Did US consumers keep spending in Jul?

Asia market update: Macro data divergence seen today, yield divergence was yesterday’s theme; Did US consumers keep spending in Jul?; TECH [HSI driven by disappointing JD.com earnings, AMAT crushed, Foxconn gains].

General trend

- JP GDP beats; BOJ rate implications?

- USD/JPY pares rise seen during NY session; 2-yr JGB yield extends rise.

- The surprise hot PPI print included headline pressures that were relatively broad-based. Food and energy prices were both much stronger than expected, with food jumping 1.4% and energy prices rising 0.9%. Importantly, the PPI components that feed into the core PCE price index were also strong.

- (US) Treasury SEC BESSENT: I did not call for fed to get to 1.5% rate; not calling for a series of rate cuts; maybe to start with 25bps cut and then accelerate [comments from NY morning].

- Fed officials dismiss ‘big’ rate cut; Markets agree? [].

- Fed’s Daly (non-voter): Large rate cut in Sept does not seem warranted; It would send unwarranted urgency signal.

- Fed's Musalem (voter): Current economy and outlook to NOT support a 50bps cut.

-USD/JPY: Note: Japan Gotobi day in focus, refers to the 5th day of the month and dates that are multiples of 5; accounts are generally settled on Gotobi days.

- Meanwhile, Jul China data terrible.

- China said to warn foreign firms against stockpiling rare earths; these foreign companies were told not to hoard rare earths – FT.

- Applied Materials [AMAT]: Reported Q3 $2.48 v $2.34e, Rev $7.30B v $7.21Be; Guided Q4 well below consensus; Q4 headwinds include digestion of China capacity, conservative assumption of zero export license approvals for a backlog of pending applications, and nonlinear demand timing from leading-edge customers. [Follow Up: The co. was sued by Beijing E-Town Semiconductor over trade secret infringement – SCMP].

- Dentsu [4324.JP]: Declines by >14.0%, following results and job cut announcement.

- Alibaba International today announced the next iteration in the evolution of its B2B search engine Accio, with the addition of the world's first AI Agent for global trade.

- Equities trade mixed: Japan rebounds, CN mixed, Korea closed.

-(US) Follow Up: President Trump said to be in bilateral program with Russia Putin at 11:00 AM local time in Alaska [on Fri] (**Reminder Aug 14th: (RU) Russia govt Aide Ushakov said: Talks in Alaska to start at 15:30ET on Aug 15th; Putin and Trump to have one-on-one meeting and hold joint news conference at the end of summit in Alaska).

Headlines/economic data

Australia/New Zealand

-ASX 200 +0.2% at 8,892.

-Australia sells A$1.0B v A$1.0B indicated in 2.75% Nov 2029 Bonds: Avg Yield: 3.4624% v 3.5512% prior ; bid-to-cover: 3.69x v 3.45x prior.

China/Hong Kong

- Hang Seng opens -0.8% at 25,322.

- Shanghai Composite opens -0.2% at 3,659.

-JD.com [9618.HK]: Declines by >3.5% after earnings.

- Shengjing Bank [2066.HK]: Halted [**Reminder Sept 6th 2022 Evergrande [3333.HK]: Said to exit Shengjing Bank in $1.1B forced sale - press].

- CHINA JULY YTD FIXED URBAN ASSETS Y/Y: 1.6% V 2.7%E [slowest growth since late 2020].

- CHINA JULY RETAIL SALES Y/Y: 3.7% V 4.6%E [matches the slowest growth since Dec].

- CHINA JULY INDUSTRIAL PRODUCTION Y/Y: 5.7% V 6.0%E [slowest growth since Nov 2024].

- China July YTD Property Investment Y/Y: -12.0% v -11.2% prior.

-China Jul New Home Prices M/M: -0.3% v -0.3% prior; Used Home Prices M/M: -0.6% v -0.6% prior.

- China July Surveyed Jobless Rate: 5.2% v 5.1%e.

- China NBS official: External environment remains complex and severe; unemployment showed uptick due to the graduation season; stepped up efforts to keep foreign trade stable - comments on Jul data.

- China considers asking firms run by central government to buy homes - US financial press.

- Shanghai to issue CNY30M coupons to support 'cultural consumption' - Chinese press.

- China local banking regulators 'curb' price wars - China Securities Journal.

- China amends regulations on the entry and exit administration of foreigners from Oct 1st; To issue K visa for foreign young scientific and tech talents - press.

- China should give additional financing support to exporters, including foreign trade cos.; cites analysts - China Securities Journal.

- (US) Pres Trump: Regarding Chinese EVs, don't like losing business to China; Chinese EVs aren't coming into US because of tariffs, don't want China to destroy US auto industry; China has batteries, we have oil & gas.

- Bridgewater Associates cut China exposure, selling $1.4B in shares during Q2; the hedge fund divested from names including Alibaba, Baidu and JD.com - Nikkei.

-HKMA and SFC have reaffirmed 'high' threshold for stablecoin issuer license applications, urges 'caution' among the public - Press [update].

- China PBOC sets Yuan reference rate: 7.1371 v 7.1337 prior.

- China PBOC Open Market Operation (OMO): Injects CNY238B in 7-day reverse repos; Net injection CNY116.0B v drain CNY32.0B prior.

- China PBoC to sell CNY500B outright in 6-month Reverse Repo on Fri, Aug 15th.

Japan

- Nikkei 225 opens +0.5% at 42,888.

- JAPAN Q2 PRELIMINARY GDP Q/Q: 0.3% V 0.1%E; GDP ANNUALIZED Q/Q: 1.0% V 0.4%E; GDP Business Spending Q/Q: 1.3% v 0.7%e.

- Japan sells ¥250B vs. ¥250B indicated in 10-Year inflation-linked JGB bonds; Yield at lowest accepted price: 0.078% v 0.0000% prior, bid-to-cover 2.92x v 3.04x prior.

- Japan sells ¥4.3T vs. ¥4.3T in 3-Month Bills; Avg Yield: 0.4340% v 0.4083% prior; bid-to-cover: 3.17x v 2.94x prior.

- Japan Chief Trade Negotiator Akazawa: US Treasury Sec Bessent is NOT asking for BOJ to hike rate.

- Japan Fin Min Kato: To accelerate 'briefing' on tariff measures to support firms; declines comment on US Treasury Sec Bessent remarks on the BOJ.

- Japan Jun Final Industrial Production M/M: 2.1% v 1.7% prelim; Y/Y: 4.4% v 4.0% prelim.

- Unrealized property gains in Japan continue to rise - Nikkei.

-Eneos [5020.JP]: Plans to use AI in order to prevent failures at refineries - Nikkei.

Korea

- Kospi closed for holiday.

Other Asia

- Foxconn [2317.TW]: Reports Q2 (NT$) Net 44.4B v 38.8Be, Rev 1.79T v 1.55T y/y; Sees AI market to continue strong demand in 2026 [Aug 14th]; Affirms FY Capex growth guidance of at least 20% y/y - Local Press.

- India PM Modi: Will NOT tolerate 'nuclear blackmail'; India macroeconomic indicators are 'strong', inflation is 'in control', FX reserves are 'strong'; - Independence Day Speech

- S&P RAISES INDIA SOVEREIGN RATING TO BBB FROM BBB- [lowest level of investment grade] (from Aug 14th].

- Indonesia President: 20M people receive nutritious meals everyday; confident GDP to grow higher in the coming period - State of the Nation Address.

-Malaysia Q2 GDP Q/Q: 2.1% v 0.7% prior; Y/Y (final): 4.4% v 4.5%e.

- Taiwan Central Bank (CBC) plans to keep urban renewal in loan calculation; relates to real estate loan concentration data - Press.

North America

- (US) July PPI final demand M/M: 0.9% V 0.2%E; Y/Y: 3.3% V 2.5%E (highest M/M print since June 2022; annual pace highest since Jan); Supercore PPI biggest M/M jump since Mar 2022.

- (US) China Global Times: US ports of Los Angeles and Long Beach set a record in Jul - update.

Levels as of 01:20 ET

- Nikkei 225 +1.6%, ASX 200 +0.6%, Hang Seng -1.1% ; Shanghai Composite +0.8%; Kospi closed.

- Equity S&P500 Futures +0.2% ; Nasdaq100 flat; DAX +0.5%; FTSE100 +0.1.

- EUR 1.1666-1.1646 ; JPY147.87-147.04 ; AUD 0.6504-0.6488 ; NZD 0.5926-0.5907.

- Gold +0.2% at $3,390 /oz; BTC -2.8% at $118,759; Crude Oil -0.4% at $63.71 /bbl; Copper -0.3% at $4.4863/lb.