ASIA STOCKS: Taiwan Inflows Buoyant Amid Tech Optimism, Outflows In India & SEA

A decision will be made at the July 8 RBA monetary policy meeting on the publication of anonymous votes. According to a government spokesperson quoted by Bloomberg, Governor Bullocks met with Treasurer Chalmers last week to finalise the Conduct of Monetary Policy. The view of both the RBA and Treasury is that votes should be published when a consensus agreement on rates wasn’t achieved but without attribution, similar to the RBNZ. A number of recommendations from the review of the RBA have been implemented including establishing two boards, one for monetary policy and one for governance, post-meeting press conferences and fewer meetings.

Gold prices rose 1.4% on Friday to $3432.21/oz off the intraday high of $3446.81 driven by safe haven flows following Israel’s attack on Iranian nuclear sites. During today’s APAC session it is up 0.4% to around $3445.5 after reaching $3451.31 as hostilities continued over the weekend with Iranian strikes on Israel and the latter targeting Iranian oil and gas infrastructure. 

• The USD index rose 0.2% and is up 0.1% so far today with yields higher, which is likely dampening the rally in bullion. It had found support from increased Fed rate cut expectations following lower-than-expected May US CPI.
• Israel struck the Shahran fuel depot and Shahr Rey refinery in Tehran destroying both but has avoided the Kharg Island terminal so far which is Iran’s main oil export facility. Israel struck Iran’s Fajr Jam Gas Refinery and South Pars gas field, which is one of the largest in the world.
• Recent gains reinforce the bullish trend with the bull trigger at $3500.1. Moving average studies are in a bull mode and highlight a dominant uptrend.
• Equities fell on Friday with the S&P down 1.1% and Euro stoxx -1.3% but the S&P e-mini is currently up 0.1%. Oil prices rose sharply with WTI +7.6% to $73.18 and are currently +1.6% to $74.08. Copper fell 1.7% on Friday and is down another 0.6% today. Silver range traded and finished down 0.1% to $36.30 and is flat today.

TYU5 is trading 110-20, up 0-00+ from its close. 

• The US 2-year yield opens around 3.96%, up 0.01 from its close.
• The US 10-year yield opens around 4.4185%, up 0.02 from its close.
• MNI FED WATCH: Rates Steady As Tariffs Lift Inflation Forecast. Federal Reserve officials are expected to hold interest rates steady Wednesday for a fourth straight meeting and mark up their inflation and unemployment forecasts as President Trump's tariffs begin eating away at growth. Fed Chair Jerome Powell and his colleagues maintain that monetary policy is "in a good place" to wait until later in the year before deciding on any policy moves.
• “Crude is likely to open sharply higher after Israeli strikes on Iranian energy infrastructure force markets to reassess geopolitical risk. While the attacks have spared export routes so far, the targeting of South Pars, Iran’s largest gas facility, can raise concerns about energy security and supply, and that’s likely to push more risk premium into prices at the open.”(BBG)
• The 10-year yield has bounced strongly off its 4.30/35% support, this area needs to hold if yields are to move higher. A sustained break back below 4.30% and you would think more shorts will be pared back potentially putting a short-term top in place. It seems traders for the moment are more concerned with the move in oil and the implications it has for inflation than buying treasuries as a safe haven.
• Data/Events: Empire Manufacturing