Morning Bid: Dollar, tech and tariff delays fuel rotation plays
By Jamie McGeever
(Reuters) - A look at the day ahead in Asian markets.
Asian markets go into the new week on the front foot, supported by the weaker dollar, an ongoing rebound in China, and a wider switch into global assets as investors rotate out of the 'U.S. exceptionalism' trades that served them so well last year.
The main calendar event is fourth-quarter GDP data from Japan. Economists are expecting annualized growth of 1.0%, according to a Reuters poll, slightly less than the revised 1.2% expansion in July-September, with business investment making up for weak consumption.
The dollar is at a two-month low, dragged down by the delay in the Trump administration's tariff proposals actually being implemented. President Donald Trump's ultimate tariff destination may not have changed, but the journey is taking longer than many analysts had perhaps expected, and that is giving some relief to markets and weighing on the dollar.
The dollar is down four days in a row, its longest losing streak since August. Most key emerging market currencies are now up against the greenback year-to-date, apart from the Indian rupee.
Emerging and Asian assets more broadly are getting a lift. The MSCI Asia ex-Japan index has rebounded 8% in the last month, an impressive move but not a patch on Hong Kong stocks - the Hang Seng is up 20% in the last month and the Hang Seng tech index is up 30%.
Bank of America analysts note that since Trump's inauguration on January 20, shares in China's big tech 'BATX' firms - Baidu, Alibaba, Tencent and Xiaomi - are up 22%, while America's 'Magnificent Seven' are up 0%.
WisdomTree's head of equities Jeff Weniger notes that China's 'Terrific Ten' group of top tech stocks is now "crushing" the 'Magnificent Seven. How much juice is left in this move?
If DeepSeek shows that China is very much in the global AI race, this trend could continue - Chinese stocks are extremely undervalued relative to their U.S. peers, and as BofA analysts note, 'BATX' market cap is currently only $1 trillion compared with the Mag Seven's $17 trillion.
Elsewhere in the tech/AI space, Taiwan Semiconductor Manufacturing Co and Broadcom are each eyeing potential deals that would break U.S. chipmaking icon Intel in two, the Wall Street Journal reported on Saturday.
Meanwhile, fast-moving geopolitical developments around the Russia-Ukraine war are back on investors' radar. French President Emmanuel Macron will host an emergency European summit on Monday after U.S. officials suggested Europe would have no role in any talks on ending the conflict, a peace process that will seemingly be conducted between the U.S. and Russia.
Leaving aside the politics of it all, the prospect of even an imperfect peace is pushing oil and the dollar lower, and lifting European stocks. Other risk markets, like Asian and emerging assets, should benefit too.
Here are key developments that could provide more direction to Asian markets on Monday:
- Japan GDP (Q4)
- Thailand GDP (Q4)
- Indonesia trade (January)
(By Jamie McGeever, editing by Diane Craft)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
25 minutes ago
- CNBC
Elon Musk's favorability among Republicans dropped 16 points since March, Quinnipiac says
Elon Musk's official role in the Trump administration recently came to an end. Many Republicans won't be sad to see less of him, according to the results of Quinnipiac University's latest public opinion survey. While a majority of Republicans still hold a favorable view of Musk, the number fell to 62% in the poll out Wednesday, down from 78% in March, Quinnipiac said. Overall, the Quinnipiac poll found that 30% of self-identified voters surveyed in the U.S. hold a favorable opinion of Musk, according to polling from June 5 to June 9. Republican and Democratic voters remain deeply divided in their views of the world's richest man, who contributed nearly $300 million to propel President Donald Trump back to the White House. Only 3% of Democrats surveyed said they held a favorable of view of the Tesla CEO, who was once seen as an environmental leader appealing to liberal values. Musk didn't respond to a request for comment. Musk and Trump had a very public falling out last week that started with Musk's disapproval of the president's spending bill and escalated into an all-out war of words that played out on social media. Musk said on Wednesday that he regretted some of the posts he made about Trump last week, adding that "they went too far." Even with a slide in his favorability, Musk is still popular among Republicans after his time running the Department of Government Efficiency (DOGE), an effort to dramatically slash the size of the federal government. Among the Republican respondents to the early June poll, 80% rated Musk and DOGE's work as either excellent or good, while 13% said it was either not so good or poor. In the March poll, 82% of Republicans surveyed said they thought Musk and DOGE were helping the country. Read the full survey results here.
Bloomberg
29 minutes ago
- Bloomberg
Toho Titanium Shares Jump as JX Metals Mulls Unwinding
Toho Titanium Co. shares surged after parent JX Advanced Metals Corp. said it's considering ways to unwind the listing of the titanium unit as Japan's complex system of subsidiaries comes under scrutiny. JX will take full control of Toho if synergies between the two companies increase, President Yoichi Hayashi said in an interview with Bloomberg News on Wednesday. Shares of Toho jumped as much as 19%, the most since May 2022, while JX shares extended gains after the report.
Yahoo
29 minutes ago
- Yahoo
Gold Advances on Middle East Tensions and Trump's Tariff Pledge
(Bloomberg) -- Gold gained for a second day on increased tensions in the Middle East, with its haven status also supported by President Donald Trump's comments that he will inform trading partners on tariff rates within two weeks. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban NY Long Island Rail Service Resumes After Grand Central Fire NYC Mayoral Candidates All Agree on Building More Housing. But Where? Bullion rose as much as 0.6% to around $3,373 an ounce, extending a 1% gain from the earlier session when it was also boosted by a declining dollar. Buying interest increased after the US ordered some embassy staff to depart Baghdad and allowed military families to leave the Middle East, after Iran threatened to attack US bases if talks over its nuclear program fell through. Separately, Trump said he intended to send letters to trading partners in the next one to two weeks setting unilateral tariff rates, ahead of a July 9 deadline to reimpose higher duties on dozens of economies. The president also said a trade framework with China has been completed, with levies between the two largest economies to be maintained at their current levels. Uncertainties over global trade tensions and heightened geopolitical risks have rattled markets this year, boosting gold's allure as a store of value in turbulent times and powering a year-to-date advance of 28%. The precious metal, which reached an all-time high in April, has also been supported by increased central-bank buying. Spot gold was up 0.3% to $3,364.43 as of 7:59 a.m. Singapore time. The Bloomberg Dollar Spot Index was steady after falling 0.4% on Wednesday. Silver, platinum and palladium all gained. New Grads Join Worst Entry-Level Job Market in Years The Spying Scandal Rocking the World of HR Software American Mid: Hampton Inn's Good-Enough Formula for World Domination The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again ©2025 Bloomberg L.P.
