Global Market Reactions to Recent Economic, Corporate, and Political Developments

1

In anticipation of significant upcoming events, Asian stocks fell as investors speculate on possible sell-offs. Events include major central bank decisions, key economic data, and earnings reports from large U.S. tech companies. Stocks in Australia, South Korea, Japan, Hong Kong, and mainland China all declined, with U.S. stock futures following suit. As traders prepare for the Fed's decision on Wednesday, the dollar rose against most major currencies, with the yen near a 12-week high before the Bank of Japan's policy statement.

Analysis:

Impact on FX:Uncertainty ahead of central bank decisions could strengthen the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:Global Markets: High volatility expected.

Companies:General Market Indices

2

Since late June, traders have been buying options betting on the AUD outperforming the NZD, speculating that Australia will hike rates to curb price pressures while New Zealand may cut rates. The AUD has risen nearly 2% this month, trading above 1.11 NZD on Monday. Australia's Q2 inflation data is expected to influence this currency pair.

Analysis:

Impact on FX:Expected rate hikes could strengthen the AUD against the NZD.

FX Pair:AUD/NZD

Impact on Shares:Australian and New Zealand Markets: Currency moves may affect export and import sectors.

Companies:General Market Indices

3

Despite recent sell-offs in AI stocks, some of Asia's largest hedge funds remain confident in tech companies. Dymon Asia Capital and FengHe Fund Management achieved returns of 12.4% and 11.3% respectively in H1. CloudAlpha Capital Management's Singularity Tech Fund gained 28%. While Chinese market performance was poor, the Eurekahedge Greater China Hedge Fund Index rose less than 1%, and the Eurekahedge Asia Hedge Fund Index increased by 4.6% in H1.

Analysis:

Impact on FX:Strong hedge fund performance could strengthen the SGD and HKD.

FX Pair:USD/SGD, USD/HKD, USD/CNY

Impact on Shares:Asian Markets: Positive impact on tech stocks.

Companies:General Market Indices, Dymon Asia Capital, FengHe Fund Management, CloudAlpha Capital Management

4

In Hong Kong, some wealthy families are forced to sell luxury homes and properties at discounted prices to repay debts amid a real estate market slump. The Ho family sold seven properties in the Peak district for a total of $250 million, some at significant discounts. A family business sold its stake in the AIA Central building at a $20 million loss, while another retail family sold a shop at a 60% loss.

Analysis:

Impact on FX:Real estate market slump could weaken the HKD.

FX Pair:USD/HKD, EUR/HKD, GBP/HKD

Impact on Shares:Hong Kong Market: Negative impact on real estate and financial stocks.

Companies:Henderson Land Development (0012.HK), Sun Hung Kai Properties (0016.HK)

5

Singapore's state investment company Temasek Holdings plans to invest $30 billion in the U.S. market over the next five years. Temasek is cautious about investing in China. Temasek's North America head, Jane Atherton, said the Americas would continue to be the largest recipient of capital.

Analysis:

Impact on FX:Increased investment in the U.S. could strengthen the USD.

FX Pair:USD/SGD, USD/CNY

Impact on Shares:US Market: Positive impact on investment and financial stocks.

Companies:Temasek Holdings Pte Ltd.

6

Chinese President Xi Jinping is stepping up efforts to position himself as a mediator to end the Russia-Ukraine war, despite growing criticism from the U.S. and Europe over Beijing's support for the Kremlin's battlefield efforts. Under pressure domestically and internationally, Moscow and Kyiv are both seeking ways to end the war. Last week, China hosted its first high-level Ukrainian official since the conflict began in 2022. Chinese Foreign Minister Wang Yi told Ukrainian Foreign Minister Kuleba that peace talks were not yet mature, but both sides now show a willingness to negotiate.

Analysis:

Impact on FX:Mediation efforts could stabilize the CNY.

FX Pair:USD/CNY, EUR/CNY, GBP/CNY

Impact on Shares:Chinese Market: Positive impact on diplomatic and political stability.

Companies:General Market Indices

7

Multiple fiber optic broadband cables were cut in France amid the Paris Olympics, marking the latest attack on the country's infrastructure. While this sabotage did not affect the Olympics or Paris's communications, it was the second such incident in recent days. Earlier, a fire on a railway line disrupted trains before the opening ceremony.

Analysis:

Impact on FX:Infrastructure attacks could weaken the EUR.

FX Pair:EUR/USD, EUR/GBP, EUR/JPY

Impact on Shares:European Market: Negative impact on infrastructure and telecom stocks.

Companies:General Market Indices

8

According to an RBI statement, foreign investors will no longer freely purchase new 14-year and 30-year Indian government bonds. This change takes effect immediately. Existing Fully-Accessible Route (FAR) bonds are not affected. Non-residents will only hold part of the new debt, consistent with India's rules to protect its financial markets from hot money flows. During the pandemic, India opened most of its sovereign bond market to overseas investors, and its debt was included in the JPMorgan Emerging Market Index last month.

Analysis:

Impact on FX:Restricting bond purchases could weaken the INR.

FX Pair:USD/INR, EUR/INR, GBP/INR

Impact on Shares:Indian Market: Mixed impact depending on investor sentiment.

Companies:General Market Indices

9

Venezuelan opposition leader Maria Corina Machado claims the opposition has sufficient evidence to prove Edmundo González won Sunday's election. On Monday night, she stated that the opposition holds over 70% of voting records, showing González received 6.2 million votes, while Maduro received only 2.8 million votes.

Analysis:

Impact on FX:Political instability could weaken the VEF.

FX Pair:USD/VEF, EUR/VEF

Impact on Shares:Venezuelan Market: Negative impact on financial and political stability.

Companies:General Market Indices

10

Seth Klarman's Baupost Group decided not to invest in Bill Ackman's new American closed-end fund, which plans to price in the coming days. Ackman mentioned Baupost as a potential backer in a letter to investors last week, stating the IPO would raise $2.5 billion to $4 billion, far below the initial estimate of $25 billion.

Analysis:

Impact on FX:Reduced IPO scale could weaken the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:US Market: Mixed impact depending on IPO success.

Companies:Baupost Group, Bill Ackman's Fund

11

During her first trip to China as Prime Minister, Italy's Giorgia Meloni proposed improving trade relations between China and the EU, urging President Xi Jinping to “balance” commercial relations. Meloni emphasized Italy's role in the EU and the need for a rules-based order to ensure stability, peace, and free trade.

Analysis:

Impact on FX:Improved trade relations could strengthen the EUR and CNY.

FX Pair:EUR/USD, USD/CNY, EUR/CNY

Impact on Shares:European and Chinese Markets: Positive impact on trade-related stocks

.Companies:General Market Indices

12

Japan's BOJ plans to reduce bond purchases, focusing on 7-10 year bonds. The central bank holds two-thirds of its debt in bonds with maturities of 10 years or less, while over 10-year debt accounts for just 26%.

Analysis:

Impact on FX:Reduced bond purchases could weaken the JPY.

FX Pair:USD/JPY, EUR/JPY, GBP/JPY

Impact on Shares:Japanese Market: Mixed impact depending on bond market reaction.

Companies:General Market Indices

13

UK Chancellor Rachel Reeves announced measures to strengthen public finances, blaming the previous Conservative government for a £22 billion fiscal black hole. She suggested raising taxes in the autumn budget to balance the budget. Reeves plans to stop winter fuel payments to about 10 million pensioners, cancel planned adult social care reforms, and some transport projects.

Analysis:

Impact on FX:Fiscal tightening measures could strengthen the GBP.

FX Pair:GBP/USD, EUR/GBP

Impact on Shares:UK Market: Negative impact on public service and pension-related stocks.

Companies:General Market Indices

14

After setbacks in developing key memory chips for the AI market, Samsung Electronics is narrowing the gap with rival SK Hynix. Samsung has gained Nvidia's approval for its HBM3 chips and expects approval for the next-generation HBM3E within two to four months.

Analysis:

Impact on FX:Progress in AI chip development could strengthen the KRW.

FX Pair:USD/KRW, EUR/KRW, JPY/KRW

Impact on Shares:South Korean Market: Positive impact on technology and semiconductor stocks.

Companies:Samsung Electronics (005930.KS), SK Hynix (000660.KS)

15

U.S. Secretary of State Antony Blinken and Defense Secretary Lloyd Austin visited the Philippines ahead of the U.S. election to reaffirm the U.S.-Philippines alliance. They met with President Ferdinand Marcos and other top officials. This visit is part of President Biden's strategy to bolster diplomatic and military commitments with Asian allies. Days earlier, the U.S., Japan, and South Korea signed a security cooperation agreement in Tokyo.

Analysis:

Impact on FX:Strengthened alliances could stabilize the USD.

FX Pair:USD/PHP, USD/JPY, USD/KRW

Impact on Shares:Philippines Market: Positive impact on defense and political stability.

Companies:General Market Indices