EQUITIES: E-Mini S&P Bull Cycle Still Remains Intact

"S.KOREA PRESIDENTIAL OFFICE: TO ESTABLISH NEW FUND WORTH 5 TRILLION WON TO FOCUS ON INVESTMENTS ON PROMISING SEMICONDUCTOR MATERIALS, PARTS AND EQUIPMENT" - RTRS

• Japanese investors net bought JPY349bln of French bonds in June, the most since February 2025. Note that the near-20bp widening in the 10-year OAT/Bund spread through June was partly (~12bps) driven by a BBG benchmark roll. Otherwise, political/fiscal uncertainty ahead of RN leader Le Pen’s appeals court decision and the broader 2027 budget/election processes were cited as widening impulses through the month.
• There was also a second consecutive month of solid net buying of Italian paper in June  (JPY187bln after JPY243bln in May).
• Meanwhile, after fairly tepid streak of net purchases between January and May, Japanese investors net bought JPY238bln of UK bonds in June.
• On the other hand, Japanese investors net sold JPY883bln of US Treasuries’ in June, bringing year-to-date net selling to JPY4,448bln. 2-year UST yields rose 17bps in June, aided by a hawkishly perceived first FOMC meeting/press conference under new Chair Warsh.
• Higher frequency weekly flow data indicates that foreign investors sold JPY639bln of Japanese bonds in July, while purchasing JPY1,181bln of Japanese stocks. Foreigners have been net sellers of Japanese bonds since mid-June on a 4-week rolling basis. 

• The Yen is seeing continued downside in early trade. The EUR, GBP, USD and AUD are all printing fresh highs.
• As noted during the European Cash Govie Open, the Immediate resistance in the USDJPY is right here at 158.58 38.2% retracement of the Jul 23 - Aug 3 bear leg.
• AUDJPY is now eyeing a test towards 112.59 (61.8% retrace of the July/August range).
• GBPJPY has edged above 214.00 and the 50% retracement of the July/August range resides at 214.60.