Asia Market Quick Take – 29 June, 2026

Asia Market Quick Take – 29 June, 2026 

Key points:  

• Macro: US and Iran halt strikes ahead of peace talks in Doha 
• Equities: Nasdaq 100 fell 1.1% on Friday as rotation out of mega-caps continue 
• FX: USD firm; EUR pressured on Fed-ECB divergence, Sintra and CPI risk 
• Commodities: Gold remains under pressure with fourth straight weekly fall 
• Fixed income: JGBs seen weaker on “appropriate” Basic Policy stance 

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Disclaimer: Past performance does not indicate future performance.  

 Macro:  

• Japan’s retail sales climbed 5.3% year-on-year in May 2026, the fastest since November 2023, beating forecasts of 3.2% and up from a revised 2.8% in April. Growth was led by autos, machinery, other goods, department stores, pharmaceuticals, and food, supported by government stimulus, while non-store retail, fuel, and clothing declined. Month-on-month, sales rose 1.9% after a 2.1% gain in April.
• China’s industrial profits rose 18.8% year-on-year to CNY 3.14 trillion in January–May 2026, slightly above the 18.2% gain in January–April, supported by AI-related investment and policy backing for advanced industries. Profits increased across ownership types and were led by strong gains in manufacturing, utilities, and mining, especially non-ferrous metals, computer and communication equipment, and chemicals. In May alone, profits grew 21.1% from a year earlier, down from April’s 24.7%.
• The University of Michigan Consumer Sentiment Index was revised up to 49.5 in June 2026 from 48.9, still below 50 but above May’s record low of 44.8. Lower gasoline prices helped sentiment, with expectations rising to 50.7 and current conditions at 47.7. Year-ahead inflation expectations eased to 4.6%, and long-run expectations fell to 3.3%.
• US and Iran agreed to halt further strikes ahead of peace talks in Doha this week, after several days of tit-for-tat attacks on commercial vessels. Shipping through the Strait of Hormuz has picked up since an interim peace deal, but many shipowners remain cautious, with hundreds of vessels still stranded in the Persian Gulf.
• Year-ahead US inflation expectations were 4.6% in June 2026, unchanged from the initial estimate and down from May’s 4.8%, but still above 3.4% in February before the Iran conflict. The five-year inflation outlook was revised down to 3.3% from 3.4%, below May’s 3.9%.

Equities:  

• US — S&P 500 closed little changed on Friday, with the equal-weighted version of the index outperforming the cap-weighted benchmark by the widest margin in six years last week, reflecting a sharp rotation out of mega-cap tech. Nasdaq 100 fell 1.1% on Friday. Micron surged on blowout earnings but gains faded quickly. Moderna jumped nearly 13% on Friday after Piper Sandler raised its price target. FedEx Freight slumped after its first post-spinoff results. Apple is lobbying the Trump administration for clearance to buy memory chips from CXMT, a black-listed Chinese company as cost of memory chips rise. S&P 500 futures are up 0.5–0.7% and Nasdaq 100 futures up 0.6–1.0% in early Asia trade on the US-Iran de-escalation news, but now lost its gains on weak Kospi and Nikkei open.
• EU — The Stoxx Europe 600 finished flat last week, hovering near record territory but unable to extend gains as AI supply chain concerns — triggered by South Korean chip headlines, Micron's guidance, and Apple's warning on higher input costs — offset relief from Brent's retreat toward $70 per barrel. Intesa Sanpaolo filed its offer document with Italian regulator Consob for its €30.6 billion voluntary tender and exchange offer for Banca Monte dei Paschi di Siena. Volkswagen reportedly faces the prospect of doubling its planned job cuts to 100,000, pending supervisory board approval. AstraZeneca reported statistically significant positive results from its Phase 3 Mulberry trial for a hypophosphatasia treatment.
• Asia — Asian markets open mixed this Monday morning. The Kospi fell approximately 2% at the open in Seoul, extending last week's sharp losses; the index plunged 5.8% on Friday (26 June) and triggered a circuit breaker earlier in the week after falling more than 8%, with SK Hynix and Samsung leading declines on AI chip demand concerns. South Korea's mega-project announcement today involving Samsung and SK could provide a sentiment catalyst. The Nikkei and Topix are modestly higher in early trade, with the Topix up around 0.6%; Digital Garage rose 6.8%. The Hang Seng is under pressure, with the MSCI AC Asia Pacific Index down 0.3%. The STI closed down 0.5% on Friday at 5,191.73, with Hongkong Land the largest decliner. Sentiment across the region is cautiously improving on the US-Iran ceasefire news, though tech-sector caution persists.

Earnings this week: 

• Monday - Prosus, Naspers
• Tuesday - Nike, Constellation Brands, Progress Software, Hagar
• Wednesday - General Mills, FactSet Research Systems
• Friday – US market closed

FX: 

• The USD stayed firm while price action in G10 FX was modest. The dominant risk this week is Thursday’s US nonfarm payrolls (brought forward for the 4 July holiday).
• EURUSD slipped 0.05% to trade near one-year lows, with major banks turning bearish and now targeting 1.10 as markets expect Fed hikes before any ECB move; focus is on the ECB Sintra forum and Wednesday’s Eurozone flash CPI. 
• USDJPY was almost unchanged at 161.80 (+0.01%), hovering just below the 2024 high at 161.95, with reduced fears of heavy-handed yen intervention. 
• AUDUSD was fractionally lower at just below 0.6900 (‑0.03%), yet remains the best G10 performer year-to-date, up 3.34% versus the USD. 
• NZDUSD was the main mover, falling 0.18% and extending its June decline toward what could be its biggest monthly drop since 2024, with some targeting 0.55 by end-July. 
• CHF dipped 0.05%, while CAD was flat to slightly firmer (+0.01%) on an oil bounce. 

Commodities: 

• Brent crude jumped as much as 1.9% to $73.39 per barrel at the Asia open after weekend tit-for-tat US-Iran strikes hit a supertanker carrying Qatari crude near the Strait of Hormuz. Gains pared after the two sides agreed to halt attacks, with Brent trading near $72.50. Iran's foreign minister asserted Iran holds exclusive authority to manage Strait of Hormuz traffic under the preliminary peace deal, keeping supply disruption risk elevated.
• Gold extended its rebound above $4,000 an ounce Friday after cooler US inflation tempered rate-hike bets, rising as much as 1.7% and building on Thursday’s gains even after a tumultuous week that drove prices to the lowest since November and a fourth straight weekly decline, the longest since August 2023. Silver climbed 2.2% to $59.15 an ounce, while platinum and palladium also advanced.
• European gas futures rose at the Asia open after tit-for-tat attacks in the Persian Gulf slowed traffic through the Strait of Hormuz over the weekend, reviving supply disruption concerns for LNG flows.

Fixed income:  

• Treasury 10-year note futures edged lower in early Asia trade, with the 10-year yield having eased 2 basis points to 4.37% on Friday. Higher oil prices from the Iran flare-up are rekindling inflation concerns and putting modest upward pressure on yields at the open.
• Japanese government bonds are expected to fall at the open after reports that the government's upcoming Basic Policy guidelines will call for only "appropriate" monetary management, seen as a signal discouraging further BOJ tightening. The Japan 2s10s curve currently sits at 121 basis points, with consensus forecasting a steepening to 123 basis points by end-Q3, with 10-year yields seen rising to 2.71%.
•  Fed Chair Warsh's hawkish pivot at the June meeting cut short a rally in emerging market bonds, with the key risk now firmly centred on the US rate path. Major bond managers including PIMCO, Capital Group, and Natixis are gravitating toward the five-year "belly" of the Treasury curve as the preferred positioning for the Warsh era.

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