ASIA STOCKS: Most Major Bourses Post Decent Gains
Following on from yesterday's positive day, most major bourses moved higher today led by Taiwan. In Hong Kong EV stocks got a boost from news that the Ministry of Commerce will require local governments to implement trade in policies with subsidies for EVs. In Korea a strong rally from Korea Electric Power on Middle East truce wasn't enough to keep the KOSPI from dipping marginally.
- In China the Hang Seng lead the way rising +0.77% whilst the CSI 300 was up half of that at +0.35%. The Shanghai Composite is up +0.28% and +1.2% in the last five days of trading whilst the Shenzhen Comp rose +0.51%
- In Taiwan the TAIEX was one of the strongest of the major markets rising +0.95%.
- The KOSPI was one of the fallers today down -0.16% in what appeared to be little more than profit taking with limited news and the index being up over 4% in the last week.
- The FTSE Malay KLCI rose +0.42% and the Jakarta Composite went the other way falling -0.50%.
- In Singapore the FTSE Straits Times is up +0.47% and the PSEi in the Philippines is up +0.47%
- The NIFTY 50 has had a strong start to the day rising +0.60% following on from yesterday's modest gains of +0.29%
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FOREX: Asia FX Wrap - USD Struggles Across The Board
The BBDXY has had a range of 1207.08 - 1211.08 in the Asia-Pac session, it is currently trading around 1208. President Trump agrees to an extension to July 9 for Europe. https://x.com/TrumpDailyPosts/status/1926778871442972759. The EU is ready to advance talks and needs until July 9 to reach a good deal, Ursula von der Leyen said on X. https://x.com/vonderleyen/status/1926729529436913794.
- EUR/USD - Asian range 1.1363 - 1.1419, Asia is currently trading 1.1410. EUR has traded higher and remained bid throughout the Asian session. What stood out from the price action on Friday was how well the EUR held up in the face of a potential 50% increase in tariffs, and it was again the USD that took the brunt of the impact. This clearly shows the market's current outlook and leans into the growing “sell America “ theme.
- GBP/USD - Asian range 1.3524 - 1.3593, Asia is currently dealing around 1.3580. The GBP is breaking the Pivotal Weekly Resistance in the 1.3500 area, I would be weary considering it is in thin liquidity on an Asian Monday morning, with a US and European holiday. A sustained break though would signal a potential acceleration of the trend higher.
- USD/CNH - Asian range 7.1616 - 7.1824, the USD/CNY fix printed 7.1833. Asia is currently dealing around 7.1690. Sellers should be found on a bounce back towards the 7.2200 area again. Andreas Steno Larsen on x : "The elephant in the room USDCNH needs to go to 6.80 at least. https://x.com/AndreasSteno/status/1926115935200440525"
Cross asset : SPX +1.07%, Gold $3350, US TYM5 109-27 , BBDXY 1208, Crude oil $61.76
Fig 1: GBP/USD Spot Weekly Chart
Source: MNI - Market News/Bloomberg
MNI EXCLUSIVE: Insights Into UK-China Trade Relations
AUSSIE BONDS: Richer After A Subdued Session With Cash US Tsys Closed
ACGBs (YM +3.0 & XM +4.0) are stronger on a local-data-light Sydney session with cash US tsys closed for Memorial Day.
- US equity-index futures climbed in today's Asian session after President Donald Trump extended a deadline on aggressive European tariffs. Trump agreed to delay the date for a 50% tariff on goods from the European Union to July 9 from June 1.
- Analysis by Goldman Sachs shows short interest in the median S&P 500 stock – that is, the percentage of investors betting the stock will fall - has jumped to its highest reading since August 2019, according to Goldman’s US guru, David Kostin. (per BBG)
- US tsy futures (TYM5) have weakened in today's Asia-Pac dealings, with TYM5 at 109-27+, -0-07 from closing levels.
- Cash ACGBs are 3-4bps richer.
- The bills strip has bull-flattened, with pricing +1 to +5.
- RBA-dated OIS pricing is 2-6bps softer across meetings today, with early 2026 leading. A 25bp rate cut in July is given a 72% probability, with a cumulative 73bps of easing priced by year-end.
- Tomorrow, the local calendar will be empty ahead of April CPI data on Wednesday.
- The AOFM plans to sell A$400mn of the 4.25% 21 June 2034 bond tomorrow, with A$1200mn of the 4.25% 21 March 2036 bond on Friday.
