Asian Macro Initial Thoughts: Data light again, US GDP data tonight & Core PCE. USD weaker on WSJ report that Trump will announce Powell's replacement by Sept as he seek to undermine the Chairman

NZX tested higher to 12,475 in early trades but then reversed and currently -16pts -0.13% at 12,445

Overview.
WSJ reports that Trump is considering announcing Powell’s replacement by September as he seeks to undermine the Chairman’s position, a move that is likely to upset markets and another blow to the credibility of the US dollar and the USD trending weaker on the news.

Oil rallied after data showed US stocks dropped more that expected. US Banks +VE on news the Fed was easing the enhanced supplementary leverage ratio, an important capital rule that big banks have complained limits their ability to hold more Treasuries and act as intermediaries in the $29 trillion market. The share price moves suggests it was expected.

FedEx weak but off initial lows after weaker than expected earning guidance, which suggests a -VE outlook for the US economy. Tesla -3.8% after its sales in Europe dropped for a 5 consecutive month… despite Musk saying a month ago that they had sort out the issue. Micron Technology gave an upbeat forecast for the current quarter, helped by demand for artificial intelligence equipment. Fiscal fourth-quarter revenue will be roughly $10.7 billion, well ahead of the $9.89 billion average analyst estimate. Micron is seeing increasing demand for components like its high-bandwidth memory, used in machines that develop and run AI tools. The company expects continued growth from that market as such software becomes more complex, requiring bigger amounts of memory.

NATO members agreed to increase spending to 5% of GDP; which combined with flattery and pomp seems to have persuaded Trump to remain within the alliance. King Charles also formally invited Trump for a state visit without a data being set. Trump has revealed that he will hold talks with Iran next week but most people doubt Trump’s claims. Defence Sec Hesketh due to hold a briefing Thursday morning US time, although there is doubt they will do anything more than endorse Trump’s statements.

Earnings continue
Thursday Acuity Q3, Inchcape interim trading update, James Latham FY, H&M HY, McCormick & Co Q2, Moonpig FY, Nike Q4, Serco pre-close trading statement, Volex FY, Walgreens Boots Alliance Q3
Friday Apogee Enterprises Q1

Housekeeping
This afternoon I will be on RTHK’s The Close, with Nitan Dialis and Tiffany Watkins Ahern, Senior Partner at Penta. if you have a question or topic you would like discussed we’d be happy to accommodate, please let me or them know via the link below. You can use the same link to listen to the programme too

https://www.rthk.hk/radio/radio3/programme/the_close

Last Monday I was on RTHK’s Money Talk with host Chloe Feng and Kerry Craig Global Market Strategist at JP Morgan Asset Management. Discussing the impact on markets and investor portfolio’s from Trump’s bombing of the Iranian Nuclear Facilities. Click the link below if you 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 tested higher to 12,475 in early trades but then reversed and currently -16pts -0.13% at 12,445

Australia - No Data Due
ASX to open lower, futures indicate -37 pts -0.43% at 8,500 despite the rise in energy prices overnight, Gold higher although Iron Ore weaker.
Watch Xero Ltd (ASX: XRO) if the cloud accounting platform provider returns from its trading halt. The company requested a halt yesterday so it could raise funds for the $3.9 billion acquisition of Melio. It is a leading US small business bill pay platform that seamlessly integrates Accounting and Payments, offering US small businesses and their advisors easy-to-use accounts payable workflows and a wide choice of payment methods. Xero is raising $1.85 billion at $176 per new share.

Japan
Market to open higher
Nikkei 225 Futures indicate up 20pts 0.05% at 38,950
Chicago Futures up 30pts 0.08% at 39,060
Singapore Nikkei Futures up 100 pts 0.26% at 39,020
Yen 145.20 at the close in US. Opening 144.97
Data Due 10 minutes pre market
Foreign Bond Investment vs ¥1571.3B prior
Stock Investment by Foreigners vs ¥473.4B
Lunchtime
2 Year JGB Auction vs 0.752%

S Korea
Market to open lower following the weakness in the US
Markets closed Wednesday slightly higher, trade volume was heavy at 624.7 million shares worth 18.7 trillion won ($13.7 billion), with winners outnumbering losers 466 to 420. Foreigners and institutions net sold while retail investors net bought shares. The local currency was trading at 1,362.4 won against the greenback at 3:30 pm.Wednesday, down 2.2 won from the previous session.
Data Out pre market
Business Confidence Jun 70 vs 73 May (F/cast was 75)

Taiwan - No Data Due
Market to open lower, Tech likely to cover some support after the good Micro guidance but concerns over the weak USD a worry.

China
Market to open lower
Golden Dragon Index closed -45pts -0.6% at 7,381
Spot USD/CNY opening +0.0027 flat at 7.1741
Data Due
National People’s Congress Standing Party underway finishes on Friday

Hong Kong
HSI to open lower
ADR’s closed -188pts -0.78% at 24,286 with only HSBC and SHKP in the green.
HK Futures are indicating -136pts -0.6% at 24,339
Turnover on Wednesday HK$267.801B vs HK$240.482B Tuesday whilst short selling activity declined.
HKMA continues to defend the USD/HKD peg.
Data Due After Market
Balance of Trade May vs HK$-16B (F/cast is HK$-18B)
Exports May YoY vs 14.7% Apr
Imports May YoY vs 15.8% Apr

Macau - No Data Due

Singapore - Data Due around Noon
15 Year Bond Auction vs 3.09% prior
Industrial Production May MoM vs 5.3% Apr (F/cast is -1%)
Industrial Production May YoY vs 5.9% Apr (F/cast is 1%)

Malaysia - Data Due late morning
PPI May YoY vs -3.4% Apr (F/cast is -4%)

Indonesia - No Data Due

Philippines - Data Could get
Budget Balance May vs PHP 67.3B

Thailand - No Data Due
Wednesday left Interest Rates unchanged from current 1.75%
Press reports Thailand's government is moving to recriminalize cannabis, plunging into limbo an industry estimated to be worth over US$1 billion (HK$7.8 billion) that has boomed since the substance was taken off the country's narcotics list in 2022. The push to impose new controls on recreational use of cannabis comes after the Bhumjaithai Party, which championed its legalisation, withdrew from the ruling coalition last week following Thai Prime Minister Paetongtarn Shinawatra's apparent mishandling of a border row with Cambodia. Late on Tuesday, Thailand's health ministry issued an order prohibiting the sale of cannabis for recreational use and making it mandatory for any retail purchase to require a doctor's prescription. The new rules will come into effect once they are published in the Royal Gazette, which could happen within days.

Myanmar - No Data Scheduled this week
Cambodia - No Data Scheduled this week
Vietnam - No Date Scheduled this week

India - Data Due
M3 Money Supply 13 Jun YoY vs 9.5% prior

Europe
Eurozone ECB General Council Meeting
Germany Consumer Confidence
France No Data Due
United Kingdom CBI Distributive Trades

United States
Futures opened Dow -5pts -0.01%, S&P -0.04% and NDX -0.04%
After Market
Micron Technology 0.3% gave an upbeat forecast for the current quarter, helped by demand for artificial intelligence equipment. Fiscal fourth-quarter revenue will be roughly $10.7 billion, well ahead of the $9.89 billion average analyst estimate. Micron is seeing increasing demand for components like its high-bandwidth memory, used in machines that develop and run AI tools. The company expects continued growth from that market as such software becomes more complex, requiring bigger amounts of memory. Stock initially rallied on the news but now flat
Data Due Fed’s Barkin Speaks, Durable Goods Orders, GDP Growth Rate, Chicago Fed National Activity Index, Corporate Profits, Durable Goods Orders Ex Transport, GDP Price Index, Goods Trade Balance Adv, Initial Claims, Continuing Claims, Jobless Claims 4 week average, Retail Inventories Ex Auto, Wholesale Inventories, Core PCE Prices, Durable Goods Orders ex Defence, GDP Sales, Non Defense Goods Orders, PCE Prices, Real Consumer Spending, Fed’s Hammack Speaks, Pending Home Sales, EIA Natural Gas Stocks Change, Kansas Fed Composite and Manufacturing Index, 4 & 8-Week Bill Auction, 15 & 30 year Mortgage Rate, 7-Year Note Auction, Fed Balance Sheet

HEADLINES & NEWS

AUSTRALIA & NEW ZEALAND
‘Let down our staff and audiences’: ABC apologises after losing Lattouf legal fight. The ABC has been blasted for wasting more than $1 million defending Antoinette Lattouf’s lawsuit after a court found the broadcaster unlawfully sacked her.

Inside the Qantas nerve centre as war causes traffic jams in the sky. Diversions of two long-haul Qantas aircraft due to the Middle East conflict provide an insight into what airlines deal with on a day-to-day basis.

Higher fines, lower speed limits: All the changes coming for Australian motorists Oblivious motorists across the country could rack up hundreds of dollars of penalties and increased demerit points due to subtle amendments to road rules.

JAPAN
Foxconn (2317.TW) is nearing a deal to supply electric buses to Japanese commercial automaker Mitsubishi Fuso Truck and Bus, Japan's Nikkei newspaper reported on Thursday, citing a source close to the Taiwanese chipmaker. Mitsubishi Fuso, owned by Daimler Truck, plans to sell the Model T bus and Model U microbus, both developed by Foxconn, under its own brand, the report said. Mitsubishi Fuso and Foxconn are looking to create a new company to oversee the buses, according to the report. The Taiwanese chipmaker said in a briefing in April it intends to roll out the Model T and Model U buses in Japan in 2027.

Japan could face a big power shortfall in 2050 if demand surges and aging thermal power plants are not replaced and older nuclear plants are decommissioned, the country's power transmission operators said on Wednesday in a long-term forecast. For years Japan had predicted a drop in future electricity demand due to its shrinking population, but it has recently revised this outlook to reflect new demand from data centres and chip plants. Under the scenarios provided by the Organization for Cross-regional Coordination of Transmission Operators, Japan's electricity demand is projected to rise 2-25% by 2040 from 2019 before the COVID pandemic, and by 8-42% by 2050. One of the scenarios highlights an 89-gigawatt shortfall if demand reaches 1.25 terawatt-hours, the upper end of its demand forecast, in 2050. The group makes a 10-year forecast every year, but this is the first time it has produced a longer-term projection. Its general manager Shinpei Konishi told reporters the forecast was released "to enhance predictability for power operators and other stakeholders planning investments.” In general, power industry experts are divided on how much the AI boom will increase electricity demand and the group's current forecasts also vary considerably. Among 16 scenarios for 2050, the largest projected shortfall - 89 GW - occurs under a high-demand case assuming no replacement of aging thermal power plants and decommissioning of nuclear plants more than 60 years old. Even with full replacement of thermal and nuclear capacity, a 23 GW shortfall remains under the same demand conditions. In contrast, a low-demand scenario with plant replacements shows a surplus of 12 GW. Each model assumes a summer nighttime scenario, when solar output drops and cooling demand peaks, representing the most severe conditions. The group forecasts renewable energy capacity to increase to between 170 GW and 260 GW in 2050. Japan's latest energy plan projects power generation to grow 12%-22% from 2023 levels to 1,100-1,200 TWh in 2040. The grid group's forecast sees demand reaching 900-1,100 TWh that year. It noted that its scenarios are not aligned with the government's energy plan, as they serve different purposes.

The government will consider cutting its economic growth estimate for the current fiscal year ending in March 2026 due to the expected hit to global demand from U.S. tariffs, three government sources told Reuters by Wednesday. The current projection of an 1.2% expansion, made at the end of last year, could be pushed down to below 1%, the sources said on condition of anonymity as they were not authorised to speak publicly. The government will finalize projections around the end of July, taking into account developments on U.S. tariffs, the sources said. Japan's tariff negotiator Ryosei Akazawa is arranging his seventh visit to the United States for as early as June 26, the Yomiuri newspaper reported on Tuesday. Japanese Prime Minister Shigeru Ishiba and U.S. President Donald Trump agreed to push ahead with trade talks when they met in Canada but failed to achieve a tariff deal. The government produces economic growth estimates twice each year with one made around summer used as a basis for drafting the state budget for the following fiscal year. In its latest quarterly projections released on May 1, the Bank of Japan cut its economic growth forecast for fiscal 2025 to 0.5% from 1.1%, reflecting the expected hit from U.S. tariffs.

Yuichiro Tamaki, leader of Japan's small opposition Democratic Party for the People, apologized Wednesday for remarks that were perceived on social media as misogynistic. Asked why his party has received little support from women, Tamaki said in English at a press conference in Tokyo on Tuesday, "I think our policy is good not only for men but also women...but I think it's very difficult to understand for them.” While the party, led by the former Finance Ministry bureaucrat, has pledged to promote measures to boost disposable income and has gained support from male workers, media polls show its popularity among women remains lower than among men. Tamaki, who earned a master's degree from Harvard University, said in a post on X on Wednesday, "I regret that I used a poor expression. I am truly sorry," adding, "I had no intention of being misogynistic.” In May, Tamaki drew the ire of social media users after he called the government's rice stockpiles "animal feed in a year.”

Japan’s military on Tuesday test-fired a missile on Japanese territory for the first time, as the country accelerates its military buildup to deter China. The Type 88 surface-to-ship, short-range missile was tested at the Shizunai Anti-Air Firing Range on Japan’s northernmost main island of Hokkaido. The Japan Ground Self-Defense Force’s 1st Artillery Brigade used a training missile to target a boat with no crew about 40km off the island’s southern coast.

SOUTH KOREA
The American Chamber of Commerce in Korea announced Wednesday that it hosted a policy gathering with Kim Ji-hee, Director-General for International Economic Affairs at the Ministry of Foreign Affairs, to explore avenues for public-private cooperation ahead of the 2025 Asia-Pacific Economic Cooperation Summit in Korea, scheduled for October. The event was part of the institution’s policy talks series, aimed at providing a valuable platform for senior policymakers and industry leaders to engage in dialogue on pressing issues affecting the US-Korea economic alliance. “The government’s ongoing efforts to engage the business community are crucial,” Kim said, “to ensure Korea’s APEC agenda delivers tangible results across the region.”

BankX said Wednesday that it has been selected to join the Global Market Expansion Program organized by the Ministry of SMEs and Startups, paving the way for its official entry into Silicon Valley. GMEP is a government-backed initiative that supports AI- and big data-driven startups with comprehensive assistance for global expansion. BankX is one of 20 startups selected for the Silicon Valley track, which provides full funding for business development, investor pitching and localization efforts. The program will be executed by Silicon Valley-based accelerator Team of Wakers, which will offer tailored support to each participating startup. BankX’s key innovation is its AI-powered app PlayPlanet — a location-based “benefits assistant” that helps consumers find nearby promotions from local merchants and recommends the most rewarding credit card at the point of purchase.

Bacardi has partnered with Starbucks Korea to launch a limited summer campaign that offers a refreshing twist on cafe culture through Sept. 30. “A Moment Between" introduces three Bacardi rum-based summer cocktails, available at 11 major Starbucks stores nationwide. This marks Starbucks Korea’s first alcoholic beverage partnership, positioning Bacardi in a more approachable, everyday setting. By bringing cocktails into familiar cafe spaces, the campaign aims to create new moments of connection and enjoyment. The campaign theme celebrates life’s in-between moments — between routine and rest, city and nature, the familiar and the new. More than just a seasonal menu, the collaboration encourages consumers to take a pause and enjoy a refreshing break as spring transitions into summer and early fall.

South Korea needs to attract 5 million highly-skilled foreign professionals and forge an economic alliance with Japan to tackle its demographic headwinds and counter rising trade protectionism, the Korea Chamber of Commerce and Industry proposed Wednesday. In a policy booklet roughly translates to "New Order, New Growth" delivered Tuesday to the government, parliament, and presidential office, the business lobby outlined structural fixes to help Korea escape the trap of slowing growth and a shrinking labor force. “This is a time when growth is more necessary than ever. The global landscape is shifting dramatically, and the Korean economy, having failed to bring about lasting change, now faces the risk of zero growth,” wrote Chey Tae-won, chairman of SK Group and KCCI, in the booklet’s preface.

SK Chemicals, the pharmaceutical unit of SK Group, announced Wednesday that it has signed a partnership agreement with Austria-based Durmont to produce sustainable automobile carpets. Under the agreement, SK Chemicals will supply Skypet CR — its chemically recycled polyethylene terephthalate resin — to Durmont. With a 40 percent market share, the company is one of Europe’s largest automotive carpet manufacturers. The partnership also includes Korean logistics firm Paarang, which will manage logistics and supply chain coordination between the two companies.

Kakao Bank has filed trademark applications in a preemptive move to establish a foothold in the stablecoin market, as the country accelerates efforts to institutionalize digital assets. Kakao Bank, an affiliate of internet giant Kakao, recently submitted trademark applications for BKRW, KRWB, KKBKRW and KRWKKB to the Korean Intellectual Property Office. These names combine KRW, the currency code for the Korean won, with KKB, an abbreviation of the bank’s name. The four trademarks fall under three categories related to cryptocurrency-based electronic transfers and financial transactions, bringing Kakao Bank’s total number of pending cryptocurrency-related trademark rights to 12.

LG Innotek said Wednesday it has developed and applied the world’s first copper post (Cu-Post) technology for high-value semiconductor substrates used in mobile devices, marking a new step forward in the pursuit of slimmer, high-performance smartphones. As global smartphone manufacturers increasingly compete to enhance performance while minimizing device thickness, the demand for advanced yet compact semiconductor substrate technologies is rising sharply. Anticipating the trend, the electronics parts maker began developing its next-generation Cu-Post technology in 2021. Unlike conventional methods, where solder balls connect chip substrates directly to the mainboard, the Cu-Post method leverages copper pillars to reduce the pitch and size of solder balls.

Hanwha Aerospace, South Korea’s largest defense contractor, is ramping up efforts to penetrate new global markets, placing its flagship K9 self-propelled howitzer at the center of its expansion strategy, the company said Wednesday. The company is actively seeking to expand its presence in Canada and Latin America by deepening engagement with local defense industries. In May, Hanwha Aerospace and its subsidiary Hanwha Ocean showcased their land and maritime defense systems to Canadian defense officials at CANSEC 2025, Canada’s largest defense trade show, where Hanwha was the sole Korean participant.

LS Cable & System said Wednesday that it will jointly participate in the Japan-Korea Submarine Communication Network Construction Project (JAKO) with its subsidiary LS Marine Solution. The JAKO project is a large-scale submarine communication infrastructure initiative led by a consortium of global tech giants and telecommunications companies, including Microsoft and Amazon Web Services, South Korea’s Dreamline, and Japan’s Arteria Networks. It is part of the broader E2A submarine cable system, which aims to dramatically increase digital connectivity and capacity between East Asia and North America.

Samsung Electronics (005930.KS) on Wednesday won a ruling from London's High Court in its attempt to get an interim licence to use ZTE's (000063.SZ) patents, in the English leg of the firms' global licensing dispute over mobile phone patents. English courts have recently permitted parties to pursue short-term patent licences pending trial, including in Amazon's dispute with Nokia and Lenovo's battle with Ericsson, before both ultimately settled. Wednesday's ruling, though, is the first time in England that a court of first instance - the initial court where a case is heard - has made such an interim licence declaration. Disputes over the fair, reasonable, and non-discriminatory (FRAND) terms of a patent licence have frequently led to global legal battles in the telecom industry. English courts can set global FRAND terms, following a landmark 2020 UK Supreme Court ruling, as can courts in China. Samsung sued ZTE in London in December 2024 seeking a determination of FRAND terms, with ZTE bringing parallel lawsuits against Samsung in China, Germany and Brazil.

TAIWAN
The UK plans to conduct more freedom of navigation operations in the Taiwan Strait and the South China Sea, British Secretary of State for Foreign, Commonwealth and Development Affairs David Lammy told the British House of Commons on Tuesday. British Member of Parliament Desmond Swayne said that the Royal Navy’s HMS Spey had passed through the Taiwan Strait “in pursuit of vital international freedom of navigation in the South China Sea.” Swayne asked Lammy whether he agreed that it was “proper and lawful” to do so, and if the UK would continue to carry out similar operations. Lammy replied “yes” to both questions. The Spey, a River-class offshore patrol vessel, on Wednesday last week sailed through the Taiwan Strait after participating in joint exercises in the East China Sea with Australia, Japan, South Korea and the US, the Royal Navy said at the time. On Monday, the Spey and Australia’s HMAS Sydney carried out a freedom of navigation operation in waters surrounding the Taiwan-claimed Spratly Islands (Nansha Islands) in the South China Sea.

A surging New Taiwan dollar is proving a double-edged sword for the economy, undermining export competitiveness while helping lower import costs, a familiar dilemma for domestic exporters, the central bank said yesterday, as the local currency has risen more than 10 percent against the US dollar this year. Taiwan has weathered similar cycles, central bank Deputy Governor Yen Tzung-ta said at a meeting of the legislature’s Economics Committee, citing the 2019–2022 period when the NT dollar appreciated to NT$27.532 against the greenback. Despite that, exports jumped 13.9 percent as GDP grew 4.3 percent, outperforming most major economies, thanks to remote working and schooling during the COVID-19 pandemic driving tech demand Yen said. The local currency’s strength this year reflects robust export momentum, driven by booming demand for chips and electronics used in artificial intelligence (AI) applications, even as global markets assess the implications of US President Donald Trump’s evolving tariff policy, he said. The NT dollar closed at NT$29.391 against the US dollar in Taipei trading yesterday, having gained 12.3 percent since April, central bank data showed. A stronger currency is not entirely a burden, as many manufacturers import raw materials, Yen said. A strong NT dollar helps lower input costs, which can help protect profit margins,” he said.

The government aims to have 4,000 electric buses operating across Taiwan by the end of this year, as part of measures to curb air pollution caused by ultrafine particulate matter (UFP), the Ministry of Transportation and Communications (MOTC) said yesterday. The plan was unveiled at a meeting of the legislature’s Social Welfare and Environmental Hygiene Committee, at which MOTC and Ministry of Environment officials briefed lawmakers on how they would implement the nation’s air pollution control policy after the EU last year began mandating the measurement of UFP across all of its member states. Electrification of public transportation is a strategy of the government to achieve net zero emissions by 2050, the MOTC said. The Executive Yuan in 2023 approved a budget of NT$64.3 billion (US$2.19 billion at the current exchange rate) to replace 11,700 gasoline and diesel-powered buses across Taiwan by 2030, with the MOTC providing NT$45.1 billion and the environment ministry providing NT$19.2 billion, it said. As of last month, the nation had registered 2,028 licensed electric buses, while 1,260 were under construction, it said.

ASE Technology Holding, the world’s biggest chip packager and tester, yesterday said it is cautiously evaluating new advanced packaging capacity expansion in the US in response to customers’ requests amid uncertainties about the US’ tariff policy. Compared with its semiconductor peers, ASE has been relatively prudent about building new capacity in the US. However, the company is adjusting its global manufacturing footprint expansion after US President Donald Trump announced “reciprocal” tariffs in April, and new import duties targeting semiconductors and other items that are vital to national security. ASE subsidiary Siliconware Precision Industries Co (SPIL) is participating in Nvidia Corp’s US$500 billion artificial intelligence (AI) infrastructure in Arizona over the next four years, along with other supply chain partners. Nvidia unveiled the investment project in April and SPIL is one of the suppliers of chip-on-wafer-on-substrate (CoWoS) packaging technology for the US company’s AI chips. Regarding this project, ASE “will proactively plan” capacity expansions, ASE chief operating officer Tien Wu told a media briefing. “Other than that, we have also received more requests from customers to build ‘made-in-America’ capacity. We are carefully evaluating this,” Wu said. Wu said that the US tariff policy did carry weight with ASE’s global manufacturing deployments.

Merida Industry has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would continue to control inventory and flexibly adjust market strategies in that market. Merida is a leading mid to high-end bicycle manufacturer, which distributes its products under the Specialized and Merida brands.

Taiwan has outperformed global averages in multiple financial inclusion categories, a report released on Monday by the Financial Supervisory Commission (FSC) said. Financial inclusion is a concept adopted by the UN in the 2000s that refers to ensuring that all members of society have equal access to responsible and sustainable financial services. Although it covers the availability of services for the general population, it is also aimed at making sure more vulnerable members of society, including the elderly, people with disabilities and lower-income households, have equal access to financial services.

International fuel prices are likely to stabilize, as Brent crude oil prices have fallen amid easing tensions in the Middle East, Minister of Economic Affairs J.W. Kuo said at a meeting of the legislature’s Economics Committee yesterday. Brent crude fell to US$67.14 a barrel yesterday morning from US$77.01 on Friday, while West Texas Intermediate crude for the August contract stood at US$64.37 a barrel, he said. The ministry is closely monitoring supplies of crude oil and liquefied natural gas (LNG), he said.

CHINA
A tropical depression may hit southern China as early as Thursday, meteorologists cautioned, bringing rain and gales to a flood-hit region still recovering from the impact of Typhoon Wutip two weeks ago. The tropical depression could make landfall somewhere between the island province of Hainan and Guangdong on the mainland on Thursday morning, China's National Meteorological Centre said in an online bulletin on Wednesday. The storm will again test the flood defences of densely populated Guangdong as well as Guangxi and Hunan further inland. Hundreds of thousands of people were evacuated when Wutip tore through the region from June 13 to 15, dumping record rains and damaging roads and cropland. Five people died.

China has battled with summer floods for millennia, but some scientists say climate change is resulting in heavier and more frequent rain. Massive flooding could set off unforeseen "black swan" events with dire consequences such as dam collapses, Chinese officials say. Heavy precipitation caused by typhoons will also aggravate seasonal rainfall from June to July, causing bigger-than-expected floods, Chinese meteorologists say. On Wednesday, unusually heavy rains struck Rongjiang in southwestern Guizhou province, half-submerging the city of 300,000 people as fast-rising flood-waters swept away cars, roared into underground garages and malls, and damaged vital infrastructure including its power grid. Affected by the rainfall in Guizhou, rivers in Guangxi downstream remained swollen on Wednesday, state media reported, with one waterway more than 9 metres (30 feet) above levels that are considered safe. China's economic planning agency in Beijing on Wednesday said it had urgently allocated 100 million yuan ($14 million) to assist disaster relief work in Guizhou, and an additional 100 million yuan to Guangdong and Hunan.

Entrusted by the State Council, Lan Fo'an, Minister of Finance of China, recently presented the 2024 central government final accounts report to the 16th meeting of the Standing Committee of the 14th National People's Congress, according to Xinhua News Agency. In 2024, various fiscal reform and development tasks have made new progress, and the overall situation of the central government final accounts was relatively good, according to the report. As a next step, the authorities will make good use of more proactive fiscal policies, introduce timely incremental reserve policies according to changes in the situation, focus on stabilizing employment, enterprises, markets and expectations, and make every effort to consolidate the fundamentals of economic development and social stability, the report added.

China's practice of securing its loans to low-income nations through commodity revenue streams and cash held in restricted escrow accounts is curbing their ability to manage their finances effectively, a study published on Thursday showed. China has lent hundreds of billions of dollars for infrastructure and projects in developing countries, but has been criticised for using earnings of commodity exports from borrower nations as security for the loans, sometimes arranged during times of economic strife for the borrower. China's government has repeatedly denied that its lending practices towards poorer countries are unscrupulous. China's total public and publicly guaranteed lending to low and middle-income countries totals $911 billion, said the report by AidData, the Kiel Institute for the World Economy and Georgetown University, together with other partners. Of that, nearly half - or $418 billion across 57 countries - is secured with cash deposits in Chinese bank accounts, it said. "As security, Chinese lenders strongly prefer liquid assets - in particular, cash deposits in bank accounts located in China. They also want visibility and control over revenue," said Christoph Trebesch of the Kiel Institute. The deposits in accounts located in China and controlled by the lending entities can average more than a fifth of the annual payments low-income commodity-exporting countries make to service their external debt, the research found. "Some of these revenues remain offshore beyond the control of the borrowing government for many years," the report said, adding the lack of access or transparency compromises debtor governments' ability to monitor and steer their fiscal affairs. China applies the practice to its lending to borrowers in Africa, Asia, Latin America and the Middle East, the study, which covered 2000-2021, found. "Our research reveals a previously undocumented pattern of revenue ring-fencing where a significant share of commodity export receipts never reach the exporting countries," said Brad Parks, executive director of the AidData research lab.

The U.S. sent letters to Enterprise Products (EPD.N), opens new tab and Energy Transfer (ET.N) on Wednesday informing the companies they could load ethane on vessels destined for China but could not unload the ethane in China without authorization, according to a person familiar with the matter and copy of one letter. The letters from the U.S. Department of Commerce follow a licensing requirement imposed several weeks ago on the companies' exports of ethane to China, which halted shipments and led to vessels anchoring in or hovering around the U.S. Gulf Coast.

OpenAI said on Wednesday its analysts have seen notable progress by Chinese start-up Zhipu AI in securing government contracts across several regions, signaling China's growing momentum in pursuing global AI leadership. Zhipu AI, which is backed by the Chinese Communist Party, aims to "lock Chinese systems and standards into emerging markets before U.S. or European rivals can, while showcasing a 'responsible, transparent and audit-ready' Chinese AI alternative," the ChatGPT maker said in its post. The company provides AI solutions — including sovereign large language model infrastructure and private hardware in partnership with Huawei — to governments and state-owned enterprises in Malaysia, Singapore, the UAE, Saudi Arabia and Kenya. The initiative forms part of China's broader effort to build a self-sufficient, globally competitive AI ecosystem that rivals the United States while reducing reliance on American technology. Zhipu AI, which did not immediately respond to a request for comment, is supported by more than $1.4 billion in state investment and maintains strong ties with the Chinese government and state-owned entities, according to OpenAI. In January, the company was added to the U.S. Commerce Department’s export control entity list, barring it from procuring U.S. components. Zhipu AI has been positioning itself among China’s leading AI firms alongside DeepSeek, Moonshot AI, and Minimax, as well as tech giants ByteDance and Alibaba (9988.HK). OpenAI has also built partnerships and attracted investment across the Middle East and Asia. Its "OpenAI for Countries" initiative helps interested governments develop "sovereign AI capability" in coordination with the U.S. government. The report comes as the U.S. and China engage in intense competition in the rapidly evolving AI landscape, with both nations vying for technological dominance.

HONG KONG
Earnings
YIDU TECH(02158.HK) announced its annual results for the year ended March 2025. Revenue from contracts with customers declined by 11.4% YoY to RMB714.979 million. Loss narrowed from RMB195 million in the corresponding period of 2024 to RMB117.788 million, with a LPS of RMB0.11. No dividend was declared.

Economy
Over 3,800 restaurants and merchants will offer special promotions on the day of the 28th anniversary of the establishment of the HKSAR, with the majority of participating eateries providing a significant 71 percent discount to customers -- echoing the handover date. A wide range of bargains will be offered within the catering sector, including those from fast food chains such as McDonald's, Fairwood, and KFC, as they will be selling designated cuisines or menu items at discounted prices.

IPO
Eternal Beauty(06883.HK), which will be listed today (26 June) opened up 4.9% to $3.02 on gray market, Peaking/ bottoming at $3.1/2.36, it closed at $2.81, down 2.4% or $0.07 from the listing price, on volume of 18.2 million shares and turnover of $49.9 million, according to PhillipMart data. On the Futu platform it opened up 3.5% to $2.98 on gray market, Peaking/ bottoming at $2.98/2.43, it closed at $2.74, down 4.9% or $0.14 from the listing price, on volume of 12.69 million shares and turnover of $33.05 million, Excluding handling fee, the book loss was $140 per board lot size of 1,000 shares.

Zhou Liu Fu(06168.HK), which will be listed today (26 June) opened up 7.7% to $25.85 on gray market, peaking/ bottoming at $27.65/24, it closed at $27.1, up 12.9% or $3.10 from the listing price, on volume of 6.74 million shares and turnover of $175 million, according to PhillipMart data. On the Futu platform it opened flat at $24 on gray market, on volume of 6.01 million shares and turnover of $154.74 million. Excluding handling fee, the book gain was $310 per board lot size of 100 shares.

SAINT BELLA(02508.HK), which will be listed today (26 June) opened up 0.3% to $6.6 on gray market, Peaking/ bottoming at $8.5/5.63, it closed at $8.02, up 21.9% or $1.44 from the listing price, on volume of 15.78 million shares and turnover of $116.56 million, Excluding handling fee, the book gain was $720 per board lot size of 500 shares on the Futu platform. On the Philipps platform it opened up 0.3% to $6.6 on gray market. Peaking/ bottoming at $8.5/6.6, it closed at $8.05, up 22.3% or $1.47 from the listing price, on volume of 14.5 million shares and turnover of $108 million, excluding handling fee, the book gain was $735 per board lot size of 500 shares.

CaoCao Inc.(02643.HK), which listed Wednesday, opened at $33.8, down 19.4% from the listing price of $41.94. Peaking/ bottoming at $36.8/32.85, the stock closed at $36, down 14.2% from the listing price of $41.94, on volume of 13.53 million shares and turnover of $484.53 million. Excluding handling fee, the book loss was $594 per board lot size of 100 shares.

X.J. Electrics (02619.HK), which listed Wednesday, opened at $2.65, down 7.3% from the listing price of $2.86. Peaking/ bottoming at $2.74/2.51, the stock closed at $2.52, down 11.9% from the listing price of $2.86, on volume of 30 million shares and turnover of $80.83 million. Excluding handling fee, the book loss was $340 per board lot size of 1,000 shares.

MegaRobo, a company backed by WUXI APPTEC (02359.HK), plans to list in Hong Kong as early as this year, Bloomberg reported, citing sources. The company is currently working with advisors in anticipation of raising at least USD300 million.

Buybacks
TENCENT (00700.HK) repurchased 979,000 shares Wednesday (25th) at a price per share ranging from $508.5 to $514.5, involving $500 million. Since the repurchase mandate resolution was passed on 14 May, the Group has repurchased a total of 27.507 million shares, accounting for approx. 0.29935% of its issued shares.

HSI Short Selling Wednesday 14.2% vs 17.6% Tuesday
Top shorts China Shenhua (1088) 49%, Wuxi Apptec (2359) 42%, CM Bank (3968) 41%, BYD (1211) 37%, Henderson Land (12) 37%, Bud APAC (1876) 36%%, Zijin Mining (2899) 32%, Xinyi Glass (868) 31%, Hengan (1044) 31%, OOIL (316) 29%, Wuxi Bio (2269) 27%, Li Auto (2015) 26%, Chow Tai Fook (1929) 25%, Hansoh Pharma (3692) 25%, Sinopec (386) 25%, Zhong Sheng (881) 25%.

WATCH
BOSS ZHIPIN-W (02076.HK) (BZ.US) announced plans to issue 30 million Class A shares. Zhao Peng, the company's founder, chairman, and CEO, explained that the company chose to list in Hong Kong at the end of 2022 by way of introduction as it feared that the shares wouldn't sell given the poor market conditions at that time. The company has been waiting for the right opportunity over the past few years to enhance share liquidity, Zhao said. It wasn't until 1H25 when market conditions improved that the company decided to issue more shares. The maximum offering price for this share issuance is set at HKD78 per share, marking a premium of more than 14% over yesterday's (24th) closing price of the company. Executive Director and CFO Zhang Yu noted that the maximum offering price is merely a formal upper limit. The final pricing will be determined based on investor feedback during the offering period, subscription levels, and the closing price of the company's shares in the coming days, so that investors will be provided with a more reasonable discount.

DONGFENG GROUP (00489.HK) entered into a joint venture contract with NCIC, a wholly-owned subsidiary of Nissan (7201.JP), under which the parties agreed to establish a joint venture company to jointly engage in the automotive export business. The registered capital of the joint venture will be RMB1 billion, while DONGFENG GROUP and NCIC will contribute RMB400 million and RMB600 million respectively, holding 40% and 60% equity.

Rating agency Moody's affirmed the A1 ratings of the backed senior unsecured notes of Sun Hung Kai Properties (Capital Market) Ltd. and the provisional (P)A1 rating for its multicurrency medium-term note (MTN) program. Both the notes and MTN program are unconditionally and irrevocably guaranteed by SHK PPT (00016.HK). Moody's also upgraded its rating outlook from 'Negative' to 'Stable’. The rating affirmation and outlook adjustment to stable reflects the expectation that SHK PPT's net debt level will continue to decline over the next 2-3 years, benefiting from a significant improvement in contracted sales over the past 12 months and its prudent financial management, Stephanie Lau, Vice President and Senior Credit Officer at Moody's, said. These factors will provide sufficient buffer to withstand potential weakening earnings in a persistently challenging real estate market environment.

GUOTAI JUNAN I (01788.HK) +198% received approval from Hong Kong's Securities and Futures Commission to provide virtual asset trading services, lifting its stock price by 1.98 times for the day to HKD3.7. Its turnover of HKD16.385 billion also marked the highest turnover of the day.

Chinese EV manufacturer, BYD COMPANY (01211.HK), has slowed down its production and expansion pace in recent months, Reuters quoted sources as saying. At least one-third of the output at a minimum of 4 BYD COMPANY's factories had canceled night shifts and reduced production, meanwhile some new production line plans have been suspended, the report added. Last year, BYD COMPANY sold 4.27 million vehicles, and has at least 7 factories in mainland China, with a sales target of 5.5 million vehicles this year.

Ni Jun, CATL (03750.HK)'s Chief Manufacturing Officer, revealed that the company is prioritizing overseas expansion as the competition in the Chinese automotive market is so intense that it is threatening the healthy development of the industry. As both industry insiders and the government are aware that irrational competition is unhealthy and can destroy the industry, the company is making every effort to heighten production utilization to cope with the challenging market environment and has been studying global expansion strategies given the increasing global demand for high-quality batteries, Ni added.

XIAOMI-W (01810.HK) announced that its South Korean subsidiary, Xiaomi Technology South Korea, has opened its first physical store in South Korea as part of the group's global expansion strategy, according to Yonhap News Agency. In January 2025, XIAOMI-W established a subsidiary in South Korea and launched an official online store.

Wednesday closings in EUROPE & US
DAX -0.61%, CAC -0.76%, FTSE -0.46%
European markets opened slightly higher but then trended lower through the day with investors cautious over the state of the Israel/Iran ceasefire.. Defence stocks rallied on news that NATO members will increase spend 5% of GDP, up from 2%; Babcock 11.5%, announced a share buyback and raised its medium forecast. It makes Type 31 frigates for the Royal Navy and said that, as it is flush with cash and had lowered its debt ratio sufficiently, it was returning money to shareholders through a £200 million share buyback. The stock is up 115% over the past 12 months.

DOW -0.25%, NDX 0.31%, S&P flat, Russel 2K -1.16%
US markets drifted lower from the open for most of the day with a slight up turn in the late afternoon. Markets remain close to their record hihgs. AI rallies with Nvidia 4.3% to a new record high; AMD 3.6%, Alphabet 2.3%.

BP 1.6% but had popped 7% on rumours, later denied that it was in talks to be acquire by Shell -0.26% Bumble rallied 25% on news it is cutting 30% of its workforce.

New Home sales were much weaker than expected, the slowest for 8 months. The Iran/Israel ceasefire seems to be holding but investors remain cautious, especially with a lack of detail about the deal and about how much impact Trump’s bombing really had. Powell’s testimony reinforced what he said on Tuesday.

Mastercard is joining the Global Dollar Network, a stablecoin consortium founded by blockchain company and stablecoin issuer Paxos, and adding support for PayPal’s stablecoin (PYUSD) and the newly introduced Fiserv stablecoin (FIUSD). Robinhood, Galaxy and crypto exchange Kraken are also members of the group. Mastercard will continue to support Circle’s USDC.

Shares of New York regional bank Flagstar -6% after the apparent victory of Zohran Mamdani in the New York City Democratic mayoral primary.

Banks JPMorgan Chase 1%, Citigroup 1.84% Wells Fargo 1.23%, Amex 0.07%
Ecommerce Meta -0.49%, Apple 0.63%, Amazon -0.37%, Netflix -0.3%, Disney 0.65%, Zoom Comms 0.22%, Alphabet 2.24% and Microsoft 0.44%,
Tech NXP Semi -0.56%, Nvidia 4.33%, Micron -0.52%, AMD 3.59%, Skyworks 1.16%
Industrial/Discretionary Boeing -1.02%, Caterpillar -0.39%, Simon Property -1.7%, Kohl’s -1.34%, Gap -0.51%, United Airlines -2.9%, Carnival -0.86%, Wynn Resorts 1.03%
Auto Ford -2.33%, GM -1.78%, Tesla -3.79%,
Energy Chevron -0.22%, Exxon Mobil 0.03%,
Consumer Staples Campbell Soup -3.08% General Mills -5.11%, JM Smucker -1.51%

DAILY DATA
USD weakest since 2021, Bitcoin 1.86% at 107,513.85, VIX -4.12% at 16.76,
US T10 down less than 1 bpts to 4.289% and T2 slightly lower at 3.775%, T 30 down less than 1 bpt at 4.837%
OIL Brent 0.8%%, WTI 0.85% as US oil stocks were lower WoW than expected
Gold 0.15%, Silver 0.27%, Copper 0.22% Platinum 1.54%, Palladium 0.81%.