MNI EUROPEAN MARKETS ANALYSIS: A$ Surges On RBA Hold

• Early focus was on fallout from Monday's US tariff announcements for a number of Asian economies. Negative risk appetite was limited though as Trump still appears willing to negotiate ahead of the Aug 1 deadline.
• The RBA surprised the market by keeping rates on hold. It wants to see more evidence of inflation sustainably returning to the 2-3% target band. The AUD shot higher, while RBA-dated OIS pricing is 11-23bps firmer across meetings.
• Looking ahead, in the US we have the NFIB small business survey, along with NY Fed inflation expectations. 

MARKETS

US TSYS: Asia Wrap - Quiet Session

The TYU5 range has been 110-29+ to 111-01+ during the Asia-Pacific session. It last changed hands at 111-00, up 0-02 from the previous close. 

• The US 2-year yield has moved lower trading around 3.884%, down 0.01 from its close.
• The US 10-year yield is relatively unchanged trading around 4.38%.
• The 10-year yield has seen a  strong bounce in reaction to the better NFP print. This 4.35/40% area offers those who would like to express a long the opportunity to fade. A sustained close back above 4.45% area though would not be great for the bulls and would see more of the longs prepared back.
• Per Politico: "The United States has offered an agreement to the European Union that would keep a 10 percent baseline tariff on all EU goods, with some exceptions for sensitive sectors such as aircraft and spirits, an EU diplomat and a national official told POLITICO."
• (Bloomberg) -- “Scott Bessent told CNBC that he’ll meet with his Chinese counterpart within the next couple of weeks.”
• Data/Events: Bond investors will be focusing on the Fed Minutes and the demand for 10 & 30-year maturities this week. NFIB Small Business Optimism tonight

JGBS: Aggressive Bear-Steepening

JGB futures are weaker but sitting in the middle of today’s range, -12 compared to settlement levels.

• (Bloomberg) -- "Japan's super-long bonds extended their recent declines, pushing the yield on 30-year debt back above 3% and within sight of a record high. The moves come as investors weigh the impact of a new Aug. 1 deadline for US tariffs and as concern mounts that an upper house election in Japan on July 20 will usher in higher government spending."
• Cash US tsys are slightly cheaper in today's Asia-Pac session.
• Politico: "The United States has offered an agreement to the European Union that would keep a 10 per cent baseline tariff on all EU goods, with some exceptions for sensitive sectors such as aircraft and spirits, an EU diplomat and a national official told POLITICO."
• Cash JGBs have twist-steepened across benchmarks, with yields 1bp lower to 14bps higher. The benchmark 5-year yield is little changed after today's supply.
• Today’s 5-year JGB auction showed mixed signals on demand. The low price came in line with expectations, but the bid-to-cover ratio declined to 3.5411x.
• Swap rates are also showing a twist-steepener, with rates 1bp lower to 7bps higher.
• Tomorrow, the local calendar will see M2 & M3 Money Stock and Machine Tool Orders(P). 

AUSSIE BONDS: Cheaper After RBA Surprise Market With No Cut

ACGBs (YM -12.0 & XM -8.0) are 3-6bps cheaper after the RBA surprised the market by leaving the cash rate at 3.85%. A 25bp rate cut today was given a 92% probability ahead of the decision by the market. 

• The RBA Board sees inflation risks as more balanced and the labour market as strong, but remains cautious due to uncertainty in demand and supply. It will await more data to confirm inflation is tracking toward 2.5%.
• Policy remains flexible to global developments. A 6–3 majority supported today’s decision, and future statements will include an unattributed record of votes. The Board remains focused on price stability and full employment.
• Cash ACGBs are 6-8bps cheaper after the decision with the AU-US 10-year yield differential at -11bps.
• The bills strip has shunted cheaper, with pricing -5 to -12 after the decison.
• RBA-dated OIS pricing is 11-23bps firmer across meetings after the decision. A cumulative 64bps of easing priced by year-end versus 75bps pre-RBA
• Tomorrow, the local calendar will see a speech by RBA Hauser.
• The AOFM plans to sell A$1200mn of the 4.25% 21 December 2035 bond tomorrow and A$1000mn of the 2.75% 21 November 2029 bond on Friday.

STIR: RBA Dated OIS Shunts Firmer After Surprise RBA Decision

RBA-dated OIS pricing is 11-23bps firmer across meetings after the RBA surprised the market by leaving the cash rate at 3.85%. A 25bp rate cut today was given a 92% probability by the market ahead of the decision.

• A cumulative 62bps of easing is priced by year-end (based on an effective cash rate of 3.84%) versus 75bps pre-RBA.

Figure 1: RBA-Dated OIS – Post-RBA Vs. Pre-RBA

Source: Bloomberg Finance LP / MNI

RBA: On Hold, Wants To See More Evidence Inflation Sustainably In 2-3% Band

The RBA has surprised the market by leaving the cash unchanged at 3.85%. The wide spread consensus in terms of sell-side views and market pricing was for a 25bps cut today. See the link to RBA statement here. 

• It appears that the central bank wants to see a little more evidence that inflation is sustainably tracking lower before easing further, it noted in the statement: "With the cash rate 50 basis points lower than five months ago and wider economic conditions evolving broadly as expected, the Board judged that it could wait for a little more information to confirm that inflation remains on track to reach 2.5 per cent on a sustainable basis."
• It noted international uncertainties remain elevated, even if worst case trade/tariff scenarios are likely to be avoided. The RBA stated that: "Setting aside overseas developments, private domestic demand appears to have been recovering gradually,", as well as "At the same time, various indicators suggest that labour market conditions remain tight." There are uncertainties regarding the outlook for domestic demand and the labour market it added.
• The RBA stated it was well placed to respond to international developments as well.
• Finally, the statement added: "The Board has decided to publish an unattributed record of votes in the post-meeting statement. Today’s policy decision was made by majority; 6 in favour, 3 against."
• Presumably the 3 against the decision were in favor of a 25bps cut.
• At face value, the RBA wants to see more evidence of that inflation will sustainably reach the 2-3% target. At the end of this month the Q2 (and June monthly print) inflation data is out. The next policy outcome is due on Aug 12. Jobs data, with June figures due next Thursday, a likely watch point as well, along with domestic demand indicators.
• In a little under 35mins, RBA Governor Bullock will commence her press conference.  

AUSTRALIA DATA: NAB Business Conditions Up Firmly In June, Wages Remain Benign

The Australia NAB survey of business conditions for June showed notable improvement. We rose to +9 from flat in May. This is the highest print since March last year. Business confidence also rose, up to +5, from +2 in May. The first chart below plots the NAB business conditions index (the white line on the chart) against Australia y/y GDP growth. 

• In terms of the underlying conditions in the survey, trading rose to +15, from +5. Profitability improved to +4, from -5, while employment was +3, from +1 prior. Forward orders were flat, versus -2 in May. Capex rose to +10 from +6 prior. Exports and exporter sale conditions remained negative though.
• Wage conditions were little changed at 1.5%. The second chart is this sub-index on wages versus the quarterly ABS wage outcome (in y/y terms). It is still suggesting a benign wages backdrop.
• The data, particularly from an activity standpoint, is encouraging, but is only one monthly print, and the RBA is likely to want to see firm evidence of improvement in real activity outcomes. 

Fig 1: NAB Australia Business Conditions & GDP Y/Y 

Source: Bloomberg Finance L.P./MNI/Bloomberg 

Fig 2: NAB Australia Business Survey On Labour Costs & Wages Y/Y 

Source: Bloomberg Finance L.P./MNI/Bloomberg 

BONDS: NZGBS: Closed Modestly Cheaper Ahead Of RBNZ Decision Tomorrow

NZGBs closed modestly cheaper, with benchmark yields 2-3bps higher.

• The NZ-US and NZ-AU 10-year yield differentials closed slightly tighter. It is noteworthy, however, that the local market was closed at the time of the RBA decision. Tomorrow’s open is likely to reflect both post-RBA decision trading as well as any overnight fluctuations in US tsys.
• Swap rates closed 1-3bps higher, with the 2s10s curve steeper.
• Tomorrow, the local market will see the RBNZ Policy Decision. The sell-side consensus is for the RBNZ to remain on hold tomorrow, which is also consistent with market pricing.
• There are some sell-side forecasters looking for a rate cut tomorrow, whilst most of those who see the RBNZ on hold, see risks of further cuts as we progress through 2025. For this meeting, our own bias is for the central bank to hold policy rates steady. Recent inflation outcomes arguably provide the strongest signal that the RBNZ should hold pat at tomorrow's policy meeting. (See MNI RBNZ Preview here)
• RBNZ dated OIS pricing closed little changed across meetings. 3bps of easing is priced for this week's meeting, with a cumulative 30bps by November 2025.
• On Thursday, the NZ Treasury plans to sell NZ$250mn of the 3.00% Apr-29 bond and NZ$200mn of the 4.50% May-35 bond.

RBNZ: MNI RBNZ Preview-July 2025: Likely On Hold

• The sell-side consensus is for the RBNZ to remain on hold tomorrow, which is also consistent with market pricing. There are some sell-side forecasters looking for a rate cut tomorrow, whilst most of those who see the RBNZ on hold, see risks of further cuts as we progress through 2025. For this meeting, our own bias is for the central bank to hold policy rates steady.
• Recent inflation outcomes arguably provide the strongest signal that the RBNZ should hold pat at tomorrow’s policy meeting outcome.  Further on the inflation front was a tick up in inflation expectations for Q2. We are coming off a low base (just up from 2%), but the central bank may want to see Q3 trends (this data gets released on Aug 7) before drawing further conclusions as to whether trends are shifting or not.
• In contrast, growth indicators are still arguing for easier policy settings. The central bank is likely to be comfortable to preserve policy space at this juncture and assess upcoming inflation trends. It is likely to leave the door ajar for further policy support given headwinds to domestic growth.
• See this link: 

AUD: Asia Wrap - RBA Surprises Market Helping The AUD To Bounce

The AUD/USD has had a range of 0.6491 - 0.6558 in the Asia- Pac session, it is currently trading around 0.6540, +0.75%. The pair has popped higher as the RBA surprised the market by holding rates at 3.85% when a cut was almost fully priced in by the market. This has seen the AUD/USD almost completely erase all its losses from yesterday, where it trades from here will now depend on the fortunes of the USD going forward.

• ”The Board continues to judge that the risks to inflation have become more balanced and the labour market remains strong. Nevertheless it remains cautious about the outlook, particularly given the heightened level of uncertainty about both aggregate demand and supply. The Board judged that it could wait for a little more information to confirm that inflation remains on track to reach 2.5% on a sustainable basis.” - (BBG)
• (Bloomberg) -- Japanese investors bought the largest amount of Australian sovereign bonds in two years in May, according to the Asian nation's latest balance-of-payments data. Net purchases totaled ¥213.6 billion, the most since April 2023, and followed four months of selling
• The AUD/USD has bounced strongly off its support around 0.6500, back to the 0.6500 - 0.6600 range for now as it will now take its cues from the USD, a break of 0.6600 could signal a move back towards 0.6900/0.7000.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6435(AUD904m), 0.6375(AUD 722m), 0.6545(AUD 493m). Upcoming Close Strikes : 0.6425(AUD700m July 9), 0.6300(AUD866m July 8)
• CFTC Data shows Asset managers pared back their shorts slightly -35992, the Leveraged community maintained their shorts -22903.
• AUD/JPY - Today's range 94.73 - 95.69, it is trading currently around 95.50, +0.70%.  The pair found solid demand back towards 94.00 which stands out considering risk traded lower overnight. The range looks to be 93.50 - 96.00 a break above 96.00 could see a further paring back of AUD/JPY shorts.

Fig 1: AUD/JPY spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

FOREX: Asia FX Wrap - The USD Drifting Lower

The BBDXY has had a range of 1193.81 - 1196.62 in the Asia-Pac session, it is currently trading around 1194. The USD has drifted lower in a quiet Asia-Pac session, -0.18%, giving back a little of its overnight gains. “Asian equities are holding up in the face of tariff angst as markets appear to be leaning into a familiar playbook: President Trump blusters, then backpedals. Many of the early jitters have faded, replaced by hopes of flexibility. Traders are latching onto signs that the Aug. 1 deadline may not be set in stone and that the White House remains open to negotiation. A proposed 10% tariff deal with the EU is also feeding that optimism." BBG

• EUR/USD -  Asian range 1.1709 - 1.1749, Asia is currently trading 1.1745. The pair got a nice bounce on the news of a proposed deal with the US. The price is starting to look a little stretched in the short term and is vulnerable to any correction in the USD, first support is back towards 1.1600.
• GBP/USD - Asian range 1.3599 - 1.3639, Asia is currently dealing around 1.3635. Strong demand was again seen below 1.3600 helping the support to hold. A sustained move sub 1.3550 needed to signal a deeper correction.
• USD/CNH - Asian range 7.1706 - 7.1796, the USD/CNY fix printed 7.1534, Asia is currently dealing around 7.1720. Sellers should be around on bounces while price holds below the 7.2500 area and the PBOC manages the fix lower.
• Cross asset : SPX +0.01%, Gold $3331, US 10-Year 4.39%, BBDXY 1194, Crude oil $67.52

• Data/Events : France Trade Balance, Germany Trade Balance

  Fig 1: GBP/USD Spot Hourly Chart

  

  Source: MNI - Market News/Bloomberg Finance L.P

FOREX: Leveraged Investors Sell EUR, GBP, Asset Managers Buy Per CFTC

The CFTC FX positioning update (for the week ending July 1) didn't point to strong directional shifts for the USD. The table below updates positioning by currency and investor type, as well as changes from the prior week. 

• In the leveraged space, EUR and GBP were sold, but net longs still prevail for this investor segment for these currencies (albeit just for GBP). There was little changed in JPY positioning for leveraged investors, which remains an outright long. The AUD short was largely maintained, while the NZD short was cut back modestly.
• For asset managers, we saw some offset, with EUR and GBP bought. This added to the EUR net long, and cut the GBP net short. The recently established NZD net long was cut, while CAD shorts were added.  

Table 1: CFTC Positioning Data By Currency & Investor Type 

Source: Bloomberg Finance L.P./CFTC/MNI

JPY: Asia Wrap - USD/JPY Finds Supply Towards 146.50

The Asia-Pac USD/JPY range has been 145.83 - 146.45, Asia is currently trading around 146.00, +0.05% having found decent supply towards the 146.50 area in our session. USD/JPY price action was telling overnight as it marched relentlessly higher challenging a market positioned the wrong way. Price is still well within the wider 142.00 - 148.00 range and the pair will probably continue to take its cue from the US rates market.

• (Bloomberg) -- “Japan’s super-long bonds extended their recent declines, pushing the yield on 30-year debt back above 3% and within sight of a record high. The moves come as investors weigh the impact of a new Aug. 1 deadline for US tariffs and as concern mounts that an upper house election in Japan on July 20 will usher in higher government spending.”
• Zerohedge on X: - “Impact of new tariff on Japan (if remains unchanged): JPM strategist Rie Nishihara expects a reciprocal tariff of 24% will lead to 0.4%-0.9% drag in Japan GDP and 7% decline in TOPIX 2025 EPS. The downside scenario estimated by Rie for NKY is 34,000.”
• (Bloomberg) -- Japanese Finance Minister Katsunobu Kato says that he’s not planning to hold talks specifically on currencies with US Treasury Secretary Scott Bessent in the near future.
• USD/JPY has lost all downside momentum for now and is back in its wider 142.00 - 148.00 range. The Market is long JPY and should the USD manage to follow through with yesterday's price action the risk is a move back to the top end of the range to further challenge the conviction of the shorts.
• Options : Close significant option expiries for NY cut, based on DTCC data: 146.60($948m).Upcoming Close Strikes : 144.50($860m July9).
• CFTC data shows Asset managers increased their JPY longs slightly +94753, while leveraged funds maintained their longs they have tried to rebuild +15798.

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

NZD: Asia Wrap - NZD/USD Demand Seen Just Below 0.6000

The NZD/USD had a range of 0.5995 - 0.6021 in the Asia-Pac session, going into the London open trading around 0.6015, +0.32%. The pair has drifted higher for most of our session as the market tries to view the Europe trade deal as a potential playbook and hopes that the Aug.1 deadline has not been set in stone. US Equity futures turned positive after opening lower in Asia, ESU5 +0.04%, NQU5 +0.20%. We have seen this ‘movie’ before and it normally ends with the USD faltering and moving lower again, is this time different ? The NZD found support again around the 0.6000 area as it tries to build a base from which to move higher, a sustained break below here though would risk a deeper correction back to 0.5850/0.5900.

• MNI RBNZ Preview-July 2025: Likely On Hold. The sell-side consensus is for the RBNZ to remain on hold tomorrow, which is also consistent with market pricing. There are some sell-side forecasters looking for a rate cut tomorrow, whilst most of those who see the RBNZ on hold, see risks of further cuts as we progress through 2025. For this meeting, our own bias is for the central bank to hold policy rates steady.
• RBNZ dated OIS pricing is little changed across meetings today, ahead of tomorrow's RBNZ Policy Decision. 3bps of easing is priced for this week's meeting, with a cumulative 32bps by November 2025.
• The NZD/USD has lost all its upward momentum and is back testing its support around the 0.6000 area. If risk has a deeper correction and the USD can find some upward momentum the risk is a move back towards the 0.5850/0.5900 area.
• Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.6075(NZD519m July 9), 0.6000(NZD407m July 10), 0.6025(NZD373m July10).
• CFTC Data shows Asset Managers have reduced their newly built longs in NZD +8515, the Leveraged community reduced their short last week -8424.
• AUD/NZD range for the session has been 1.0820 - 1.0839, currently trading 1.0830. The cross is struggling to get any momentum for now. It looks to be in a 1.0750 - 1.0850 range for now as it awaits a catalyst to provide some direction. Can the RBA today and RBNZ tomorrow give this pair the energy it needs to move higher again ?

Fig 1: NZD/USD Spot Hourly Chart

Source: MNI - Market News/Bloomberg Finance L.P

ASIA STOCKS: Stocks Advance on Hope of Further Negotiations

The headlines overnight focused on the imposition of tariffs on Japan and Korea and the sending of letters to other countries.  However markets today focused on President Trump's suggestions that he remains open to further negotiations, further delaying tariffs until August.  These comments eased earlier concerns .  

• China's major bourses were strong with the Hang Seng leading the way with gains of +0.79%, CSI 300 up +0.74%, Shanghai Comp up +0.58% and Shenzhen rising +1.07%
• In Taiwan, the TAIEX was one of the few fallers, down -0.61% today.
• The KOSPI had a slow start to the day but things improved on Trumps comments and it has gained +1.40% to be one of the best performers of the major bourses.  
• The FTSE Malay KLCI is down -0.54% and the Jakarta Comp down just -0.05%.
• The FTSE Straits Times in Singapore is up +0.45% and the PSEi in the Philippines down -0.17%
• The NIFTY 50 is doing very little following yesterday finishing flat.  

ASIA STOCKS: Moderate Regional Outflows as tariff headlines dominate

Ahead of a Potentially Volatile Period as the tariff deadline approaches, outflows were strong across major bourses. 

• South Korea: Recorded inflows of +$29m yesterday, bringing the 5-day total to +$185m. 2025 to date flows are -$9,183. The 5-day average is +$37m, the 20-day average is -$22m and the 100-day average of -$80m.
• Taiwan: Had outflows of -$210m yesterday, with total inflows of +$2,704 m over the past 5 days. YTD flows are negative at -$3,225. The 5-day average is +$541m, the 20-day average of +$469m and the 100-day average of -$6m.
• India: Had inflows of +$81m as of the 4th, with total outflows of -$85m over the past 5 days.  YTD flows are negative -$8,337m.  The 5-day average is -$17m, the 20-day average of +$124m and the 100-day average of +$1m.
• Indonesia: Had outflows of -$36m  yesterday, with total outflows of -$186m over the prior five days.  YTD flows are negative -$3,423m.  The 5-day average is -$37m, the 20-day average -$23m and the 100-day average -$32m.
• Thailand: Recorded inflows of +$18m yesterday, with outflows totaling -$101m over the past 5 days. YTD flows are negative at -$2,438m. The 5-day average is -$20m, the 20-day average of -$13m and the 100-day average of -$21m.
• Malaysia: Recorded outflows as of -$64m yesterday, totaling -$8m over the past 5 days. YTD flows are negative at -$2,735m. The 5-day average is -$2m, the 20-day average of -$11m and the 100-day average of -$20m.
• Philippines: Recorded inflows of +$2m yesterday, with net inflows of +$49m over the past 5 days. YTD flows are negative at -$546m. The 5-day average is +$10m, the 20-day average of -$2m the 100-day average of -$5m.

MNI BNM Preview - July 2025: On Hold But Only Just

Download Full Report Here:

We see the BNM on hold in what is a very close call due to:

• The tariff situation remains unresolved, with US Secretary of State heading to Malaysia.
• Both exports and imports are volatile, but impacted by the tariff deadline.
• The Central Bank's GDP forecast remains robust.
• Inflation continues to moderate and will likely play a factor for the coming meetings.  

OIL: Supply Concerns Re-assert as Oil Falls

• The realities of the August increase in supply and the potential further increase in September saw oil take a tumble in the Asia trading day.
• Down -0.46% at US$67.62 WTI remains at the mid-point between the 200-day EMA of $68.45 and the 20-day EMA of $66.93.
• Brent is down -0.43% at $69.30, sitting atop the 100-day EMA of $69.22
• The push pull of tariff headlines has increased volatility today as investors decipher the latest from the US and what the potential impact on global growth may be.  
• There are looming supply chain risks in the Red Sea as Houthis rebels targeted a vessel near Yemen.   

INDIA: Country Wrap: Trade Deal Close According to Trump

• US President Donald Trump on Tuesday said that the States was 'close' to agreeing a deal with India as he announced tariffs on 14 other nations, some of who are India's neighbours (source Times of India)
• India has solidified its position as the world’s fastest-growing major economy, with real GDP growth estimated at 6.5% in 2024–25 – a pace expected to continue into 2025–26, according to the Reserve Bank of India. This robust performance comes at a time when global economic uncertainty continues to loom.  Fuelled by strong domestic demand, easing inflation, and rising exports, the Indian economy has shown resilience across sectors. Key economic indicators – including record-high foreign exchange reserves of $702.78 billion, a manageable current account deficit of 0.6% of GDP, and increasing foreign direct investment – reflect growing global confidence in India’s long-term prospects.  (source DDNews)
• After trading flat to its open yesterday, the NIFTY 50 is doing very little again today down just -0.07%
• The Rupee has had a strong day today rising +0.20% to 85.68
• Bonds are trading sideways with the 10yr at 6.29%

CHINA: Country Wrap: FX Reserves Up Again

• China is considering doubling an investment channel local investors use to buy bonds overseas, according to people familiar with the matter, a major step in its efforts to loosen restrictions on financial flows.  Regulators in the country have held early talks about expanding the so-called Southbound Bond Connect program to as much as 1 trillion yuan ($139 billion), said the people, who asked not to be identified because the details are private. The expansion would be through an up to 500 billion yuan annual quota to non-bank financial institutions, which are currently left out of the trading link.  (source BBG)
• China's foreign exchange reserves rose 1.3 percent in April from the month before, while its gold reserves increased for the sixth consecutive month, according to official data.  China's forex holdings expanded by USD41 billion to USD3.2817 trillion as of April 30 from March 31, mainly as a result of currency exchange rates and asset price changes, the State Administration of Foreign Exchange announced yesterday.  (source Yicai)
• China's major bourses were strong with the Hang Seng leading the way with gains of +0.79%, CSI 300 up +0.74%, Shanghai Comp up +0.58% and Shenzhen rising +1.07%
• Yuan Reference Rate at 7.1534 Per USD; Estimate 7.1796
• CGB 10 yr remains at 1.64%

SOUTH KOREA: Country Wrap: Samsung Sees Profits Down on Tariffs

• Samsung Electronics on Tuesday estimated its second-quarter operating profit plunged 55.9 percent from a year earlier due to sluggish chip business and the fallout from U.S. trade policies, missing market expectations.  The world's biggest maker of memory chips expected an operating profit of 4.59 trillion won ($3.4 billion) for the quarter ending in June, sharply down from 10.44 trillion won a year earlier, according to an earnings guidance released by Samsung Electronics.  (source Korea Times)
• The Trump Tax Cuts Act, which eliminates benefits from purchasing electric vehicles, is expected to have an unprecedented profitability shock to global automakers in Korea and Japan, as well as a 25% Trump car tariff.  As the expansion of eco-friendly cars in the U.S., the world's largest demand for automobiles, has shifted to the superiority of existing internal combustion locomotives, the strategies of electric vehicle (EV) production, R&D, and expenditure expansion by Korean and Japanese companies are being completely readjusted. Toyota is considering a scenario in which a vehicle manufactured in the U.S. is finally sold for domestic use in Japan. (source MAEIL)
• The KOSPI had a slow start to the day but things improved on Trumps comments and it has gained +1.40% to be one of the best performers of the major bourses.
• The Won was the best regional performer today up +0.82% to 1,367.25
• Bonds saw a marginal steepening of the 2/10 with the KTB 10 yr at 2.85%. 

ASIA FX: USD/Asia Pairs Mostly Lower As Countries Vow To Negotiate On Trade

In South East Asia FX, USD gains, following Monday tariff announcements from US President Trump, have been pared. Countries like Thailand, Indonesia and Malaysia have signaled they will continue to negotiate and aim for lower tariff levels than those announced on Monday. Also helping sentiment was remarks from US President Trump who still appeared willing to negotiate, and that the Aug 1 deadline may still be pushed out further. 

• USD/THB sits back under 32.50 in latest dealings, down around 0.30% versus end Monday levels. The Thailand FinMin expressed some shock at the 36% tariff level announced by the US, but expressed confidence in lower levels ultimately being reached before the Aug 1 dealings. Recent highs in the pair rest at 32.65.
• USD/IDR sits at 16240/45, only up a touch versus end Monday levels. Rtrs noted there may have been intervention selling of USDs at the start of the session (to suppress NDF levels). The 1 month NDF is down 0.50% versus end Monday levels in the US, last near 16260/65. Intra-session highs from Monday were at 16345.
• USD/MYR is around 4.2380, also little changed for the session. Earlier highs were at 4.2470.
• USD/PHP is around 0.55% lower, last near 56.40. The Philippines haven't been in the US cross hairs around trade issues, so this may be helping with a modest outperformance trend today. Monday highs were at 56.705, very close to the 100-day EMA resistance point. 

UP TODAY (TIMES GMT/LOCAL) 

Date	GMT/Local	Impact	Country	Event
08/07/2025	0600/0800	**	DE	Trade Balance
08/07/2025	0645/0845	*	FR	Foreign Trade
08/07/2025	0900/1000	*	GB	Index Linked Gilt Outright Auction Result
08/07/2025	1000/0600	**	US	NFIB Small Business Optimism Index
08/07/2025	-		EU	ECB de Guindos At ECOFIN Meeting
08/07/2025	1255/0855	**	US	Redbook Retail Sales Index
08/07/2025	1400/1000	*	CA	Ivey PMI
08/07/2025	1500/1100	**	US	NY Fed Survey of Consumer Expectations
08/07/2025	1530/1130	**	US	US Treasury Auction Result for 52 Week Bill
08/07/2025	1700/1300	***	US	US Note 03 Year Treasury Auction Result
08/07/2025	1900/1500	*	US	Consumer Credit
09/07/2025	-		NZ	Reserve Bank of New Zealand Meeting
09/07/2025	0130/0930	***	CN	CPI
09/07/2025	0130/0930	***	CN	Producer Price Index
09/07/2025	0200/1400	***	NZ	RBNZ official cash rate decision
09/07/2025	0900/1000	**	GB	Gilt Outright Auction Result
09/07/2025	0930/1030		GB	BOE Financial Stability Report
09/07/2025	1000/1100		GB	BOE FSR Press Conference
09/07/2025	1045/1245		EU	ECB Lane At House of the Euro
09/07/2025	1100/0700	**	US	MBA Weekly Applications Index
09/07/2025	1100/1300		EU	EC De Guindos Closing Remarks At Conference