Jul 02 ,2025
Synopsis:
Asia equities poised for a sluggish open Thursday. Futures in Japan and Australia were moderately softer, while Hong Kong traded unchanged. Japan ADRs were mostly higher, while Nasdaq Golden Dragon China index edged up 0.06%. US futures steady after S&P and Nasdaq extended record highs. Tech optimism was a notable tailwind with SOX index up 1.88%. US Big Tech mixed, but sharp gains in Tesla (TSLA), Apple (AAPL) and Nvidia (NVDA) buoyed sentiment. Treasuries were weaker with curve steepening; long-end yields up 4-5bp. Dollar index was flat though greenback was notably stronger vs sterling amid latest UK political uncertainties. Gold finished up 0.3%. Bitcoin futures were up 4.0%, back above $110K. WTI crude finished up 3.1%.
Better risk appetite was mainly attributed to Mag 7 leadership combined with Trump's announcement of a trade deal with Vietnam. Upcoming US employment report remains the main focus of the week. Consensus looks for headline growth to slip to 115K from prior 137K (with previews flagging downside risks) and unemployment rate seen ticking up to 4.3%. Unexpectedly negative ADP private payrolls received some attention ahead of tomorrow's nonfarm payrolls report where previews have noted downside risks, though weak ADP didn't do much to add to Fed rate cut bets. Selloff in Gilts triggered by uncertainty over Chancellor Reeves future added to overhang from Big Beautiful Bill fiscal implications as sources of bond market vulnerability.
According to Trump, Vietnam trade deal settled on a 20% tariff with a 40% level for transshipments. Compares with original reciprocal levy of 46% announced in April. Agreement adds to UK, China, which have supported market sentiment though recent discussions noted the spate of deals promised by 9-Jul looks unlikely to be realized, while Trump said he wasn't considering an extension. India continues to be mentioned among the next deals though details remain scarce. Japan now scrambling after Trump's suggestion he may apply a tariff rate of 30% or 35%, seemingly forcing a shift in strategy to minimize US levies after longstanding demands for exemptions failed. Japan policy now complicated by the official start of upper house election campaigning today with the ruling coalition in danger of losing majority control.
Pre-open Company News:
3563.JP -- Food & Life Companies reports June same-store sales +14.5% y/y
543596.IN -- Tamilnad Mercantile Bank reports provisional gross advances as at 30-Jun INR451.20B vs year-ago INR408.53B
543498.IN -- Motherson Sumi Wiring India appoints Mr. Gulshan as CFO, effective today
601228.CH -- Guangzhou Port reports June container throughput 2.3M TEUs, +7.0% y/y
600098.CH -- Guangzhou Development has received CNY1.37B in compensation for returning nine land plots to Guangzhou government
500493.IN -- Bharat Forge completes acquisition of AAM India Manufacturing at INR7.46B equity value; deal announced 17-Oct
600062.CH -- China Resources Double-Crane Pharmaceutical obtains NMPA clinical trial approval for J002
7581.JP -- Saizeriya reports June existing store net sales +11.3% y/y
600066.CH -- Yutong Bus reports June vehicle sales 5,919 units vs year-ago 4,743 units
Hong Kong stock connect daily turnover
500049.IN -- Bharat Electronics initiated buy at Asian Markets Securities
688506.CH -- Sichuan Biokin Pharmaceutical's phase III clinical trial of iza-bren for treatment of nasopharyngeal carcinoma meets primary endpoint
500086.IN -- Exide Industries releases FY24-25 sustainability report
On Deck:
Japan:
Earnings:
Kewpie (2809.JP), Kasumigaseki Capital (3498.JP), Kusuri No Aoki Holdings (3549.JP), Onward Holdings (8016.JP)
Australia:
Economic:
11:30 AEST: Trade Balance on Goods; consensus +A$5B
Market Data:
Gold (Aug 25): +$1.60 or +0.05% to $3361.30
WTI Crude (Aug 25): ($0.19) or (0.28%) to $67.26
$-¥: +0.15 or +0.10% to 143.5560
$-KRW: (5.53) or (0.41%) to 1350.8700
A$-$: +0.00 or +0.01% to 0.6583
$-INR: +0.09 or +0.11% to 85.6940
$-CNY: (0.00) or (0.01%) to 7.1644
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