Asian Macro Initial Thoughts: Cautious trading with lots of PMI data due. Trumps bill faces an uncertain future and US jobs tonight

NZX opened lower and testing the 12,700 support before seeing a meaningful bounce, currently -56pts -0.44% at 12,728

Overview.
The One Big Beautiful Bill stalled in the House as some of his own party rebel against some concessions granted to get it through the Senate. Trump is likely to pressurise them to fall into line to get the bill passed and onto his desk for July 4. He is also continuing his attacks on Powell, on his platform Truth Social; calling him to resign. Powell has already made clear that he has no intention of doing so.

The S&P 500 formed a “golden cross” on Tuesday, which is when its 50-day moving average crosses above a rising 200-day moving average. Traders view this as a bullish signal for momentum. The last time the broad market index formed a golden cross was in July 2020 as stocks were recovering from the pandemic-induced sell-off.

Also worth noting that Short sellers have lost $300 billion or 22% since the stock market bottom on April 8, according to S3 Partners, a researcher that specializes in tracking short selling. Over the same time, the S&P 500 and Russell 3000 indexes have each risen 24% while the Nasdaq Composite is higher by 33%, S3 said.

Eben with the the latest losses, short interest is still up by $139 billion, or 10.5%, in 2025, according to figures from Ihor Dusaniwsky, S3′s head of predictive analytics. By sector, the largest losses since the April bottom (through Friday, June 27) came in technology, down $105 billion, consumer discretionary (-$41 billion) and industrial stocks (-$37 billion). By company, the largest losses in dollar terms were in Nvidia, Tesla and Microsoft. The most profitable trades for short sellers since the April low came in UnitedHealth Group, Sarepta Therapeutics and Bristol-Myers Squibb

Iran suspending its cooperation with UN nuclear watchdog met may mount an attack on the US, which some expect to come on July 4. Which comes as Trump says Israel has agreed a 60 days cease fire, Hamas has yet to respond, although Trump has warned them that they ought to. Netanyahu said that there would be no Hamas in the futures as he travels to the US to meet Trump

The Dalai Lama yesterday assured his followers that upon his death he would be reincarnated as the next spiritual leader of Tibetan Buddhism and spelled out a succession process that sets up a renewed clash with China. The eagerly awaited statement, made days before the frail Nobel peace laureate turns 90, puts to rest speculation, started by the Dalai Lama himself, that he might be the last of Tibet’s spiritual leaders, ending a line that stretches back centuries. Speaking during a week of celebrations in the northern Indian hill town of Dharamshala to mark his birthday, the Dalai Lama said a nonprofit institution he has set up would have the sole authority to identify his reincarnation, countering China’s insistence that it would choose his successor.

Beijing yesterday reiterated that it had to approve the reincarnation and that it had to be done in China through a centuries-old ritual. Beijing views the Dalai Lama, who fled to India from Tibet in 1959 after a failed uprising against Chinese rule, as a separatist. The Dalai Lama has said his successor would be born outside China and urged his followers to reject anyone chosen by Beijing. In previous years, he had also said it was possible that there might be no successor at all. “I am affirming that the institution of the Dalai Lama will continue,” the Dalai Lama said in a video message, setting off cheers and applause from more than 100 monks in maroon robes who had gathered in a library in Dharamshala.

Housekeeping
This afternoon I will be on RTHK’s The Close, with Nitan Dialis
If there is a topic you want discussed 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

Last Monday I was on RTHK’s Money Talk with host Chloe Feng and Le Xia, Asia Chief Economist at BBVA Research. Looking at the outlook for stocks, key being that there is a lot of uncertainty ahead but key it that at least the US and China are talking even if they are telling the market about the details of their agreement. I remain cautious because of the lack of transparency and the fact that trade deals usually take months if not years to agree.
Click the link below if you have a topic you would like discussed for the next one or if you just want to listen to the programme.
https://www.rthk.hk/radio/radio3/programme/money_talk

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 - 'The Ratchet and the Sausage Machine’. 'Trump the deal maker has learned the hard way that, to use arch Politician Tony Blair’s favourite phrase, “ Politics is the art of the possible”. Anyone who has seen the television series House of Cards will recognise the compromises and political wrangling needed to pass a Bill in the House. Trump’s Big Beautiful Bill (BBB) was primarily about preventing the sunsetting of the tax cuts that he passed in his previous term and thus was not so much about cutting taxes as preventing them rising.’

Musk’s DOGE campaign was about highlighting the ‘fat’ in the existing administration and hence make the case for Trumps Big Beautiful Bill. Which additionally Trump considers to benefit his enemies.

The result is a radical and possible stimulatory policy, with an unproven outcome but the covid experience suggests that giving more cash to US individuals results in them spending. He also touches on the implications of Section 899 which allows the US to tax foreigners if Trump feels their governments do things he doesn’t like.

You can find the whole article here

Market opening indications and data

New Zealand - No Data Due
NZX opened lower and testing the 12,700 support before seeing a meaningful bounce, currently -56pts -0.44% at 12,728

Australia
ASX to open lower as futures indicate -11pts -0.13% at 8,587 despite strength in energy and miners. PMI data out pre market better than expected could ease the downward pressure.
Ex Dividend ALS Ltd and could trade lower. In May its board declared a final dividend of 19.7 cents per share. Eligible shareholders will be receiving this payout later this month on 25 July.
Data Out Pre Market
Compsite PMI Final Jun 51.6 vs 50.5 May (F/cast was 51.2)
Services PMI Final Jun 51.8 vs 50.6 May (F/cast was 51.3)
After the open
Balance of Trade May vs A$5.413B Apr (F/cast is A$5.2B)
Exports May vs -2.4% Apr
Imports May vs 1.1% Apr

Japan
Market to open lower.
Nikkei 225 Futures indicate -50tps -0.13% at 39,740
Chicago Futures up 55pts 0.14% at 39,855
Yen 143.61 Wednesday's close in US. Opening 143.59 in early trades
Data Due Pre Market
Foreign Bond Investment vs ¥615.5B Prior
Stock Investment by Foreigners vs ¥-524.3B Prior
After the open
Composite PMI Jun vs 50.2 May (F/cast is 51.4)
Services PMI Final Jun vs 51.0 May (F/cast is 51.5)
BoJ’s Takada speaks
Lunchtime
30-Year JGB Auction vs 2.904% prior

S Korea
Market to open lower with cautious sentiment over the US jobs report due tonight.
Wednesday stocks closed lower, tade volume was moderate at 691.15 million shares worth 14.59 trillion won ($10.73 billion), with winners beating losers 451 to 433. Foreign investors net sold while individuals and institutions net bought. The local currency was quoted at 1,350 won against the greenback at 3:30 pm Wednesday, down 2.8 won from the previous session.
Data Due
Foreign Exchange Reserves Jun $410.2B vs $404.6B May (F/cast was $403B)

Taiwan - No Data Due
Market to open higher with support from Tech although FX remains a concern.

China
Market to open lower after the Golden Dragon Index closed up 4pts +0.06% at 7,358
Spot USD/CNY opening up 0.0008pts 0.01% at 7.162
Data Due after the open
Caixin Services PMI Jun vs 51.1 May (F/cast is 51.3)
Caixin Composite PMI Jun vs 49.6 May (F/cast is 50.2)

Hong Kong - No Data Due
ADR’s closed -37pts -0.15% at 24,288 with only CLP, SHKP, CCB, AIA and Bank of China HK in the green.
Turnover on Wednesday was HK$240.225B vs HK$242.234B Monday, low considering the market had been closed on Tuesday; especially after the Macau GGR for June was up 19% YoY and New World announced securing a $88.2bn bank financing agreement
Data from After Market Wednesday
Retail Sales May 1.9% YoY vs -3.3% Air (F/cast is -4%)
Of the total retail sales value in May 2025, online sales accounted for 8.3%. The value of online retail sales in that month, provisionally estimated at $2.6 billion, increased by 0.3% YoY. The revised estimate of online retail sales in April 2025 decreased by 3.7% YoY
A government spokesman said that retail sales performance saw improvement in May 2025. The value of total retail sales up 2.4% YoY. On a seasonally adjusted basis, the value of total retail sales increased by 7.0% MoM. Looking ahead, the spokesman said that while the retail sector continues to adapt to the changes in consumption patterns, the Government's proactive efforts in promoting tourism and mega events, in tandem with the increase in employment earnings and sustained steady growth of the Mainland economy, will help bolster consumption sentiment and support the consumption market.

Macau - No Data Due

Singapore - Data Due Pre Market
Global PMI Jun 50 vs 51.5 May (F/cast is 51.5)
Later
6 month T Bill Auction vs 2% prior
Data from After Market Wednesday
Manufacturing PMI Jun vs 49.7 May (F/cast is 50.8)

Malaysia - No Data Due
Indonesia - No Data Due
Philippines - No Data Due
Thailand - No Data Due
Myanmar - No Data Scheduled this week
Cambodia - No Data Scheduled this week
Vietnam - No Date Due

India - Data Due After the Open
Services PMI Jun vs 59.3May (F/cast is 61.0)
Composite PMI Jun vs 58.8 May (F/cast is 60.7)

Europe
Eurozone Services & Composite PMI Final
Germany Composite & Services PMI Final, New Car Registered
France Composite & Services PMI Final, OAT Auction, New Car Registrations
United Kingdom DMP 1Y CPI Expectations, DMP 3M Output Expectations, Composite & Services PMI

United States
Futures opened Dow 27pts 0.06%, S&P 0.03% and NDX 0.1%
Data Due Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings, Participate Rate, Average Weekly Hours, Government Payrolls, Manufacturing Payrolls, Non Farm Payrolls Private, U-6 Unemployment Rate, Balance of Trade, Exports, Imports, Initial Claims, Continuing Claims, Jobless Claims 4 week average, Composite & Services PMI, ISM Services Data (PMI, Business Activity, Employment, New Orders, Prices), Factory Orders & Ex Transportation, EIA Natural Gas Stocks Change, 4 & 8-Week Bill Auction, 15 & 30 year Mortgage Rate, Baker Huges Oil Rig Count, Fed Balance Sheet

HEADLINES & NEWS

AUSTRALIA & NEW ZEALAND
Qantas mixed as passengers are being warned to remain vigilant after criminals hacked into up to six million customer accounts. Meanwhile, the airline welcomed its long-awaited new Airbus.

For-profit childcare operators defend ‘highly regulated’ system amid calls for reform. While advocates float plans to weed out paedophiles from early learning sector, private operators of centres that employed accused abuser back current protocols.

Goblin doll Labubu’s evil twin contaminating Australian supply, authorities warn. On Tuesday, NSW Fair Trading warned Australian shoppers of scams relating to a fake viral doll.

‘We wanted a five-minute plan’: Domino’s chairman denies pushing CEO out the door. Investors have been left bewildered by the ongoing leadership instability at Australia’s biggest pizza chain.

The tech billionaire, the beautician and the backlash. New details have emerged about how Richard White funds the extravagant lifestyle of his American lover, Kimberlee Cvitash, and how some of his investments have gone bad.

The Sydney Morning Herald running a story Trump’s $942 million windfall reshapes his fortune. A deep dive into Donald Trump’s fortune reveal an unprecedented and unmistakable shift in how he and his family are buttressing their empire — and how much more quickly they stand to potentially profit from their fame, influence and power.

JAPAN
PM Ishiba faces a tough test in an upper house election later this month as his minority government struggles after its major defeat in last year's snap election. He has survived so far, though he had to make some concessions to the opposition — an unusual step for the Liberal Democratic Party that has dominated Japan’s postwar politics. Official campaigning begins today for the July 20 vote for the upper house, the less powerful of Japan’s two parliamentary chambers. PM Ishiba has modest goals for the election and the opposition is divided, so the outcome is unlikely to force an immediate change of government. But it will be a tough test on Ishiba’s handling of economic woes at home and global challenges such as U.S. President Donald Trump’s tariff war.

Nissan (7201.T) is recalling 443,899 vehicles in the U.S. due to an engine failure, the U.S. National Highway Traffic Safety Administration said on Wednesday. The company identified a potential manufacturing defect in some engine components in the vehicles, which may cause engine damage or complete failure, increasing the risk of a crash, the auto safety agency said. The recall includes certain model years of the Nissan Rogue, Altima, Infiniti QX50, and Infiniti QX55 vehicles, the NHTSA recall report said, estimating that 1.2% of all vehicles have the defect. -VE

The U.S. Federal Trade Commission is seeking more details about SoftBank Group Corp's planned $6.5 billion purchase of semiconductor designer Ampere Computing, Bloomberg News reported on Tuesday. The inquiry, known formally as a second request for information, suggests the acquisition may undergo an extended government review, the report said.

The average price of land in Japan rose 2.7 percent in 2025, the fourth straight year it has climbed and the fastest pace of increase since the calculation method was changed in 2010, as the nation's booming tourist sector has pushed up values, government data showed Tuesday. With land prices also driven by developments around train stations in urban areas, the average price rose at the fastest pace for the second straight year, though some rural regions continued to see declining values. The National Tax Agency's latest survey of prices per 1 square meter of land facing major roads is used to calculate inheritance and gift taxes. It is based on data compiled by the Ministry of Land, Infrastructure, Transport and Tourism and reflects land transactions.

SOUTH KOREA
South Korea’s population could plummet to just 15 percent of its current level by 2125 if the nation’s ongoing demographic decline continues unabated, according to a private think tank in Seoul on Wednesday. In its latest long-term forecast, the Korean Peninsula Population Institute for Future used a cohort component method to project Korea’s demographic trends over the next century. This internationally recognized technique estimates future populations by incorporating factors such as birth rates, mortality rates and immigration patterns. Under the institute’s worst-case scenario, South Korea’s population could drop to 7.53 million by 2125 — a sharp fall from the current 51.68 million. This would be even less than the current population of the city of Seoul alone, which is over 9.3 million.

HMM said Wednesday it plans to expand Total Terminal International Algeciras, its semi-automated facility in southern Spain. On Monday, HMM submitted a letter of intent to the Port of Algeciras Bay Authority to initiate the first phase of expansion on the southern section of TTA. The proposed investment totals 150 million euros ($176.6 million), with HMM contributing 35 million euros. The remaining funds will be sourced through co-investor CMA CGM, the terminal's second-largest shareholder, and external financing.

South Korea’s weakening growth trajectory could eventually impact its sovereign credit rating, according to a senior analyst at S&P Global Ratings. "The Korean economy has been slowing down for various reasons," Kim Eng Tan, managing director of Asia-Pacific sovereign ratings at S&P Global Ratings, said at a press conference held in central Seoul, Wednesday, discussing growth deceleration and rising household debt. It suggested that the country's export-dependent economy may suffer from more changes in the global trading regime, sparked by the US administration’s imposition of tariffs.

Korea Investors Service, a major local credit rating agency owned by Moody’s, has affirmed its AA+ rating on Korea Zinc’s unsecured bonds, citing the company’s solid profitability, sound financial footing and diversified operations. “Korea Zinc, which operates the world’s largest single-site zinc smelter, has secured a near-monopoly in the domestic market thanks to its strong production capabilities,” the agency said in a report released Monday. “Its stable business profile is supported by a diversified product portfolio — spanning base, precious and rare metals — helping buffer earnings volatility during economic cycles.” The agency also noted that the world's largest zinc smelter has maintained strong profitability despite external headwinds such as fluctuations in global gold prices, foreign exchange rates and treatment charges.

GS Group announced Wednesday that it held an artificial intelligence-themed forum on Tuesday, bringing together industry experts to discuss the current state and future of AI agents. The group's third GenAI Connect Day spotlighted AI’s real-world use cases, a shift from the conceptual discussions of past events, while fostering collaboration opportunities among AI practitioners. Speakers who shared insights on the latest AI agent technologies and their practical applications included key figures behind GS’s AI transformation platform MISO; Klaire Baek, staff manager of Microsoft’s GitHub Copilot; Craig Doeden and Edward Kong from US AI startup Articul8; and Lee Kyung-rok, CEO of AI solution developer BrainCrew. The group’s efforts to promote AI knowledge exchange reflect Chairman Huh Tae-soo’s philosophy, which calls for the rapid integration of AI across industries as a “critical engine” for enhancing the competitiveness of Korean companies.

TAIWAN
The National Security Bureau (NSB) yesterday urged Taiwanese to exercise caution when using Chinese social media mobile applications due to potential privacy and national security issues, following an inspection of apps such as TikTok and Xiaohongshu (known as RedNote in English). The inspections by Taiwan’s top intelligence agency of five apps, which also included the Chinese social media platforms Sina Weibo and WeChat, as well as Baidu Cloud, found serious contraventions of users’ communications security across several indicators, the bureau said in a statement. The inspections, conducted jointly with the Ministry of Justice Investigation Bureau and the Criminal Investigation Bureau, covered 15 indicators in five categories: personal data collection, excess usage of permissions, data transmission and sharing, system information extraction and access to biometric data. The review revealed that all five apps failed to meet many of the indicators, with Xiaohongshu, the Chinese equivalent of Facebook, failing to meet all 15 of them, the NSB said. Sina Weibo and TikTok did not meet 13 of the 15 indicators, while WeChat failed 10 and Baidu Cloud nine. “These findings suggest that the China-made apps present cybersecurity risks far beyond the reasonable expectations for data-collection requirements taken by ordinary apps,” the bureau said in the English-language statement.

Two senior Philippine officials and one former official yesterday attended the Taiwan International Ocean Forum in Taipei, the first high-level visit since the Philippines in April lifted a ban on such travel to Taiwan. The Ocean Affairs Council hosted the two-day event at the National Taiwan University Hospital International Convention Center. Philippine Navy spokesman Rear Admiral Roy Vincent Trinidad, Coast Guard spokesman Grand Commodore Jay Tarriela and former Philippine Presidential Communications Office assistant secretary Michel del Rosario participated in the forum.

The Ministry of Economic Affairs would continue to offer the nation’s small and medium-sized enterprises (SMEs) financial assistance, and encourage the use of hedging tools against foreign exchange volatility, as the sharp appreciation of the New Taiwan dollar since early May has seriously affected their operations, Deputy Minister of Economic Affairs Ho Chin-tsang said yesterday. The ministry would step up promotion of three hedging tools, including foreign exchange forward contracts, foreign exchange options and natural hedging to SMEs, while helping them connect with banks to explore alternative hedging instruments, Ho said at a news conference in Taipei. Firms most affected by the sharp appreciation of the NT dollar are those in the metal, machine tools, machinery, textiles, plastics and rubber, auto parts, food, electronic components, and information and communications industries, he said. The ministry has set up a foreign exchange response team, which is expected to run for at least three months to offer SMEs clear countermeasures, accessible consultation and practical tools they can use when needed, Small and Medium Enterprise Startup Administration Director-General Lee Guann-jyh said. The ministry earlier yesterday held a meeting with eight state-run banks — Bank of Taiwan Co, Land Bank of Taiwan Co, Taiwan Cooperative Bank Ltd, First Commercial Bank Co, Hua Nan Commercial Bank Ltd, Chang Hwa Commercial Bank Ltd, Mega International Commercial Bank Co and Taiwan Business Bank Co to discuss how to assist SMEs. The ministry would continue talks with the banks on further lowering fees for SMEs applying for financial aid, it said.

Taipei Fubon Commercial Bank Co, the banking arm of Fubon Financial Holding Co, has secured Financial Supervisory Commission (FSC) approval to open a branch in the Gujarat International Finance Tec-City (Gift City), a business center in western India. The bank on Tuesday said that it canceled a plan to set up a branch in Mumbai and is eyeing Gift City, believing that the location would allow it to be more effective in serving businesses in the South Asian country. On its Web site, Gift City says it is a global financial and technology hub that offers single-window clearances and approvals, and provides plug-and-play infrastructure for businesses hoping for fast growth.

The number of accounts created to trade on the Taiwan Stock Exchange (TWSE) hit a new high last month, even if market sentiment was affected by US President Donald Trump’s tariff polices, the exchange said yesterday. There were 13.48 million trading accounts opened as of the end of last month, up about 32,000 from the end of May, and also up 264,000 from the end of last year, TWSE data showed. The stock market took a major hit in April, after Trump announced sweeping tariffs on most US trading partners, including a 32 percent duty for Taiwan, and has remained jittery since then due to Trump’s threats to impose tariffs on semiconductors, the backbone of Taiwan’s exports, and the rapid appreciation of the New Taiwan dollar against the US dollar, meaning foreign exchange losses for Taiwanese exporters.

CHINA
The U.S. cleared the way to resume ethane exports to China on Wednesday, sending letters to producers Enterprise Products Partners (EPD.N) and Energy Transfer (ET.N) rescinding a restrictive license requirement put in place just weeks ago, a sign that the U.S.-China trade truce was on track. The U.S. had placed restrictions on ethane -- and a wide swathe of other exports -- to China in late May and early June after accusing Beijing of slowing shipments of rare earths vital to automakers and other industries.

The European Union's top diplomat urged China's foreign minister on Wednesday to end restrictions on rare earths exports and warned that Chinese firms' support for Russia's war in Ukraine posed a serious threat to European security, the EU said. The statement from the EU's diplomatic service came after Kaja Kallas, the bloc's high representative for foreign policy, met Chinese Foreign Minister Wang Yi in Brussels. China says it does not provide military support to Russia for the war in Ukraine. But European officials say Chinese companies provide many of the vital components for Russian drones and other weapons used in Ukraine. Kallas called on China "to immediately cease all material support that sustains Russia’s military industrial complex" and support "a full and unconditional ceasefire" and a "just and lasting peace in Ukraine”. Wednesday's discussions were to lay the groundwork for a summit between EU and Chinese leaders later this month. Wang also met earlier in the day with European Council President Antonio Costa as part of those preparations. In that meeting, Wang called on both sides to respect each other's core interests and increase mutual understanding, adding that "unilateralism and acts of bullying have seriously undermined the international order and rules," according to a Chinese foreign ministry statement.

Chinese automaker Changan (000625.SZ) plans a European factory to support its future sales on the continent and is already weighing up possible locations for the plant, an executive told Reuters on Wednesday. "We're committed to being in Europe, making in Europe for Europe," said Nic Thomas, Changan's European head of marketing, sales and service, during a test drive of the automaker's electric Deepal S07 SUV at an event outside London. "We're working on local manufacturing solutions here.” Changan said in March that it plans to enter 10 markets across Europe this year with electric vehicle models. Thomas, who also runs Changan's UK operations, said the automaker will start selling the Deepal S07 to British consumers this year, with deliveries starting in September.

Alpha and Omega Semiconductor has agreed to pay $4.25 million to settle with the U.S. Department of Commerce for shipping items to China's Huawei Technologies in violation of export regulations, according to a department order posted on Wednesday. AOS engaged in prohibited conduct by forwarding 1,650 power controllers, smart power stages and related accessories to Huawei without authorization in 2019, the year Huawei was added to a restricted U.S. trade list, the order said.

A prominent Chinese Communist Party publication called for a crackdown on competition that fuels price wars and squeezes profits in various industries, criticising large companies and local governments for unfair practices. In the most strongly-worded Communist Party warning yet on industrial overcapacity risks, the Qiushi article on Tuesday said price wars cause "enormous waste of social resources," and unsustainable debt that could endanger long-term growth. The warning follows mounting concerns over deflationary pressures in the world's second-largest economy and as U.S. President Donald Trump's tariffs threaten global demand, which China relies heavily on for its ambitious growth targets. Public messaging against price wars has increased in recent weeks in China, with top leaders pledging on Tuesday to increase regulation against aggressive price-cutting and state media carrying front-page editorials against what it described as a race to the bottom. This is fuelling hopes of new policies allowing unprofitable factories to close or improving consumer incomes, though analysts warn Beijing may struggle to convince local governments to rein in access to cheap credit over fears of job losses. The Qiushi article, written under a pseudonym, focused on "involutionary competition" where firms and local governments invest capital to chase market share amid limited demand and fail to achieve revenue growth. It singled out industries such as photovoltaics, lithium batteries, electric vehicles, and e-commerce platforms. Solar manufacturers called last month for an end to price wars, while on Tuesday car dealers in eastern China complained some automakers are pressuring them to sell cars below cost, warning of high inventories and cash flow risks. The Qiushi article also highlighted problematic corporate behaviour such as compromising on product quality to cut costs, which weakens innovation and reduces research and development investments and harms overall consumer interests. Other firms expand their capacity while delaying payments to suppliers and contractors, squeezing the entire industrial chain, it said. The magazine also offered rare criticism of local officials, saying they should step in more as regulations have not kept up with the development of new industries and business models. Bankruptcy mechanisms are also "imperfect," preventing curbs to excessive supply.

Fiji’s prime minister yesterday said that China should not be allowed to gain a permanent military foothold in the strategically contested South Pacific region, adding that a potential conflict in the Taiwan Strait would impact Pacific islands. Fijian Prime Minister Sitiveni Rabuka said China does not need a military base in the region to project power, as shown by an intercontinental ballistic missile test. China has spent years cementing its influence in a string of Pacific island nations, challenging traditional security partners such as the US and its ally Australia. The islands are trying to cope with a big, powerful China seeking to spread its influence, Rabuka told the National Press Club in the Australian capital, adding that Beijing understood he would lobby other Pacific leaders against such a base.

HONG KONG
Indexes
Hang Seng Indexes Company Limited will announce the results of the 2Q25 review of the Hang Seng Family of Indexes on August 22 (Friday). The constituent changes will be made to the Hang Seng Family of Indexes with effect from September 8, 2025 (Monday).

IPO
Cloudbreak-B(02592.HK), which will be listed today opened up 27.7% to $12.9 on gray market. Peaking/ bottoming at $12.9/10.1, it closed at $10.46, up 3.6% or $0.36 from the listing price, on volume of 3.27 million shares and turnover of $35.81 million, excluding handling fee, the book gain was $180 per board lot size of 500 shares according to Futu data. On the PhillipMart platform it opened up 34.7% to $13.6 on gray market. Peaking/ bottoming at $13.6/10.2, it closed at $10.6, up 5% or $0.50 from the listing price, on volume of 1.93 million shares and turnover of $21 million. Excluding handling fee, the book gain was $250 per board lot size of 500 shares.

Buybacks
TENCENT (00700.HK) repurchased 996,000 shares of the company on the HKEX today (2nd) at prices ranging from HKD500.5 to HKD508, involving approximately HKD500 million. Since the ordinary resolution was passed on May 14, 2025, TENCENT has repurchased a total of 31.449 million shares, representing about 0.34% of its share capital.

HSI Short Selling Wednesday 16.1% vs 12% Monday
Top shorts Bud APAC (1876) 55%, CM Bank (3968) 55%, Hansoh Pharma (3692) 43%, Chow Tai Fook (1929) 38%, Sunny Optical (2382) 32%, Zijin Mining (2899) 31%, SHKP (16) 31%, Ali Health (241) 30%, Henderson Land (12) 28%, Wharf REIC (1997) 28%, CK Asset (1113) 27%, New Oriental (9901) 26%, Li Auto (2015) 26%, MTRC (66) 26%, Hang Seng Bank (11) 25%, Zhong Sheng (881) 25%, BYD (1211) 25%

WATCH
GEELY AUTO (00175.HK) announced that it will introduce Geely-branded cars in the UK, with the first model being the SUV EX5, set to launch in 4Q. This marks Geely's first entry into the UK automobile market under its own brand name. The EX5 is still undergoing intensive development to meet the standards of UK car buyers, GEELY AUTO remarked. It will be the first of a high-quality, accessible, and diverse range of automotive products tailored for the UK market.

Baidu Search announced at BIDU-SW (09888.HK)'s AI Day Open Day its largest revamp in a decade, which has introduced comprehensive upgrades to the search box, search results page, and the search ecosystem. Among them, the Baidu search box has been upgraded to a "Smart Box", which not only supports text input of over a thousand characters but also has its capabilities for photo, voice, and video input enhanced. Users can also directly access AI writing and AI image generation tools. The upgraded "BaiKan" function now supports mixed output of text, images, audio, and video, while integrating agents and real-person services.

Clients have adopted a cautious approach to US asset allocation amid the recent market volatility, partly due to uncertainty over trade policy and growing concerns over the US fiscal deficit, Elaine Wu, Head of APAC Investment and Portfolio Solutions at BlackRock, said. US-listed stocks and ETFs saw net sells in June for the first time since May 2023, Wu added. Meanwhile, over the past 3 months (April to June), Asian equity ETFs saw positive capital inflows, with US$19 billion flowing into mainland China's equity ETFs and US$5 billion flowing into Hong Kong equity ETFs. BlackRock held a neutral stance on China equities, and remained cautious amidst trade policy uncertainties, with still limited policy stimulus. However, BlackRock believed that targeted support from priority sectors may offer selective opportunities. BlackRock held an Overweight view on US and Japanese stocks.

AliExpress, a cross-border e-commerce platform under BABA-W (09988.HK) (BABA.US) now has over 9 million active users in South Korea. In June, it launched a new travel channel named AliExpress Travel to offer 24-hour Korean-language customer service and allow users to book more than 1.5 million hotels worldwide, 25,000 direct flight routes, and tickets to over 8,000 attractions and theme parks.

Alibaba Cloud, the cloud computing arm of Chinese tech giant Alibaba Group, announced the opening of its third data center in Malaysia on Tuesday and disclosed plans to launch a second data center in the Philippines in October, according to a statement released on Wednesday. The expansion ensures that Alibaba Cloud can meet the rising global demand for secure, resilient and scalable cloud services, the company said.

Despite ongoing global economic challenges, Hong Kong’s banking sector demonstrated robust growth and operational resilience in 2024, according to KPMG’s latest Hong Kong Banking Report. The report provided an in-depth analysis of the banking sector’s overall performance in 2024 and explored key trends shaping the future of banking, including geopolitics, credit risk, digital asset innovation, and AI transformation. KPMG stated that AI has already delivered tangible and quantifiable value to Hong Kong’s banking industry. However, banks must effectively address concerns related to governance, risk, and trust. Building trustworthy AI systems is pivotal for maintaining public confidence and ensuring the long-term sustainability of Hong Kong’s banking system. Institutions that advance further in digital transformation may gain a competitive edge, whereas others may need to first close infrastructure gaps to scale AI adoption.

Local press reports Luxury home transactions in Hong Kong are expected to increase, as many celebrities including top executives of a local bank and prominent figures are seizing the opportunity to invest in properties, taking advantage of a 30 percent decline in prices. The chairman of Hongkong and Shanghai Banking Corporation, Peter Wong Tung-shun's family, bought a flat at Hong Kong Parkview, Parkview Heights, for HK$125 million. The saleable area is a total of 4,616 square feet, with a price per square foot of approximately HK$27,080. Wong and related parties have spent HK$231 million this year to acquire four units at Hong Kong Parkview, with the transactions led by Wong's son, Wong Ka-chun. In addition to business elites, many wealthy celebrities are also actively entering the market.

Wednesday closings in EUROPE & US
DAX 0.49%, CAC 0.99%, FTSE -0.12%
European markets opened higher; FTSE drifted lower and trading around flat for most of the morning and sold off around lunch and then worked slightly higher through the afternoon. UK bond prices, like the FTSE 100, tumbled sharply after PM Starmer failed to fully back Finance Minister Rachel Reeves in the wake of a government U-turn over welfare reforms. But many feel if the Chancellor cannot discipline the more left-wing Labour MPs, the gilt market will have to do it. Because without discipline government debt interest costs will rise reducing the money available for public services, that would be a worse outcome.” Later the PM endorsed her saying she would be chancellor for many years to come. But coming from a PM with a reputation for U-turns that might not mean much!

DAX traded sideways just above flat in the morning sold down around lunchtime and worked better in the afternoon. CAC worked better through the morning eased slightly at lunchtime and then traded sideways for the rest of the afternoon.

Banks +VE after having the best first-half returns since 1997, according to FactSet

Euro and Sterling were weaker vs USD as investors reacted to Tuesday’s US economic data and Powell’s comments. Vestas & Orsted rallied in reaction to what the latest text of the U.S. One Big Beautiful Bill Act means for the renewables sector.

Spectris 4.1%, after it backed an improved £4.1 billion ($5.6 billion) takeover offer from private equity giant KKR. The board said it would recommend the £40 per share cash acquisition offer, which represents a 96.3% premium to the closing price of Spectris shares on June 6, the last date before the start of its offer period.

Investors still watching the ECB’s forum which ECB President Lagarde due give an address.

DOW -0.02%, NDX 0.94%, S&P 0.47%, Russel 2K 1.31%
US markets opened around flat; the DOW trading around flat all day. NDX rallied and then traded slightly higher for the rest of the day. S&P worked higher throughout the day, hitting a new high. Russell also worked better through the day seeing continues interest from the rotation seen on July 1.

Sentiment initially weak as the ADP report that showed private payroll dropped by 33,000 jobs vs +100k F/cast; the first drop in 2 years and raising concerns about the state of the US economy, especially small businesses as it showed that businesses with less than 20 employees saw a net loss of 29,000 jobs. Businesses with more than 500 employees saw a 30,000 increase in payrolls. It also raised expectations of a Fed rate cut sooner than later.

Sentiment improved as Trump announced a tariff deal with Vietnam; tariffs set at 20%; which prompted Nike 4.1% as it makes about 44% of its shares in the country. Other stocks linked to Vietnam also rallied: Columbia Sportswear Company – 48% exposure to Vietnam
Crocs – 44%
Deckers Outdoor – 64%
Lululemon Athletica – 40%
On – 88%
Skechers – 40%
Under Armour – 30%
V.F. Corporation – 26%

Tesla 5% having rallied pre market as Q2 deliveries were better than expected at 384k -14% YoY and slightly below the f/cast.

Centene -40% its weakest day ever after the health care company pulled its full-year guidance.

Robinhood 6.12% on speculation that the brokerage stock could soon join the S&P 500; replacing Hewlett Packard Enterprise.

Stablecoins and tokenisation stocks rallying after the latest crypto trend following Ethereum’s value proposition and weaker revenue since its last big technical upgrade and increasing competition from Solana. Market volatility driven by geopolitical uncertainty this year has not helped. Ether is down 23% this year.

Banks JPMorgan Chase 0.55%, Citigroup 0.57% Wells Fargo 1.07%, Amex 0.95%
Ecommerce Meta -0.79%, Apple 2.22%, Amazon -0.24%, Netflix -0.68%, Disney -0.41%, Zoom Comms 0.03%, Alphabet 1.61% and Microsoft -0.2%,
Tech NXP Semi 4.49%, Nvidia 2.58%, Micron 0.7%, AMD 1.77%, Skyworks 1.32%
Industrial/Discretionary Boeing 1.07%, Caterpillar 1.92%, Simon Property 0.96%, Kohl’s 0.44%, Gap 0.45%, United Airlines 1.2%, Carnival 3.53%, Wynn Resorts 2.67%,
Auto Ford 3.7%, GM 1.25%, Tesla 4.97%
Energy Chevron 1.66%, Exxon Mobil 1.66%,
Consumer Staples Campbell Soup 0.79% General Mills 1.2%, JM Smucker 1.83%

DAILY DATA
USD firmer, Bitcoin 3.58% at 109,359.85, VIX -1.13% at 16.64
US T10 up 3 bpts to 4.283% and T2 up 1 bpt at 3.787% and the T30 up more than 3 bpts at 4.809%
OIL Brent 2.98%, WTI 3.06% as Iran suspends co-operation with the UN nuclear watchdog.
Spot Gold 0.3% rallied after the weak ADP data, Silver 1.2%, Copper -0.03% Platinum 4.6%, Palladium 5.2%.