Asian Macro Initial Thoughts: Data light in Asia but US CPI shows tariffs starting to be seen

NZX opened higher testing 12,705 initially and then trading sideways in a tight range 12,698/707.

Overview.
A data light day but investors likely to remain cautious as investors continue to try and work out the impact of tariffs as US inflation data suggested that they are starting to have an impact in the US. Also interesting to see Jamie Dimon warn about Fed independence as Trump continues to call for rate cuts and for the Fed Chairman to resign.

China’s economy slowed less than expected in the second quarter in a show of resilience against U.S. tariffs, though analysts warn that weak demand in China and rising global trade risks will ramp up pressure on Beijing to roll out more stimulus. The question remains about what Beijing can practically actually do to address the issues like consumer confidence, the housing market, and discounting in the auto and solar markets.

The EU has finalized a second list of countermeasures to target US goods worth 72 billion euros (US$84.12 billion), including Boeing Co aircraft, automobiles and bourbon if it decides to retaliate as transatlantic trade tensions intensify. The additional duties would also be slapped on machinery products, chemicals and plastics, medical devices, electrical equipment, wines and other agricultural goods, according to a 206-page list prepared by the European Commission and seen by Bloomberg News. The list, initially hitting US goods totaling 95 billion euros, was cut down after consultations with companies and member states. Countries must give their approval before the list’s adoption.

Russia, Iran and China are behind a growing number of life-threatening operations in Britain including attacks and kidnappings, often deploying criminals and sometimes children as proxies, two senior British police officers said on Tuesday. The British authorities in recent years have repeatedly voiced concern at what they said was malign activity by the three states in Britain, ranging from traditional espionage and actions to undermine the state, to sabotage and assassinations.

China is increasing its diplomatic reach as President Donald Trump's administration pares back America's international presence, Democrats from the U.S. Senate Foreign Relations Committee said in a report released on Monday. The report, the result of months of staff travel and research, was released as the Trump administration makes deep cuts to the State Department, including beginning on Friday to fire more than 1,350 U.S.-based employees, part of a total reduction of nearly 3,000 people for the U.S.-based workforce.

Earnings this week include
Wednesday Morgan Stanley Q2, Bank of America Q2, Goldman Sachs Q2, Johnson & Johnson Q2, Morgan Stanley Q2, ASML Q2, Richemont Q1, Finnair H1
Thursday TSMC Q2, Volvo Cars Q2, PepsiCo Q2, Marsh McLennan Q2, easyJet Q3, Novartis Q2, GE Aerospace Q2, US Bancorp Q2, Frasers Group FY, Dunelm Q4 and FY
Friday Telenor Q2, Burberry Q1, Danske Bank Q2, Charles Schwab Q2

Housekeeping
On Monday I was on RTHK’s Money Talk with host Chloe Feng and Nigel Foo, Head of Asian Fixed Income, First Sentier. Looking at the Global markets and tariffs, China economy and whether this months Politburo meeting will announce more stimulus; in realty they actually do not have much scope at the present; confidence, the property market and discounted sales remain key issues.

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

This Thursday afternoon I will be on RTHK’s The Close, with Nitan Dialis. 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

You can find the whole article here

Market opening indications and data

New Zealand - No Data Due
NZX opened higher testing 12,705 initially and then trading sideways in a tight range 12,698/707.

Australia - No Data Due
ASX to open lower, futures indicate -66pts -0.77% at 8,545, Miners and Energy names weak overnight although Tech likely to see interest.

Japan
Market to open lower
Nikkei 225 Futures indicate -78pts -0.2% at 39,600
Chicago Futures -25pts -0.06% at 39,640
Yen closed 148.87 in US. Trading 148.91 in early trades
Data Out
Tankan Index Jul 7 vs 6 Jun (F/cast was 7)

S Korea
Market to open higher with support from Tech and news of renewed sales to China by Nvidia
Stocks closed higher on Tuesday, trade volume was moderate at 415.06 million shares worth 11.94 trillion won ($8.6 billion). Decliners outnumbered gainers 510 to 364. Foreigners net bought while institutions and individuals net sold.
The local currency was quoted at 1,380.20 won against the greenback at 3:30 pm Tuesday, up 1 won from the previous session.
Data Out
Export Prices Jun -4.5% YoY vs -2.4% May (F/cast was -5%)
Import Prices Jun -6.2% YoY vs -5% May (F/cast was -7.8%)
Unemployment Rate Jun 2.6% vs 2.7% May (F/cast was 2.8%)

Taiwan - No Data Due
Market to open higher with Tech in focus.

China - No Data Due
Market to open higher after the Golden Dragon China Index closed up 207pts 2.76% at 7,697 after better than expected data over the past two days
FTSE A50 China Futures -4pts -0.03% at 13,749
MSCI A50 China Futures -3pts -0.14% at 2,158.8
Spot USD/CNY opening -0.0009pts, -0.01% at 7.1836
Spot USD/CNY faded 41 bps to close at 7.1734 today (15th). As of 4:48 pm, USD/CNY in the night session dropped 65 bps. USD/CNH lost 33 bps to 7.1748, 14 bps below USD/CNY.
Four-day International Supply Chain Expo in Beijing begins. Nvidia will take part for the first time, according to state media reports

Hong Kong - No Data Due
Market to open lower, ADR’s closed flat up 7pts 0.03% at 24,597 with only SHKP, HK EX, AIA, Tencent, Baba and Meituan in the green
Futures indicate -60 pts -0.2% at 24,530
Turnover on Tuesday 288.4B vs HK$210.36B Monday. Short selling 16.1% vs 18.5% Monday
HKMA continues to defend the HKD/USD peg.

Macau - No Data Due
Singapore - No Data Due
Malaysia - No Data Due

Indonesia - Data Due PM
Loan Growth Jun YoY vs 8.43% May (F/cast is 8.5%)
Interest Rate Decision 25 bpt cut expected from 5.5% current.
Deposit Facility Rate Jul vs 4.75% Jun (F/cast is 4.5%)
Lending Facility Rate Jul vs 6.25% Jun (F/cast is 6%)
Trump announces 19% tariffs of goods from Indonesia; but details still awaited

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
India - No Data Due

Europe
Eurozone Balance of Trade
Germany 30-Year Bund Auction
France No Data Due
United Kingdom Inflation Rate, Core Inflation Rate, Retail Price Index, Treasury Gilt 2034 Auction

United States
Futures Dow -54pts -0.1%, S&P -0.23% and NDX -0.24%
After Market
API Crude Oil Stock Change 11 July 19.1M vs 7.1M prior (Consensus -2M)
Data Due MBA Data (30 yr Mortgage Rate, Applications, Market Index, Refinance Index, Purchase Index), PPI, Core PPI, PPI Ex Food,Energy & Trade, Feds Hammack speaks, Capacity Utilisation, Industrial & Manufacturing Production, Feds Barr speaks, EIA Oil Stocks Change, 17-Week Bill Auction, Fed Beige Book, Feds Williams speaks

HEADLINES & NEWS

AUSTRALIA & NEW ZEALAND
Rio Tinto has appointed Simon Trott, its Australian head of iron ore to take over as chief executive from Jakob Stausholm.

Major investors have expressed concerns about the drinking habits and management style of National Australia Bank’s chief executive, Andrew Irvine.

‘Bigger than Amazon’: Trump’s crypto genius is about to hit Aussie bitcoin believers. Donald Trump is busy making the US the crypto capital of the world. Where does that leave Australia?

‘Snowball effect’: RBA’s card surcharge ban risks higher prices and job cuts. Businesses would be banned from applying surcharges to all credit and debit card transactions from July next year under a Reserve Bank proposal.

Childcare provider says it didn’t think abuse scandal news would hurt share price. G8 Education has defended its communications to investors after child sex abuse charges against a former employee were made public, which shredded 26 per cent off its market value.

JAPAN
Japan's ruling coalition will likely lose its majority in the upper house election on July 20, media polls showed on Tuesday, heightening the risk of political instability at a time the country struggles to strike a trade deal with the U.S. Japanese bond yields soared as investors braced for the possible loss of fiscal hawk Prime Minister Shigeru Ishiba, which could strain the country's already frail finances. Ishiba's ruling Liberal Democratic Party (LDP) and its coalition partner Komeito will likely struggle to retain the 50 seats needed to defend its majority in the upper house of parliament, the Asahi newspaper said based on voter polls and nationwide reporting by its journalists.
Japan's Jiji news agency also reported on Tuesday that the ruling coalition was struggling in the election campaign, and could lose its majority in the upper house. Ishiba's administration has seen approval ratings slide as the rising cost of living, including the soaring price of Japan's staple rice, hit households. The political uncertainty comes at a critical time for Japan, which must clinch a trade deal with Washington by the new August 1 deadline to avoid being slapped with 25% tariffs. Ishiba is arranging to meet U.S. Treasury Secretary Scott Bessent on Friday during his visit to Japan to attend the U.S. national day at the World Expo in Osaka, the Yomiuri newspaper reported. Japan's top government spokesperson said on Tuesday that Bessent's schedule was still being arranged. As darkening economic prospects and rising inflation hits households, Ishiba has pledged to deliver cash payouts to cushion the blow to households from rising living costs. But Ishiba has shunned opposition calls to cut Japan's sales tax rate. An election defeat may heighten the chance of a cut, some analysts say. It would also complicate the Bank of Japan's efforts to wean the economy off a decade-long, massive stimulus.

Investors in Japanese government bonds are bracing for a potential power shift in upper house elections this weekend that could strain the country's already frail finances, with long-dated yields soaring to all-time highs as the vote nears. Prime Minister Shigeru Ishiba's sliding popularity suggests even his modest goal of retaining a majority is out of reach, as a new opinion poll from national broadcaster NHK gave the ruling Liberal Democratic Party the lowest score since its return to power in 2012. Defeat in Sunday's vote could bring anything from a shift in the makeup of Ishiba's coalition to his resignation, though even the least disruptive scenario is still expected to see more stimulus-minded political viewpoints gain sway. All three leading opposition parties back some form of consumption tax cuts, with the rapidly emerging populist, right-wing Sanseito proposing a phase-out of VAT altogether. And reflationist Sanae Takaichi is one of Ishiba's main rivals to lead the LDP. The 30-year JGB yield jumped on Tuesday to a record 3.20%, while the 20-year yield soared to its highest since November 1999 at 2.65% and the 10-year yield scaled its highest since October 2008 at 1.595%.

Tesla plans to double the number of its physical stores in Japan by the end of next year, Nikkei reported. The number of stores is expected to increase from 23 to 30 by the end of this year and further to 50 by the end of next year. BYD COMPANY (01211.HK) also plans to open 100 stores in Japan by the end of this year, the report added.

Nissan Motor Co (7201.T) will stop producing vehicles at its Oppama plant in Japan by March 2028 and transfer operations to its factory in the southern prefecture of Fukuoka as part of a global restructuring plan to cut capacity, it said on Tuesday. Japan's third-largest automaker will also cease production at Nissan Shatai's (7222.T) Shonan factory that builds light commercial vehicles by March 2027, CEO Ivan Espinosa said. "It was a difficult decision for both myself and the company," Espinosa told reporters at the automaker's headquarters in Yokohama. "However, we believe it is necessary for Nissan to overcome its current challenging situation.” -VE

Japan on Tuesday set up an administrative body aimed at easing citizens' concerns over the rapid rise in the number of foreigners in recent years, as policies concerning non-Japanese residents emerge as a key issue in Sunday's national election. The body would serve as a cross-agency "control tower" to respond to issues such as crime and over-tourism involving foreigners, the government said. Japan has long sought to maintain a homogeneous population through strict immigration laws, but has gradually eased them to supplement its shrinking and ageing labour force. The number of foreign nationals hit a record of about 3.8 million last year, although that is still just 3% of the total population. The formation of the administration body comes after a group of lawmakers in Prime Minister Shigeru Ishiba's Liberal Democratic Party in June proposed measures to realise a "society of orderly and harmonious coexistence with foreign nationals”. Those measures included adopting stricter requirements for foreigners switching to a Japanese driver's license and for buying real estate properties. "Crimes and disorderly conduct by some foreigners, as well as the inappropriate use of various administrative systems, have created a situation in which the public feels uneasy and cheated," Ishiba said at the kick-off ceremony. Concerns over the influx of foreigners, both temporary and permanent, have resonated with voters, with opinion polls showing a rapid surge in the popularity of tiny populist party Sanseito, which advocates a "Japanese First" agenda. Public opinion polls show the LDP and its junior coalition partner Komeito are in jeopardy of losing their majority in the upper house election on July 20.

SOUTH KOREA
South Korea's defence ministry summoned Japan's defence attache on Tuesday to protest over an annual white paper published by Tokyo, which made a territorial claim over disputed islands located in the East Sea. Both sides claim longstanding territorial rights over the islands, which are known as Dokdo in Korean and Takeshima in Japanese, and lie roughly halfway between the two countries.

The Lee Jae Myung government's sweeping organizational reforms across Korea’s financial and economic agencies are extending into lengthy and complex negotiations, testing the administration's ability to balance and delineate agency roles. While discussions continue on reallocating responsibilities among key institutions including the Ministry of Economy and Finance, the Financial Services Commission and the Financial Supervisory Service, progress has been sluggish in filling top leadership positions. Nominations for the FSC chair and FSS governor remain pending, despite Cabinet appointments having been made across 19 ministries on Friday. Widespread speculation suggests these delays are driven by deeper disagreements over the scope and structure of the proposed reforms. On Sunday, the State Affairs Planning Committee said it had submitted an initial draft of the reform plan to the president’s office on July 3. Key proposals include separating the Ministry of Economy and Finance’s budget management from the regulation of financial policies, alongside the establishment of a new Financial Supervisory Committee dedicated solely to oversight, which aims to clearly distinguish policymaking from supervisory functions, deemed essential for effective oversight and a stable financial system. The plan also proposes splitting off the FSC’s financial consumer protection department into an independent agency to focus exclusively on consumer safeguards. However, the FSS strongly opposes this move. Last week, senior FSS officials met with lawmakers, asserting that while boosting consumer protection is vital, the organizational structure should remain within the FSS to ensure coordination and accountability. The FSS union also warned that splitting the consumer protection division could lead to fragmented oversight, making it harder to respond swiftly to issues like misselling or systemic crises and risking blurred responsibility during emergencies. Amid these ongoing debates, Bank of Korea Gov. Rhee Chang-yong added a new twist by publicly emphasizing the need to strengthen the central bank’s role in macrofinancial policy.

Apple has decided to adopt screens produced by Samsung Display instead of its own screens for its foldable iPhone set for mass production in 2H26, TF International Securities analyst Ming-Chi Kuo said. This implies that Fine M-Tec, Samsung Display's supplier, will benefit. Fine M-Tec, according to Kuo, will expand production for Apple in Vietnam and is expected to start shipping the metal plates used in the foldable iPhone screens in 1Q26 with a unit price of around USD30-35. It is estimated that shipments next year will be around 13-15 million units.

Google will launch a new standalone YouTube subscription in Korea without YouTube Music — a move aimed at addressing antitrust concerns over alleged unfair bundling practices, according to the country’s competition regulator on Tuesday. The new product, dubbed YouTube Premium Lite, will provide ad-free video streaming without the music streaming service at nearly half the price of the current YouTube Premium plan. Monthly fees are set at 8,500 won ($6.15) for Android users and 10,900 won for Apple customers. The pricing disparity reflects fees imposed by Apple’s in-app payment system, the Fair Trade Commission said.

Ultium Cells, a joint venture between LG Energy Solution and General Motors, has decided to upgrade its battery cell manufacturing plant in Spring Hill, Tennessee, to produce low-cost lithium iron phosphate, or LFP, battery cells as it aims to expand its business portfolio. According to the announcement on Tuesday, the conversion of battery cell lines at the Tennessee site will begin later this year. Commercial production is expected to begin by late 2027. The plant has been rolling out lithium-ion batteries using cathode materials, namely nickel, cobalt and manganese, to produce LFP cells. “The upgrade reflects the continued strength of our partnership with General Motors and our shared commitment to advancing EV battery innovation,” said Suh Won-joon Suh, executive vice president and head of the Advanced Automotive Battery division at LG Energy Solution.

LG AI Research, the artificial intelligence arm of LG Group, on Tuesday unveiled Exaone 4.0, Korea’s first "hybrid" AI model that combines the language fluency of large language models with the advanced problem-solving abilities of reasoning AI. This breakthrough represents a major leap in Korea’s ambition to lead in next-generation AI, as the model can both understand human language and logically reason through complex tasks. “We will continue to advance research and development so that Exaone can become Korea’s leading frontier AI model and prove its competitiveness in the global market,” said LG AI Research’s Exaone lab leader Lee Jin-sik. Globally, only a few companies have announced similar hybrid AI architectures, including US-based Anthropic with its Claude model and China’s Alibaba with Qwen. OpenAI is reportedly working on GPT-5, which is expected to adopt a hybrid structure as well.

Container shipping costs from South Korea to the United States sharply went up last month, as trade volume to the country increased despite Washington's sweeping tariff policies, the customs agency said Tuesday. The average shipping cost for a 40-foot container from South Korea to the US west coast increased 16.6 percent from a month earlier to 6.09 million won ($4,395) in June, according to data from the Korea Customs Service. Shipping rates to the US east coast climbed 23.3 percent to 6.77 million won during the same period. "The freight rates escalated largely due to increased shipments to the US, but the cost is constantly changing due to uncertainties sparked by Washington's tariff measures," an official from the agency said. In May, shipping costs to both the US west and east coasts dropped due to a decrease in trade volume to the region. Meanwhile, average shipping costs from South Korea to the European Union fell 0.8 percent on-month in June to 3.79 million won, marking the sixth consecutive month of decline. In contrast, shipping costs to China gained 2.7 percent to 716,000 won, and those to Japan added 4.6 percent to 656,000 won. Shipping rates to Vietnam also expanded 8 percent to 1.74 million won.

TAIWAN
Paraguay is preparing to welcome President William Lai next month, Paraguayan President Santiago Pena said on Monday. Lai’s trip would likely involve transiting in the US. Paraguay is one of only 12 countries to maintain formal diplomatic ties with Taiwan, and the only one in South America. Taiwanese media, citing an unnamed source, yesterday reported that Lai plans to make stopovers in New York and Dallas, Texas, during state visits next month to Taiwan’s allies in Central and South America, including Paraguay, Guatemala and Belize.

The number of retail investors in the local stock market increased in the second quarter of this year compared with the previous quarter, as Taiwanese stocks rebounded in a roller-coaster quarter. Amid US President Donald Trump’s announcement of new tariffs in April and the New Taiwan dollar’s sharp appreciation against the US dollar the following month, the TAIEX dropped to as low as 17,306 points, before quickly rebounding to more than 20,000 points in a couple of sessions. Overall, the TAIEX surged 1,560.12 points, or 7.53 percent, in the April-to-June quarter after the activation of the NT$500 billion (US$17.06 billion) National Stabilization Fund (國安基金) and on the back of several listed firms’ strong corporate earnings, Taiwan Stock Exchange (TWSE) data showed.

The Philippines is working behind the scenes to enhance its defensive cooperation with Taiwan, the Washington Post said in a report published on Monday. “It would be hiding from the obvious to say that Taiwan’s security will not affect us,” Philippine Secretary of National Defense Gilbert Teodoro Jr told the paper in an interview on Thursday last week. Although there has been no formal change to the Philippines’ diplomatic stance on recognizing Taiwan, Manila is increasingly concerned about Chinese encroachment in the South China Sea, the report said. The number of Chinese vessels in the seas around the Philippines, as well as Chinese cybersecurity attacks and espionage, have increased, the report said, citing information from the Philippine National Security Council. The Philippines is “entitled” to negotiate its relationship with Taiwan, given that prior attempts to ease tensions with China have so far found no success, the report quoted Teodoro as saying. Speaking on condition of anonymity, officials told the newspaper that security cooperation with Taiwan is “further along” than publicly disclosed, following a new policy by Philippine President Ferdinand Marcos Jr that reduced restrictions on exchanges between the two countries. Filipino academics with ties to the nation’s defense establishment earlier this year participated in forums with high-ranking Taiwanese generals to better understand security thinking in the country, the paper said. Taiwan’s Coast Guard Administration and the Philippine Coast Guard recently carried out joint patrols of the Bashi Channel, it added.

Asustek Computer Inc’s PC shipments increased 8.6 percent year-on-year to 4.49 million units in the second quarter, driven by US tariff-related inventory buildup and desktop system upgrades, market researcher Gartner Inc said in a report on Monday. The company secured a 7.1 percent share of the global market in the second quarter, ranking fifth place ahead of Acer Inc, but trailing behind Lenovo Group Ltd, HP Inc, Dell Technologies Inc and Apple Inc, Gartner said. Among the top five, only Dell saw a decline in shipments in the second quarter, down 3 percent year-on-year to 9.83 units, the researcher said. Overall, global PC shipments rose 4.43 percent to 63.23 million units in the second quarter, from 60.54 million units a year earlier, it said. The figure also grew 7.26 percent from the previous quarter. The growth in global PC shipments in the second quarter was mostly driven by enterprise demand due to the upcoming end of service for Microsoft Corp’s Windows 10 operating system and a post-COVID-19 upgrade cycle, Gartner said.

Yageo Corp the world’s No. 3 multilayer ceramic capacitor (MLCC) supplier, yesterday again extended the deadline of its tender offer for Japan’s Shibaura Electronics Co to Aug. 1 as it has yet to obtain approval from Japanese authorities. The fifth-time deadline extension came as a review of the deal has not been completed under Japan’s Foreign Exchange and Foreign Trade Act, Yageo said in a statement. The company said it hoped to obtain the necessary approval for the potentially ￥94.55 billion (US$639.2 million) deal before the expiration of the new deadline. Yageo expects to wrap up the deal in the third quarter as planned previously, the company said in a filing with the Taiwan Stock Exchange.

CHINA
China’s economy slowed less than expected in the second quarter in a show of resilience against U.S. tariffs, though analysts warn that weak demand at home and rising global trade risks will ramp up pressure on Beijing to roll out more stimulus. The world's No. 2 economy has so far avoided a sharp slowdown in part due to policy support and as factories took advantage of a U.S.-China trade truce to front-load shipments, but investors are bracing for a weaker second half as exports lose momentum, prices continue to fall, and consumer confidence remains low. Policymakers face a daunting task in achieving the annual growth target of around 5% - a goal many analysts view as ambitious given entrenched deflation and weak demand at home. Data on Tuesday showed China's gross domestic product (GDP) grew 5.2% in the April-June quarter from a year earlier, slowing from 5.4% in the first quarter, but just ahead of analysts' expectations in a Reuters poll for a rise of 5.1%.

"Despite a strong H1, the outlook is set to sour in H2 as export frontloading fades and the impact of U.S. tariffs becomes more visible," Wei Yao, an economist at Societe Generale, said. "Renewed weakness in house prices and the fading impact of subsidies also cast doubt over the sustainability of the consumption recovery.” Indeed, the solid headline GDP numbers held little sway for most households including 30-year-old doctor Mallory Jiang, in the southern tech hub Shenzhen, who says she and her husband both had pay cuts this year. "Both our incomes as doctors have decreased, and we still don't dare buy an apartment. We are cutting back on expenses: commuting by public transport, eating at the hospital cafeteria or cooking at home. My life pressure is still actually quite high.” On a quarterly basis, GDP grew 1.1% in April-June, the National Bureau of Statistics data showed, compared with a forecast 0.9% increase and a 1.2% gain in the previous quarter. Investors are closely watching for signs of fresh stimulus at the upcoming Politburo meeting due in late July, which is likely to shape economic policy for the remainder of the year.

Nvidia’s planned resumption of sales of its H20 AI chips to China is part of U.S. negotiations on rare earths, Commerce Secretary Howard Lutnick said on Tuesday, and comes days after its CEO met President Trump. "We put that in the trade deal with the magnets," Lutnick told Reuters, referring to an agreement Trump made to restart rare earth shipments to U.S. manufacturers. He did not provide additional detail. The planned resumption is a reversal of an export restriction imposed in April that is designed to keep the most advanced AI chips out of Chinese hands over national security concerns, an issue that has found rare bipartisan support. It drew swift questions and criticism from U.S. legislators on Tuesday. The decision "would not only hand our foreign adversaries our most advanced technologies, but is also dangerously inconsistent with this Administration's previously-stated position on export controls for China," Democratic Representative Raja Krishnamoorthi, ranking member of the House of Representatives Select Committee on China, said in a statement. Republican John Moolenaar, chair of that committee, said in a statement he would seek "clarification" from the Commerce Department. "The H20 is a powerful chip that, according to our bipartisan investigation, played a significant role in the rise of PRC AI companies like DeepSeek," Moolenaar said, referring to a Chinese startup that claims to have built AI models at a fraction of the cost paid by U.S. firms such as OpenAI. "It is crucial that the U.S. maintain its lead and keep advanced AI out of the hands of the CCP."

President Trump on Tuesday lauded a new trade deal signed with Indonesia and said the United States would be fighting China "in a very friendly fashion.” Trump told an energy summit at Carnegie Mellon University that other trade deals could be reached, including potentially with India.

The Central Urban Work Conference was held in Beijing from July 14 to 15, at which Chinese President Xi Jinping showed up and delivered a keynote speech, according to state media reports. The meeting deployed seven key tasks for urban work:
1) Focus on optimizing the modern urban system. The Chinese government should aim to improve the comprehensive carrying capacity of cities for population and socioeconomic development; develop modern urban clusters and metropolitan areas in a networked manner; continue to promote the urbanization of agricultural migrants; and promote coordinated development of large, medium, and small cities and towns, as well as urban-rural integration.
2) Focus on building vibrant innovative cities. The Chinese government should carefully cultivate an innovation ecosystem, and continuously achieve breakthroughs in developing new quality productivity; rely on reform and opening up to enhance urban dynamics; conduct high-quality urban renewal, and fully leverage the city's role as a hub in the domestic and international dual circulation.
3) Focus on building comfortable and convenient livable cities. The Chinese government should adhere to integrated planning of population, industry, urban, and transportation, and optimize urban spatial structure; accelerate the construction of a new real estate development model, and steadily advance the renovation of urban villages and dilapidated housing; vigorously develop life service industries, improve public service levels, and firmly uphold the bottom line of people's livelihood.
4) Focus on building green and low-carbon beautiful cities. The Chinese government should consolidate the achievements of ecological environment governance; take more effective measures to address issues such as urban air governance, protection of drinking water sources, and new pollutant governance; promote pollution reduction and carbon reduction; expand green synergy; and enhance urban biodiversity.
5) Focus on building safe and reliable resilient cities. The Chinese government should promote the construction of urban infrastructure lifeline safety projects; accelerate the renovation and upgrading of old pipelines; strictly limit super high-rise buildings; comprehensively improve housing safety assurance levels; strengthen urban natural disaster prevention; enhance overall social security prevention and control; and effectively maintain urban public safety.
6) Focus on building civilized cities that value virtue and kindness. The Chinese government should improve the system for the protection and inheritance of historical culture; improve the urban landscape management system; protect the unique historical context, human geography, and natural landscapes of cities; strengthen the construction of urban cultural soft power; and improve the civic quality of civilization.

HONG KONG

Economy
The Hong Kong government laid out proposals on Tuesday to regulate ride-hailing platforms, such as Uber following years of talks and complaints from the city's licensed taxi drivers that they face unfair competition. Uber in 2014 became the first ride-hailing platform in Hong Kong and has operated without formal regulation. The city's taxi industry, which has been struggling with declining income, has said the lack of regulation gives ride-hailing services an unfair advantage. In a paper submitted to the legislature, the Transport and Logistics Bureau said all platforms providing ride-hailing services must obtain a licence and comply with specific conditions. Anyone who provides ride-hailing platform services without a valid licence may be subject to imprisonment and fines. In a statement to Reuters, a spokesperson for Uber HK said the regulation was an "important milestone”. "We are encouraged to see safety and service standards - such as mandatory insurance, driver examinations, and regular vehicle inspections - placed at the centre of the proposed regime," the spokesperson said. But the statement also said Uber was concerned about a proposed cap on the number of ride-sharing vehicles. "Artificial limits risk increasing wait times, raising prices for riders, and restricting earning opportunities for drivers," it said, adding Uber looked forward to continued talks with the government and other stakeholders.

According to a survey carried out by Uber of more than 4,800 Hong Kong drivers, nearly 80% fear that strict quotas and high licensing fees could threaten their livelihoods. The city's leader, John Lee, told a news conference on Tuesday there was a consensus in society that ride-hailing services must be regulated to protect the safety of passengers. "I agree that the issue is complex, but I think the issue should not be delayed any further and the government must come up with a solution," Lee said.

Buybacks - None reported

HSI Short Selling Tuesday 16.1% vs 18.5% Monday
Top shorts BYD (1211) 50%, Zhong Sheng (881) 49%, MTRC (66) 48%, New Oriental (9901) 47%, CK Asset (1113) 44%, Hengan (1044) 25%, Bud APAC (1876) 37%, Henderson Land (12) 35%, China Shenhua (1088) 35%, Haidilao (6862) 34%, Nongfu Spring (9633) 34%, Sinopharm (1099) 33%, Chow Tai Fook (1929) 32%, Hansoh Pharma (3692) 31%, Shenzhou (2313) 29%, Trip Com (9961) 27%, Sino Biopharm (1177) 27%, CSPC Pharma (1093) 26%, Zijin Mining (2899) 26%, Xinyi Solar (968) 26%, NTES-S (9999) 26%, Xinyi Glass (868) 25%, SHKP (16) 25%.

PROFIT ALERT
POP MART (09992.HK) issued a positive profit alert. It was expected that the Group’s revenue for the six months ended 30 June 2025 (the Period) may increase by no less than 200% YoY, and that the Group’s profit for the Period (excluding unaccounted profit or loss from changes in the fair value of financial instruments) may increase by no less than 350% YoY. The change in the Group’s operating results is primarily attributable to the increased global recognition of POP MART brand and its IPs, and diversified product categories boosting the Group’s revenue growth, among which revenue from all regional markets of the Group grew rapidly and continuously; the growing portion of overseas revenue and positive impacts on gross profit and profit from such change of revenue structure, as well as a substantial increase in profit from economies of scale; and constant product costs optimization and strengthened expense control, leading to improved profitability.

MMG (01208.HK) closed up 5% after it issued a positive profit alert at noon Tuesday (15th) expecting a spike of around 15.2 times in 1H25 earnings, driving its stock price up by over 7% to a peak of HKD3.87 at one point after midday. It last traded at HKD3.68, up 1.94%, with a volume. of 82.826 million shares, involving HKD305 million. mmgThe company issued a positive profit alert at noon, in which it estimated that the net profit attributable to equity holders after tax for the half-year ended June 30, 2025, would be around USD340 million, compared to a net profit attributable to equity holders after tax of USD21 million in the same period last year, indicating an increase of about 15.2 times.

WATCH
CHINA RES LAND (01109.HK) announced that in June 2025, its gross contracted sales reached around RMB23.45 billion with contracted GFA of around 897,000 square meters, down 26.7% and 27.1% YoY, respectively. During the period, the group's recurring revenue was around RMB4.16 billion, roughly flat YoY. Among which, the rental income from investment property business amounted to around RMB2.59 billion, up 8.6% YoY.

ANTA SPORTS (02020.HK) announced its retail performance for 2Q25. Retail sales (in terms of retail value) of Anta branded products recorded low-single digit positive growth YoY; retail sales of FILA branded products recorded mid-single digit positive growth YoY; and retail sales of all other branded products (including DESCENTE and KOLON SPORT, excluding brands newly joined to the Group after 1 April 2025) recorded 50-55% positive growth YoY. For 1H25, retail sales of Anta branded products recorded mid-single digit positive growth as compared to the same period in 2024; retail sales of FILA branded products recorded high-single digit positive growth as compared to the same period in 2024; and retail sales of all other branded products (excluding brands newly joined to the Group after 1 April 2025) recorded 60-65% positive growth as compared to the same period in 2024. Retail sales refer to the revenue (inclusive of value-added tax, if any) derived from sales in brick-and-mortar stores (offline channel) and on e-commerce platforms (online channel), part of which being owned and operated by the Group and the rest being owned and operated by the Group's distributors, franchisees and/or the distributors' franchisees, according to ANTA SPORTS. Accordingly, retail sales do not represent the Group's total revenue, and the Group considers the same to be a business operational indicator of the various brands of the Group.

The Catering Association of Honghuagang District in Zunyi, Guizhou Province, has issued a public letter regarding the ongoing delivery platform wars. The letter pointed to the extreme subsidy tactics of MEITUAN-W (03690.HK) and BABA-W (09988.HK)s Taobao Instant Commerce (Ele.me), which has plunged many local restaurants into a vicious cycle where no participation means no traffic, but participation means price cuts and incurring losses. It highlighted that the unhealthy pricing below cost triggered by extreme subsidies campaigns in the battle over delivery market share has led to market chaos and a serious imbalance in the industry ecosystem. Three proposals were put forward by the letter: stop irrational subsidies and return to value-based competition; protect the legitimate rights and interests of merchants; and work together to build a sustainable development ecosystem.

STANCHART (02888.HK) launched bitcoin and ether spot trading for institutional clients through its UK branch to meet market demand for crypto assets, making it the first global systemically important bank to offer secure and regulated bitcoin and ether deliverable spot trading. Institutional clients, including corporations, investors and asset managers, can now trade digital assets through the familiar foreign exchange interfaces, and the Group will soon offer non-deliverable forwards trading, STANCHART issued a statement saying.

Amid intense competition among Chinese e-commerce platforms, Jack Ma, founder of BABA-W (09988.HK (BABA.US) requested last weekend Taobao Instant Commerce to stabilize at 80 million orders, Chinese media reported. In addition, media reports are saying that Alibaba is planning to launch a promotional event named "Super Saturday" every Saturday over the next 100 days.

JD-SW (09618.HK) (JD.US) announced that JD Technology recently formed a strategic partnership with an educational robot brand, Whalesbot, at which the two parties will engage in deep cooperation in areas such as product technology, marketing and exploration of industrial models.

Tuesday closings in EUROPE & US
DAX -0.42%, CAC -0.54%, FTSE -0.66%
European markets opened around flat. Markets traded around flat for most of the day but dipped into the close. Cautious optimism that the European Union will negotiate a trade deal with the White House before the end of the month was outweighed by global growth concerns in afternoon deals, after data showed U.S. inflation rose to 2.7% from 2.4% in June.

Ericsson CEO Börje Ekholm took aim at regulation of artificial intelligence in Europe; ‘...Maybe the race on computer infrastructure and large language models has already happened, but the real value in the future will be created on the applications that run on top of the AI infrastructure. And I think here, the race is still on.” Tech shares rallied on that and the Nvidia news. But Ericsson was lower after Q2 earnings, but sales were weaker than expected hurt by currency headwinds.

Renault announced the appointment of Duncan Minto as interim chief executive officer, after former CEO Luca de Meo abruptly resigned last month after around five years at the helm of the company.

FTSE 100 broke the 9,000 point barrier intraday

U.K. homebuilder Barratt Redrow -9.4% announced a £100 million ($134.5 million) share buyback program after reporting home completions that came in below the company’s guidance for the year to June 29. The company said in a trading update that it expects to deliver full-year adjusted profit before tax in line with market expectations.

B&M trended lower after it reported a 4.4%YoY rise in Q1 revenue which it attributed to warmer weather and Easter-related demand.

Rio Tinto announced it has appointed Simon Trott to succeed Jakob Stausholm as CEO.

Chancellor of the Exchequer Reeves’ upcoming Mansion House on Tuesday evening address will be a crucial moment to demonstrate progress and signal the next steps she will take to inject growth back into the U.K. economy.

U.K. challenger bank Starling is mulling a U.S. listing as it looks to expand into the country, the CFO said in a Financial Times interview published this morning. The move deals yet another blow to the London Stock Exchange, which saw its worst first half for IPO fundraising in decades this year, according to Dealogic.

DOW -0.98%, NDX 0.18%, S&P -0.4%, Russel 2K -1.99%
US markets opened mixed and trended lower through the day. NDX opened higher as Nvidia rallied on news that the US Govt granted them export approval for its H20 chip, with Chinese companies flocking to place orders, which NVIDIA needs to submit for U.S. government approval beforehand. Alphabet’s Google said it will invest $25 billion in data center and AI infrastructure over the next two years in the PJM electric grid region over the next two years. That’s the biggest electric grid in the U.S. Google will also spend $3 billion to modernize two hydropower plants in Pennsylvania to help meet the region’s increasing power demand. Amazon-backed Anthropic announced Claude tools for financial services. As part of the company’s so-called Financial Analysis Solution, Claude will get real-time access to financial information through data providers like PitchBook, Databricks and S&P Global. The tools will help financial professionals make investment decisions, analyze markets and conduct research, Anthropic said.

CPI increased 2.7% higher than expected with core inflation rate up but inline with forecasts but looking at the data there are signs that tariffs are starting to have an impact on appliances, toys and sports equipment. Making it more likely that the Fed will remain on hold. Housing market also showed signs of slowing as high interest rates are a drag on demand. Trump continues to call for the Fed to cut rates. Factory activity in the New York area surged in July to 5.5, posting its first positive reading since February as shipments. Within the index, new orders surged 16.2 points to positive level, while shipments soared 18.7 points to 11.5 and inventories climbed 14.7 points to 15.6. The prices paid index accelerated but the prices received index nudged lower while the employment index also improved, rising to 9.2, up 4.5 points from June.

In earnings Wells Fargo beat but a reduction in net interest income guidance sent shares lower. JPMorgan Chase edged lower even though the bank posted better-than-expected Q2 results driven by strong trading and investment banking revenue. Asset manager BlackRock trended lower as quarterly revenue was a miss, and despite CEO Larry Fink saying that he would buy his own stock. Citigroup beat Q2 estimates.

Bitcoin weaker as legislation failed to get passed in the House of Representatives.

First Solar 6.9 as Bloomberg reported that the U.S. Commerce Department has launched Section 232 investigations into imports of drones and polysilicon, which is used on solar panels. The move could be a precursor to tariffs, which may be imposed on goods under Section 232 if they are deemed a threat to national security.

Rare Earth miner MP Materials 20% off earlier high of 25% Tuesday on a $500 million deal to supply Apple with magnets that are manufactured at a plant in Texas. MP will provide Apple with rare earth magnets made from recycled materials at its Independence plant in Forth Worth. The input materials come from end-of-life magnets, the miner said.

Advertising tech company The Trade Desk 6.6% will become part of the S&P 500, effective before trading opens on Friday, July 18, according to S&P Dow Jones Indices. It will replace software company Ansys, which is on track to be acquired by Synopsys on or about Thursday.

Banks JPMorgan Chase -0.74%, Citigroup 3.68% Wells Fargo -5.48%, Amex -3.2%
Ecommerce Meta -1.46%, Apple 0.23%, Amazon 0.29%, Netflix -0.13%, Disney -0.83%, Zoom Video -0.13%, Alphabet 0.16% and Microsoft 0.56%,
Tech NXP Semi -1.58%, Nvidia 4.04%, Micron 1.26%, AMD 6.41%, Skyworks -1.96%
Industrial/Discretionary Boeing -0.22%, Caterpillar -0.28%, Simon Property -1.54%, Kohl’s 4.53%, Gap -3.45%, United Airlines -2.88%, Carnival -1.19%, Wynn Resorts -0.01%,
Auto Ford -2.61%, GM -1.16%, Tesla -1.93%,
Energy Chevron -0.63%, Exxon Mobil -0.89%,
Consumer Staples Campbell Soup -0.98% General Mills -1.88%, JM Smucker -0.34%

DAILY US CLOSING DATA
USD hits a 15 week high after CPI data, Bitcoin -1.98% at 117,476.36, VIX 1.05% at 17.38,
US T10 up 6 bpts to 4.485% and T2 up 6 bpts at 3.954%, T30 up 4 bpts to 5.015% after the inflation report.
OIL Brent -0.72%, WTI -0.69% as Trump set a 50 day deadline for Russia to end the war in Ukraine.
Gold -0.16%, Silver -0.28%, Copper -0.95% Platinum 0.19%, Palladium -0.42%.