.337 billion, down 10.2% YoY, with EPS at RMB0.74.
HSBC HOLDINGS (00005.HK) announced it will hold a board meeting on July 30, 2025, to consider the announcement of the interim results for the six-month period ended June 30, 2025, and the payment of a second interim dividend for 2025 on the ordinary shares.
Buybacks
PRU (02378.HK) repurchased 329,900 ordinary shares of the company on the London Stock Exchange on July 17 at prices ranging from GBP9.12 to GBP9.24, involving approximately GBP3.0255 million. Since the share buyback authorization was passed, the company has repurchased approximately 23.37 million shares in aggregate, representing 0.897271% of its issued share capital.
HSI Short Selling Friday 16.4% vs 15.8% Thursday
Top shorts Bidu (9888) 41%, CK Asset (1113) 35%, Nongfu Spring (9633) 34%, Bud APAC (1876) 34%, Henderson Land (12) 33%, Hansoh Pharma (3692) 32%, CM Bank (3968) 32%, China Shenhua (1088) 31%, Zijin Mining (2899) 31%, New Oriental (9901) 30%, MTRC (66) 30%, NTES-S (9999) 30%, BYD (1211) 30%, China Hongqiao (1378) 30%, CCB (939) 28%, Xinyi Glass (868) 28%, SHKP (16) 28%, Wharf REIC (1997) 28%, Wuxi Apptec (2359) 27%, OOIL (316) 26%, Zhong Sheng (881) 26%.
WATCH
TENCENT (00700.HK)'s substantial shareholder, Prosus, reduced its stake in TENCENT by 371,000 shares on Thursday (17th), cashing out about $191.5 million, at an average price per share of $516.0776, with the transaction taking place in Hong Kong, according to shareholding disclosures. Hence, the current shareholding ratio of Prosus decreased from 23% to 22.99%. Public information shows that Prosus last reduced its stake on 6 January 2025, when it cut its stake by 367,000 shares at an average price of $409.7318.
HSBC HOLDINGS (00005.HK) is disbanding a team dedicated to identifying and managing geopolitical risks, Bloomberg reported, citing sources familiar with the matter. The disbanding will impact fewer than 10 positions across Asia, Europe, and other regions, and some employees have already been given an opportunity to apply for other roles within the bank. The report quoted a statement released by HSBC HOLDINGS saying that the bank will continue to focus on helping clients navigate a complex and rapidly changing international environment.
In an interview, He Xiaopeng, Chairman and CEO of XPENG-W (09868.HK) said he expects that low-flying airplanes will change the way people travel between cities in the next decade, according to Chinese media. XPENG-W has more than 10 years of research and development experience in the flying car field, and its first flying car can be folded and automatically stowed in the car trunk, He added. XPENG-W is expected to become the world's largest aircraft manufacturer if its flying car is mass-produced in 2026.
POP MART (09992.HK) announced that the Company granted about 199,400 Awards, representing the same number of underlying Shares, to the Grantees in accordance with the terms of the Post-IPO Share Award Scheme. After the grant of such Awards, about 131 million and 13.6636 million underlying Shares are available for future grant under the scheme mandate limit and the service provider sublimit, respectively, of the Share Award Scheme as approved at the annual general meeting of the Company held on May 17, 2023.
Friday closings in EUROPE & US
DAX -0.33%, CAC 0.01%, FTSE 0.22%
European markets opened higher, FTSE trade sideways in a tight range. DAX and CAC traded sideways initially but then sold down from late morning in reason to Trump’s tariff threat. Weakness in Healthcare, Tech and Auto’s. While Energy names were higher. Markets largely ignoring good results from Saab 16%, and Burberry 6.3% plus Vestas Wind 15% announcing a new contract.
BP 0.6% off initial highs, after it announced the sale of its U.S. onshore wind business, BP Wind Energy, to U.S.-based LS Power. The deal, which comes as part of BP's $20 billion divestment program, is expected to be concluded by the end of the year.
DOW -0.32%, NDX 0.05%, S&P -0.01%, Russel 2K -0.61%
US markets opened slightly higher S&P and NDX traded around flat but the DOW dipped initially and then sideways; as Trump announced wanting at a 15% -20% tariff on EU imports. The Prelim University of Michigan’s Survey of Consumers for July reflected overall consumer sentiment rose 1.8% from June to 61.8, coming out exactly in line with the estimate and at the highest level since February.
Housing starts -14.7% MoM (-21.4% YoY) and building permits prelim 0.2% MoM vs -2% prior showed some improvement and were close to expectations.
Netflix sold down despite good results after saying its 2H operating margin would be lower than 1H. Amex also weak post earnings despite beating Q2 forecasts.
Chevron -0.9% having opened 3% plus, while Hess jumped more than 7% after Chevron won against Exxon Mobil -3.5% in a dispute over Hess’s offshore oil assets in the South American nation of Guyana. That clears the path for Chevron to complete its $53 billion acquisition of Hess.
Banks JPMorgan Chase 0.47%, Citigroup 0.39% Wells Fargo 1.17%, Amex -2.35%
Ecommerce Meta 0.41%, Apple 0.55%, Amazon 1.01%, Netflix -5.1%, Disney -0.65%, Zoom Comms 0.34%, Alphabet 0.67% and Microsoft -0.32%,
Tech NXP Semi 0.62%, Nvidia -0.34%, Micron 1%, AMD -2.13%, Skyworks 0.78%
Industrial/Discretionary Boeing -0.72%, Caterpillar -1.04%, Simon Property 0.08%, Kohl’s -0.52%, Gap -0.74%, United Airlines 1.13%, Carnival 0.34%, Wynn Resorts -2.44%,
Auto Ford 0.09%, GM 0.02%, Tesla 3.21%,
Energy Chevron -0.89%, Exxon Mobil -3.48%,
Consumer Staples Campbell Soup -1.02% General Mills -0.38%, JM Smucker -2.52%
US DAILY CLOSING DATA
USD weaker, Bitcoin -0.53% at 117,397.81 (Monday morning Asia), VIX -0.67% at 16.41,
US T10 -4 bpts to 4.423% and T2 -4 bpts at 3.87%, T30 -2 bpts at 4.99%
OIL Brent -0.3%, WTI -0.2% on mixed US data and new EU sanctions on Russia
Gold 0.3%, Silver 0.32%, Copper 1.25% Platinum -1.09%, Palladium -1.16%.