Markets still waiting for word out of US-CN trade talks in London

Asia market update: Markets still waiting for word out of US-CN trade talks in London, though Round 2 of talks confirmed for today (Tues).

General trend

- Risk assets kept moving up, even as markets still awaiting word out of the China-US trade talks in London. Earlier Pres Trump said only that he was hearing (from US Treasury Sec Bessent and Commerce Sec Lutnick) that talks "were going well...but not easy". ** Note: In the few minutes befor this Update's publications, FUTs lost all gains suddenly.

- USD/JPY moved back above the 145 handle after Ueda mentioned the word 'rate cuts', even though he was talking in the context of it being difficult to cut rates from only 0.5% shouhld the economy come under strong downward pressures. The market nevertheless took the mere utterance of ‘cuts’ as potentially reducing the chance of further rate hikes. Ueda also dampened the forward guidance on hikes a bit, by saying "Will hike, if...confidence of reaching 2% target increases”.

- Nasdaq FUTs kept advancing during the Asia session +0.6%, accelerating as Ueda spoke, to take out last week’s highs and advancing closer towards the Feb All-time-highs. ** Note: In the few minutes prior to this Update's publications, FUTs lost all gains suddenly.

- Asian indices were mixed with Taiwan's Taiex leading +2% and the Nikkei and ASX outperforming the majors, +0.6% while the Shanghai Composite and Hang Seng underperformed. Note: Stock indices in general lost significant gains in the minutes leading into publication of this Update.

- In other trade news, Japan Trade Negotiator Akazawa put a bit of a cloud over Japan-US negotiations saying that they were 'still in fog'', while confirming his 6th trip to the US Jun 13-18th for tariff talks. Akazawa will also visit Canada (where Japan PM Ishiba and Pres Trump are confirmed to meet on the sidelines of the G-7 meeting in Alberta, Canada).

- Australia May Business Confidence rose back into positive territory, while Jun Consumer Confidence rose slightly m/m, possibly with some enthusiasm on the back of the recent RBA rate cut on May 20th.

- After falling to nearly $100K at the end of last week, Bitcoin rallied hard back to nearly $111K, just shy of the all-time highs in May.

- Taiwan Semi May Rev due at time of publication (prior Apr Rev NT$ 349.6B).

- US equity FUTs +0.4% to +0.6% (but fell to flat or slightly negative in final few minutes of this Update) during Asian trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

- Wed Jun 11th KR unemployment, (Wed night US May CPI).

- Thu Jun 12th IN May CPI, (Thu night US May PPI).

- Fri Jun 13th NZ May PMI (Fri night US Jun Michigan Consumer Sentiment).

Holidays in Asia this week

- Mon Jun 9th Australia, Indonesia.

- Thu Jun 12th Philippines.

Headlines/economic data

Australia/New Zealand

- ASX 200 reopens +0.1% at 8,523.

- Australia May NAB Business Confidence: +2 v -1 prior.

- Australia Jun Westpac Consumer Confidence Index: 92.6 v 92.1 prior.

- Australia PM Albanese: Names Jenny Wilkinson as the new Secretary to the Treasury - Australian press, citing excerpts from speech to be delivered Tuesday.

- New Zealand Treasury: Expects the growth impulse from net exports to wane.

- New Zealand Fin Min Willis: Concerned about the RBNZ's summer break; Prefers to increase decisions made per year from 7 to 8.

China/Hong Kong

- Hang Seng opens +0.2% at 24,231; Shanghai Composite opens +0.1% at 3,402.

- China VP Han Zheng met with France Pres Macron - Chinese state media.

- US-China trade talks in London to continue tomorrow - press cites official.

- US Pres Trump: We're doing well with China, 'It's not easy;' Talks are ongoing; We'll see about lifting export controls.

- (US) White House NEC Dir Hassett: Expecting China to release minerals that US needs; US to release export controls if China talks go well; Trump teams wants a hand shake agreement today in London on releasing rare earth minerals – CNBC.

- China reportedly to raise minimum wage standard and boost fiscal support for employment, health and education – press.

- China Vice Premier: Met with UK Chancellor Reeves; said to stress sustained, sound and stable development of economic relations [overnight update].

- China PBOC sets Yuan reference rate: 7.1840 v 7.1855 prior.

- China PBOC Open Market Operation (OMO): Injects CNY199B in 7-day reverse repos; Net drains CNY256B v injects CNY174B prior.

Japan

- Nikkei 225 opens +0.5% at 38,278.

- Japan PM Ishiba, US Pres Trump said to meet in Canada [G-7 Summit to be held June 15-17th in Kananaskis, Alberta] - Japanese press.

- BOJ Gov Ueda: Has limited room to underpin growth with rate cuts with short-term rate still at 0.5%, if the economy and prices come under 'strong' downward pressure.

- Japan Trade Negotiator Akazawa; Affirms the key is if Japan-US can agree on trade package; Trade negotiations with US 'still in fog'; To visit US and Canada from Jun 13-18th for tariff talks - Nikkei.

- Japan Fin Min Kato: Will conduct appropriate fiscal policy; Confirms seeking more JGB holdings by domestic investors - financial press.

- Follow up: Japan ruling party (LDP) reported to have decided on cash handout as measure for inflation - Japanese press.

- Japan PM Ishiba: Told LDP execs to include goal of achieving ¥1,000T nominal GDP in 2040 in party's Upper House Election pledge.

- Japan Trade Negotiator Akazawa planning to visit US this week - Japanese press (in line with earlier reporting).

- Japan Govt said to be considering buying back 'some' super-long JGBs issued in the past - press citing sources.

- Japan Chamber of Commerce in China: Some rare earth exports have begun to be approved.

- Japan MOF sells ¥650B v ¥650B indicated of JGBs in liquidity enhancement auction; bid-to-cover: 2.37x v 3.06x prior.

Korea

- Kospi opens +0.6% at 2,872.

- South Korea Apr Current Account: $5.7B v $9.1B prior.

- South Korea Pres Lee and China Pres Xi confirmed to have held phone call - China state media.

Other Asia

- Taiwan May Trade Balance: $12.6B v $6.5Be.

North America

- (AR) Argentina Central Bank (BCRA): 'Market' to determine interest rate, versus the central bank fixing a monetary policy rate - financial press.

- (US) DOJ asks Appeals Judges to extend ruling on Trump tariffs, thus allow the tariffs to remain for longer - FT.

- (MX) Mexico May CPI M/M: 0.3% v 0.2%e; Y/Y: 4.4% v 4.4%e (Moves above target range for 1st time in 5 months).

- (US) Apr final wholesale inventories M/M: 0.2% V 0.0%E.

- (CA) Canada PM Carney: Confirms Canada to increase defense spending to reach NATO target of 2% this fiscal year - comments in Toronto.

- (US) May NY Fed (NYFRB) 1-year Inflation Expectations Survey: 3.20% v 3.6% prior.

- (US) May budget balance -$314B - CBO estimate.

- (US) Pres Trump to meet with legislators regarding tax bill on Thurs (Jun 12th) - Punchbowl.

- (US) President Trump: Iran is asking for things you 'can't do'; Alternatives to a nuclear agreement are 'very, very dire'.

Europe

- (IE) Ireland May Construction PMI: 49.2 v 52.4 prior..

- (UK) May BRC Sales Like-For-Like Y/Y: 0.6% v 2.6%e (smallest rise since Nov 2024).

- (IL) Israel Central Bank (BOI) May Minutes: Decision to keep policy steady was unanimous (6-0).

- (IT) Italy referendum on immigration and labor law fails to pass - press.

- (ES) Bank of Spain Gov Escriva: Lowers 2025 GDP forecast to 2.4% from 2.7% prior.

- (EU) ECB's Holzmann (hawk/dissenter, Austria): ECB may take longer pause on rate cuts.

Levels as of 01:20 ET

- Nikkei 225 +0.6%, ASX 200 +0.7%, Hang Seng -0.6%; Shanghai Composite -0.8%; Kospi flat.

- Equity S&P500 Futures +0.4%; Nasdaq100 +0.5%; DAX flat; FTSE100 flat.

- EUR 1.1386-1.1436; JPY 144.40-145.29; AUD 0.6502-0.6530; NZD 0.6028-0.6059.

- Gold -0.7% at $3,330/oz; Crude Oil +0.2% $65.44/bbl; Copper -0.5% at $4.8793/lb.