US Fed, BoJ, BoC rates in focus, along with corp EPS incl MSFT, META, AAPL, AMZN

Asia market update: Massive Pacific earthquake and attendant tsunami warnings intercede in Asia prior to busy 24 hour data period; US Fed, BOJ, BOC rates in focus, along with corp EPS incl MSFT, META, AAPL, AMZN.

General trend

- The belly of this week brings with it a heavy 24 hours with key Mag7 earnings from Microsoft, Meta, Apple and Amazon, along with rate decisions from the US Fed, BOC and the BOJ (all expected to hold).

- However, today the 8th largest-ever recorded earthquake [8.7 magnitude - and the strongest since the 9.1 mag Tohoku earthquake and tsunami of 2011 in Japan] struck South-east of the Kamchatka Peninsula, in the Northwest Pacific region of Russian territory. Tsunami warnings were issued throughout the Pacific region, including down as far as Chile and Equador coasts, as well as Japan, US and Canadian West Coasts as well as Indonesia. Taiwan waiting for potential tsunami impact just prior to the sending of this update (05:18am GMT). China also warned of potential "disastrous impact" on its coast.

- Dozens of significant aftershocks in 5-7 mag range. Japan said to detect 30cm tsunami in Hokkaido. Various JP nuclear power utilities reporting no serious threat to operations thus far.

- Overall, the various tsunami warnings seemed to get more serious as time went by prior to making shore.

- No significant moves yet in markets from the tsunami, with wait-and-see the eventual impact appearing to be the prevailing attitude for now. Kospi outperformed +1.4% in relatively quiet trading ahead of the big data points to come.

- Outcome of the third round of China-US trade talks in Stockholm should be known later in the European day. Both sides have commented to media that the talks have been candid and in-depth, with a higher degree of rapport as relationships and understanding build. US understandably keen to keep rare earths and magnets flowing to US companies. Indications thus far from Scott Bessent that a further 90-day extension of the status quo is likely. US Pres Trump’s comment that he will probably meet with China’s Pres Xi “before the end of the year’ added further credence to an extension”. [Situation currently feels like a game of Risk, with neither side feeling like they have enough cards to slam the hammer down – in stark comparison to the EU being given short shrift treatment by both the US and China in recent trade talks with each super power].

- Decision-time for South Korea, having arrived in the US for final trade talks ahead of the Aug 1st deadline. Korea getting inventive about helping the US with building ships and non-ferrous smelters.

- Taiwan trade delegation to continue tariff negotiations in the US (with mid-July stated goal of achieving a deal by Aug 1st).

- India appears ever more likely to pay 20-25% tariffs ahead of a US deal, with Pres Trump saying the rate not yet finalized. [Meanwhile Mexico says it is aiming for a US tariff agreement by Aug 1st, while Canada still expresses hope of a deal, but seems resigned to tariffs – the question will it be the 35% level threatened by Trump on July 10th?].

- Sharp downturn for Japan trade in the first 10 days in July with Exports -2.0% and Imports -8.2%.

- Australia Q2 CPI saw the lowest inflation rate since Mar 2021 quarter, and the lowest Services annual inflation in three years. Likely to embed market expectations for the RBA to resume easing at its next meeting.

- Singapore Monetary authority (MAS) kept monetary policy and the slope of the S$NEER on hold, noting continued uncertain conditions.

- Just two days after Tesla announced a potential future entry into becoming a full stack chipmaker for its AI products via its $16.5B deal for AI6 chips to be built in its Texas backyard with Samsung, Tesla today said to be the counter party for an LG Energy contract worth KRW5.9T for the supply of lithium iron phosphate batteries for 2027-2030.

- US equity FUTs +0.1% to +0.2% during Asian trading.

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

- Wed July 30th (Wed eve EU Q2 GDP, Wed night BOC rate decision, US Q2 GDP, US Fed rate decision).

- Thu July 31st JP Jun Retail Sales + Industrial Production, AU Retail Sales, CN July PMI Manufacturing, JP BOJ rate decision, JP July Consumer Confidence, (Thu night US Jun Core PCE).

- Fri Aug 1st KR July Ex/Im + PMI, AU PPI, CN Caixin July Manufacturing PMI, (Fri eve EU July CPI, Fri night US July NFP, US July ISM PMI Manufacturing).

Holidays in Asia this week

- Mon July 28th Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 8,696.

- Australia Q2 CPI Q/Q: 0.7% V 0.8%E; Y/Y: 2.1% V 2.2%E.

- New Zealand July ANZ Business Confidence: 47.8 v 46.3 prior.

- (CA) Canada and New Zealand resolve CPTPP dairy dispute.

China/Hong Kong

- Hang Seng opens -0.7% at 25,335; Shanghai Composite opens -0.1% at 3,608.

- China alerts tsunami may have 'disastrous impact' on its coast.

- China Finance Min Lan: China will make 'good use' of more proactive fiscal policies; will continue to boost consumption.

- US Pres Trump: Will probably meet with China's Premier Xi before the end of the year.

- US Treasury Sec Bessent: Will talk with Pres Trump tomorrow on China tariff pause; Some technical details remain; Final decision up to Trump (ahead of China trade deadline of Aug 12th); Probably another China meeting in 90 days; No discussion of Trump-Xi meeting at these talks - comments to media.

- (US) White House NEC Dir Hassett: We want China buying our AI chips and don't want China to become the AI standard for chips [asked about Nvidia H20 chips].

- USTR Greer: Will make sure (China) magnets are flowing; Discussed sectoral tariffs with China; 90-day extension is one option for Pres Trump to approve - comments to media [overnight update].

- China trade negotiator Li: US-China trade talks were candid and in-depth; Both sides agreed to extend pause of reciprocal measures and China countermeasures [overnight update].

- China Vice Premier: China and US share a broad space for trade cooperation; Stability with US and China trade ties benefits the global economy [overnight update].

- China PBOC sets Yuan reference rate: 7.1441 v 7.1511 prior.

- China PBOC Open Market Operation (OMO): Injects CNY309B in 7-day reverse repos; Net injects CNY159B v injects CNY234B prior.

Japan

- Nikkei 225 opens +0.1% at 40,697.

- Japan July 1-10 Exports Y/Y: -2.0% v +1.8% prior; Imports -8.2% v +4.9% prior (provisional).

- Japan said to detect 30cm tsunami in Hokkaido - NHK.

- Japan Trade Negotiator Akazawa: Trade deal has eased uncertainty to some degree; Impact of remaining US tariffs worth paying attention - comments from Tokyo [overnight update].

Korea

- Kospi opens flat at 3,233.

- South Korea Jun Retail Sales Y/Y: 7.3% v 7.0% prior.

- South Korea and the US said to discuss building non-ferrous smelter - South Korea press.

- South Korea President Lee: Affirms to abolish unnecessary regulations for cos.; pledges to become pragmatic and market-oriented government - comments at economic meeting.

- Commerce Sec Lutnick requests South Korea to bring their best offers for trade talks – WSJ [overnight update].

Other Asia

- Indonesia tariff negotiator said deal with the US is 'far' from finalized - Nikkei [update].

- (TH) Suspended Thailand PM Shinawatra given extension by Thai Court to Aug 4th to file her defense, but 'no more extensions' to be given - financial press.

- Taiwan trade delegation to continue tariff negotiations in the US - financial press.

- Singapore Jun Unemployment Rate: 2.1% v 2.0% prior.

- Taiwan: Expects Tsunami to impact Island from 1:18 PM local time.

- (RU) GFZ: Follow up: Magnitude 8.7 earthquake strikes 126 km ese of Petropavlovsk-Kamchatka (peninsula), Russia (northwest Pacific); hazardous tsunami warning issued for coasts of Russia, Japan, Hawaii, Alaska and US West coast.

- (SG) Monetary authority of Singapore (MAS) quarterly monetary policy statement; No change to width of currency band and level at which it is centered; Slope of S$NEER band maintained.

- (IN) US Pres Trump: Confirms India may pay tariffs of 20-25%; Rate not yet finalized - comments to media.

- Philippines Central Bank (BSP) Gov Remolona: Aug rate cut is on the table.

- (TW) China Foreign Ministry: Reiterates opposes trip of any US leader to 'Taiwan province' [overnight update].

North America

- Tesla said to be the counter party to the LG Energy contract worth KRW5.9T for LFP battery supply; relates to the supply of lithium iron phosphate batteries to the unnamed client [speculated to be Tesla] for 2027-2030; financial terms not disclosed.

- (CL) Chile central bank (BCCH) cuts overnight rate target by 25bps to 4.75%; as expected; decision was unanimous.

- (US) President Trump plans to unveil health care initiative on Wed, participants are expected to include Oracle and Microsoft - US financial press.

- (MX) Mexico opens dumping investigation into exports of US epoxidized soybean oil - press.

- (US) Jun advance goods trade balance: -$86.0B V -$98.0BE.

- (US) Jun preliminary wholesale inventories M/M: +0.2% V -0.1%E.

- (US) May FHFA house price index M/M: -0.2% V -0.2%E.

- (US) May S&P corelogic house price index (20-CITY) M/M: -0.34% V -0.20%E; Y/Y: 2.79% V 2.91%E.

- (US) Jun JOLTS JOB openings: 7.437M V 7.500ME.

- (US) July consumer confidence: 97.2 V 96.0E.

- (US) Commerce Sec Lutnick: Pres Trump to announce pharma policy in two weeks; Will be 'massive tariff' if pharmaceuticals not made in the US; Will have (trade) things done by Fri (Aug 1 trade deadline) - CNBC.

- (MX) Mexico Pres Sheinbaum: We are aiming for a tariff agreement with the US this week [before the Aug 1st deadline].

- (MX) Mexico Econ Min Ebrard: 'Optimistically' awaiting Trump's decision on tariffs.

- (US) Treasury $44B 7-year note auction results: Draws 4.092% V 4.022% prior, bid-to-cover ratio: 2.79 V 2.53 prior and 2.63 over the last 12

- (UR) US Pres Trump: The new Russia deadline is 10 days from today; New tariffs may or may not impact Russia (vs 10-12 days threatened yesterday); Deadline has not yielded a response from Russia.

Europe

- (EU) ECB's Makhlouf (Ireland): Inflation in Euro-area has stabilized.

- IMF world economic outlook (WEO): Raises 2025 global gGDP growth forecast from 2.8% to 3.0%.

- (IL) UK PM Starmer's Office: PM told Cabinet that UK will recognize the state of Palestine in Sept unless Isreal takes substantive steps to resolve humanitarian situation.

Levels as of 01:20 ET

- Nikkei 225 -0.2%, ASX 200 +0.6%, Hang Seng -0.7%; Shanghai Composite +0.5%; Kospi +1.4%.

- Equity S&P500 Futures +0.1%; Nasdaq100 +0.2%; DAX +0.2%; FTSE100 flat.

- EUR 1.1546-1.1572; JPY 147.85-148.53; AUD 0.6503-0.6529; NZD 0.5952-5972.

- Gold +0.1% at $3,385/oz; BTC -0.8% at $118,030; Crude Oil +0.1% at $69.24/bbl; Copper -0.3% at $5.6485/lb.