World looks ahead to US-RU Fri and awaits US Gold clarification

Asia Market Update: Bessent expects trade issues “largely finished” by end-Oct; World looks ahead to US-RU Fri and awaits US gold clarification; CN Beidaihe retreat harbinger to leadership changes?; RBA rates tomorrow.

General trend

- US Treas Sec Bessent said he expects trade issues to be "largely finished by end of October". On a Japanese market holiday today, Bessent also urged Japan to consume more and rely less on exports.

- Bessent also leveled some stiff criticism at Fed Chair Powell, calling for the next Chair to have "a head attuned to forward thinking and who can examine the whole organization", as the Fed's mission (to date) has included "so many things outside of monetary policy and has put its independence at risk." Bessent also affirmed policies to keep USD the global reserve currency.

- Two days prior to the official end date of the 90-day trade extension in Geneva between US and China (Aug 12th), Pres Trump posted that China is short of soybeans, and he hopes that China will quickly ‘quadruple’ its US soybean orders. Adds further grist to the markets’ belief that there will be a further 90 day extension, in addition to Bessent's comments [above].

- However, some analysts remain concerned about the risk of higher US reciprocal tariffs on China from the current 10% up to 20-25% unless China agrees to what are being referred to as “FIRE” concessions (Fentanyl crackdown, US Imports, Rare Earths supply and Market Entry).

- With the Nikkei closed, Asian equities were mildly higher in overall quiet trading. Australia ASX ticked higher to another fresh high, with Resources +1.3%.

- Rumble confirmed its intent to acquire AI company Northern Data with ND holders to hold about 33% of Rumble. Ruble said deal would transform the company into an AI cloud leader. [Would also lead Tether as ND’s largest holder becoming a customer of Rumble, with a multi-year commitment to purchase GPUs.

- Waiting for the White House to clarify its Friday Executive Order about tariffing of gold bars and other specialty products. Gold -1.1%.

- US Pres Trump will be aiming to one-up last Friday’s peace brokerage ending several decades of hostilities between Armenia and Azerbaijan as US and Russia confirmed they would meet in Alaska this coming Friday, Aug 15th, to see if Trump and Putin might be able to hash out an agreement on ending the Ukraine war. Ukraine’s Zelenskiy has since doubled-down on his long held stance that he would not cede any territory to Russia. However, over the weekend reports that the White House is also considering inviting Zelenskiy, but for now only the bilateral Trump-Putin summit is on the agenda.

- China’s CPI stayed down in the doldrums for July, coming in at 0.0% for July with PPI factory prices yet again recording a now 34th consecutive month of negative reads.

- Lithium makers Tianqi Lithium +15% and Ganfeng Lithium +20% after China’s top battery maker CATL confirmed to have suspended ops at its Jianxiawo mine in the eastern Jiangxi province for at least three months. China lithium FUTs limit up 8%.

- Nvidia confirmed to have received its awaited license for exporting H20 chips to China while in separate news Nvidia and AMD said to be paying 15% of their China chip sales revenue to the US govt going forward.

- Taiwan’s July trade surplus came in handily above estimates as exports (+42%) surged at their fastest pace in 15 years.

- Japan ruling party’s plenary meeting kept PM Ishiba on as leader, for now, but in an unusual step the LDP's election committee will instead consider holding a presidential election earlier than the scheduled date of 2027.

- South Korea’s exports and imports fell in the first 10 days of August, in contrast to July's prior surge likely due to companies rushing to ship goods before the US Aug 1st trade deadline. Ship exports +81% y/y, no doubt helped by Trump Admin's call for help to South Korea for shipbuilding.

- Ether >$4,300, with its all-time high in sight (~$4,878) as Wall St and other crypto treasury holding companies begin to build out apps on the Ethereum platform as they begin to transition from fiat to on-chain transactions. [Note: Ethereum to date is the leading platform to build DeFi apps upon. Solana in second place can be faster and cheaper, but of crucial importance for custodial funds of other people’s money is down-time, platform size and trust. Ethereum’s blockchain has not experienced any downtime since its 2015 launch, is the largest app platform and Ethereum is perceived to have a more robust trust layer].

- Bitcoin also +3% to burst back above $122K, nearing the all-time high set in July.

- RBA rate decision tomorrow, with a 25bps cut fully priced in. [**Reminder that the RBA left rates on hold on July 9th after having been expected to cut 25bps].

Note on China politics: Unofficial reports from the CCP’s annual “informal” summer meeting in Beidaihe indicate that the this year is consumed with intense leadership struggles behind the scenes, with Pres Xi’s faction trying to win over the support of other factions under the guise of continued “stability”. At the other end of the political spectrum is head of the PLA, General Zhang Youxia, fighting to shore up support within the military and reportedly highly opposed to Xi continuing as leader – perhaps in an act of self-preservation as much as anything else. Recent photos purportedly show several high ranking military officials that were previously disciplined by Xi now back dining in prominent positions at CCP banquets.

- An internal power struggle gels with the relative lack of significant political news out of China these days, along with much more muted criticism against various US power moves around the globe in recent months under Pres Trump, compared to the almost daily and overt criticism of the USA just a year or two ago. All eyes on Sept 3rd Victory Day parade to confirm if Pres Xi still personally inspects the troops, followed by October’s Fourth Plenary Session of the 20th Central Committee to spot any leadership changes.

- US equity FUTs +0.1% during Asian trading.

Holidays in Asia this week

- Mon Aug 11th Japan.

- Tue Aug 12th Thailand.

- Fri Aug 15th India, South Korea.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 8,817.

- RBNZ may cancel >140 roles as part of organizational change; cites RBNZ spokesperson; The central bank had 660 total roles as of Jan - Local press.

China/Hong Kong

- Hang Seng opens +0.4% at 24,946; Shanghai Composite opens flat at 3,637.

- Policy makers in China are expected to prioritize the strengthening of equity market stabilization tools during H2 [inline] - China Securities Journal [update].

- Beijing [local government] eased rules related to home purchases – update.

- Nvidia and AMD to pay 15% of China chip sale revenues to the US - FT.

- NVDA Just recently received a license for exporting H20 chips to China, follow CEO Haung's visit to the White House – FT [weekend update].

- CHINA JULY CPI Y/Y: 0.0% V 0.1% PRIOR; PPI Y/Y: -3.6% v -3.3%e (34th month of negative readings) [weekend update].

Japan

- Nikkei 225 closed for holiday.

- Follow Up: Japan ruling party LDP's plenary meeting on Fri, Aug 8th kept PM Ishiba on as leader, for now - press (update).

- US Treas Sec Bessent urged Japan to consume more, rely less on exports.

Korea

- Kospi opens +0.3% at 3,220.

- South Korea Aug 1-10 Exports Y/Y: -4.3% v 9.5% prior; Imports Y/Y: -13.6% v 1.8% prior.

- Hynix Exec: Custom HBM market for AI to be 'Tens of billions of dollars", growing at 30% per year through 2030 - financial press. [Hynix stock +3.4%.

Other Asia

- Taiwan July Trade Balance: $14.3B v $11.1Be; Exports surged at fastest pace in 15 years [weekend update].

North America

- (US) Pres Trump: China worried about soybean shortage; Hopes China will quickly quadruple soybean orders from the US. - Truth Social post.

- OpenAI said to face 'backlash' for retiring older models with the GPT-5 launch; GPT-5 has also received lukewarm reviews, at best.

- (US) Fed's Bowman (voter, dovish dissenter): Still support three 25 bps cuts this year; Upside risks to price stability have diminished [weekend update].

Europe

- (UR) Reportedly White House is considering inviting Ukraine Pres Zelenskiy to the Alaska summit; Trump is open to a trilateral meeting in Alaska, but for now White House plans a bilateral summit as requested by Putin – press [weekend update].

Levels as of 01:20 ET

- Nikkei 225 closed, ASX 200 +0.3%, Hang Seng +0.1%; Shanghai Composite +0.4%; Kospi +0.1%.

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

- EUR 1.1642-1.1676; JPY 147.43-147.79; AUD 0.6514-0.6529; NZD 0.5945-5961.

- Gold -1.1% at $3,441/oz; BTC +3.3% at $122.030; Crude Oil -0.37 at $63.45/bbl; Copper -0.1% at $4.4670/lb.