ASIA STOCKS: Most Regional Bourses Higher, Thailand Up Over 2%
Regional Asia Pac equity indices are mostly higher in the first part of Thursday trade. Firmer trends are evident in South East Asia (SEA) at the moment, with Thailand the standout, up close to 2.4% at this stage. US equity futures are down modestly, while EU futures are faring better. US cash trade on Wednesday saw sentiment whipped around by headlines/stories on Trump firing Fed Chair Powell (which was later denied, but is still a possibility).
- Hong Kong markets sit up a touch at the break, the HSI near 24535, still close to recent highs. The CSI 300 is up 0.31%, near 4020, so within recent ranges.
- Japan markets are modestly higher at this stage, the Topix +0.50%. USD/JPY is recovering from Wednesday's dip, while the authorities issued fresh verbal jawboning on FX markets. June trade data showed export growth stayed negative as shipments to the US fell.
- The Kospi and Taiex are little changed so far. TSMC earnings will be in focus for Taiwan and the broader AI/tech space.
- In SEA, Thailand stocks are up strongly, the SET around 1185, which is fresh highs back to May. A move above 1200 could be targeted. THB is outperforming in the FX space as well. Direct catalysts don't appear apparent. Less offshore selling pressures have been evident in Thailand markets so far in July, a potential positive.
- Indonesian stocks are up as well, last +1.20%, putting the JCI at fresh highs since January of this year. Australia's market is up around 0.65%, with earlier jobs data firmed RBA easing odds for August.
- The Philippines benchmark is down 0.65%, bucking positive trends seen elsewhere in SEA.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUD: Asia Wrap - Finds Support On Dip Back To 0.6500
The AUD/USD has had a range of 0.6503 - 0.6536 in the Asia- Pac session, it is currently trading around 0.6530. The AUD tried lower initially as Trump told Tehran to evacuate, later headlines proposing talking between the US and Iran saw it bounce off the 0.6500 area.
- "WHITE HOUSE DISCUSSING WITH IRAN POSSIBILITY OF MEETING BETWEEN U.S. ENVOY STEVE WITKOFF AND IRANIAN FOREIGN MINISTER ABBAS ARAGHCHI, TRUMP TEAM PROPOSES IRAN TALKS THIS WEEK ON NUCLEAR DEAL, CEASEFIRE - AXIOS" - RTRS
- The AUD saw good demand sub 0.6500 and is back to testing the 0.6550 area.
- Price remains in the 0.6350 - 0.6550 range for now, a sustained break above 0.6550/0.6600 is needed for the move higher to accelerate. The way the USD is trading across the board points to this being tested at some point.
- Expect buyers to continue to be around on dips while the support in the AUD/USD holds, a close back below 0.6350 is needed to challenge the newly formed uptrend.
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.6600(AUD 1.1b June 19)
- CFTC Data shows Asset managers maintaining their shorts, the Leveraged community though continued to build up their shorts again.
AUD/JPY - Today's range 94.18 - 94.66, it is trading currently around 94.50. Choppy price action as the pair establishes a range between 92.00 - 96.00. A break back below 91.50/92.00 is needed to see the move lower regain momentum and the focus turn back to the year's lows again.
Fig 1: AUD/JPY spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
US TSYS: Yields Drift Lower
The TYU5 range has been 110-15+ to 110.23 during the Asia-Pacific session. It last changed hands at 110-20, up 0-05 from the previous close.
- The US 2-year yield moved lower; it is trading around 3.948%, down 0.02 from its close.
- The US 10-year yield moved lower, it is trading around 4.43%, down 0.02 from its close.
- "WHITE HOUSE DISCUSSING WITH IRAN POSSIBILITY OF MEETING BETWEEN U.S. ENVOY STEVE WITKOFF AND IRANIAN FOREIGN MINISTER ABBAS ARAGHCHI, TRUMP TEAM PROPOSES IRAN TALKS THIS WEEK ON NUCLEAR DEAL, CEASEFIRE - AXIOS" - RTRS
- US President Trump has posted on Truth Social, stating that Iran should have signed the deal he told them to sign, while also re-iterating that Iran cannot have a nuclear weapon. He also noted that everyone should evacuate Tehran immediately.
- The 10-year yield has bounced strongly off its 4.30/35% support, this area needs to hold if yields are to move higher. The range looks to be 4.30% - 4.60% for now a break either side would provide a clearer direction. It seems traders for the moment are more concerned with the move in oil and the implications it has for inflation and the FOMC this week than buying treasuries as a safe haven.
- Data/Events: Retail Sales, Industrial Production, Business Inventories, NAHB Housing Market Index
BOJ: On Hold As Expected, Pace Of Bond Taper Slows
The BoJ kept rates at 0.50%, as widely expected. That decision from the central bank board was unanimous. The bond buying program is unchanged through to end March 2026. The central bank did announce that it would trim bond buying by ¥200bn/per quarter from April 2026 next year. The current pace had been at a reduction of ¥400bn per quarter. There was one dissenter to this decision, board member Tamura, who wanted to keep the pace around ¥400bn. He also argued that long term rates should be determined by the market.
- The BoJ said it would also respond nimbly to rapid yield rises.
- Elsewhere the central bank noted the price trend is likely to meeting its goal in the second half of the outlook. A well outlined expectation from the central bank. It also reiterated that uncertainties remain extremely high.
- The market reaction has been relatively muted, with USD/JPY last near 144.75/80, close to unchanged for the session. JGB yields are a touch higher.
- The shift in bond purchases announced by the BoJ from march next year, was within the range expected by the market.
- The next focus point is Ueda's press conference, due in a little over 2.5 hours.
