Asia Market Quick Take – 17 July, 2026

Key points:

• Macro: US jobless claims beat forecasts; retail sales slow but remain broadly resilient
• Equities: Netflix plunges nearly 9% on weak earnings; TSMC falls 2.3% despite strong beat
• FX: Risk-off mood lifts USD; GBP holds near one-year highs on optimism
• Commodities: Gold is under selling pressure falling below $4,000
• Fixed income: Fed hike bets unwind; markets price one or none by mid-2027

------------------------------------------------------------------

Disclaimer: Past performance does not indicate future performance.

Macro:

• US retail sales rose 0.2% month-on-month in June 2026, the smallest gain in five months, in line with forecasts and after a revised 1% rise in May. Excluding gasoline, sales were up 0.7%, and the core control group (excluding food services, autos, building materials, and gasoline) rose 0.5%.
• US pending home sales fell 5.4% month-on-month in June 2026, the sharpest drop since December 2025 and well below the expected 0.5% decline. Contract signings fell in all regions. Year-on-year, pending sales were down 0.3%, as high mortgage rates and record prices hurt affordability, though a strong labor market remains supportive.
• The US–Iran conflict intensified as the US carried out a fifth consecutive day of strikes on Thursday, with an oil tanker hit near Iran’s main export terminal. The incident disrupted traffic through the Strait of Hormuz and pushed geopolitical risk premiums higher across markets.
• The Philadelphia Fed Manufacturing Index rose to 41.4 in July 2026 from 10.3 in June, far above the 13 expected and the highest since November 2021. New orders and shipments strengthened sharply, employment and the workweek improved, and price indexes signaled ongoing cost and selling price increases, while firms stayed optimistic about the outlook.
• The average 30-year fixed mortgage rate rose 6 bps to 6.55% as of July 16, 2026, the third straight weekly increase, according to Freddie Mac. Purchase demand has softened and pending home sales fell in June as high rates weighed on buyers, while markets still expect at least one more Fed rate hike by end-2026.
• US jobless claims fell by 8,000 to 208,000 in the week to July 11, the lowest in over two months and below expectations of 217,000. Continuing claims dropped by 16,000 to 1.805 million, also under forecasts, signaling a still-robust labor market.
• UK manufacturing output rose 0.1% month-on-month in May 2026, defying expectations for a 0.2% fall. Growth in machinery, electronics, electrical equipment, and chemicals offset declines in metals and rubber/plastics. Year-on-year, output was up 2.3%, the fastest since March 2024.
• UK GDP grew 0.1% month-on-month in May 2026, in line with forecasts and reversing April’s 0.1% drop. Services rose 0.3%, offsetting declines in production and construction. Over the three months to May, GDP increased 0.7%, and was 1.3% higher year-on-year, the strongest annual growth since July 2025.

Equities: 

• US - US stock futures ticked lower Friday after major indexes fell Thursday, led by a broad selloff in semiconductor stocks. Netflix sank nearly 9% after disappointing earnings, adding to concerns over slowing engagement and competition. The Nasdaq slid 1.4%, the S&P 500 0.51%, and the Dow 0.2%, as investors questioned rich AI-chip valuations. Micron and AMD dropped over 5%, SanDisk over 12%, Broadcom about 5%, and US-listed SK Hynix more than 13%. TSMC beat Q2 revenue and lifted its 2026 growth outlook to slightly above 40% (from 30%-plus) while raising capex guidance to $60–64B to meet AI demand, yet its ADRs fell 2.3%. UnitedHealth beat estimates, raised EPS guidance, and shed its last sell rating, while GE Aerospace lifted guidance but fell 6.2% on profit‑taking after strong YTD gains.
• Europe - DAX 40 fell about 0.3% to 24,915.5 on Thursday, extending prior losses as investors digested earnings and lingering Middle East tensions, including reports President Trump may expand military action against Iran. Tech stocks lagged, with Infineon down 4.2% and Siemens Energy 2.3%, while Symrise, GEA Group, Beiersdorf and Henkel gained 1.5%–1.9%. Delivery Hero confirmed a merger deal with Uber valuing it at nearly €13 billion.
• Asia - Asian equities tumbled Thursday as semiconductor stocks sold off. South Korea’s Kospi slid up to 7.6%, led by SK Hynix and Samsung, before Friday’s holiday closure. Japan’s Nikkei 225 fell about 3%, with futures signaling further losses and chipmakers like Kioxia eyed as proxy hedges. Hang Seng futures also pointed lower. Seven & i Holdings gained 4.6% on reports of talks to buy a stake in Poland’s Zabka Group, while Thai stocks remained regional standouts, up 30% year-to-date on political stabilization hopes.

FX:

• USD strengthened modestly, with the Bloomberg Dollar Spot Index up 0.2% on the day (still ~0.2% lower on the week) as risk-off sentiment followed US strikes against Iran, including an attack on an oil tanker near a key export terminal.
• Haven demand supported both the USD and the CHF, with USDCHF rising 0.45% to 0.8090 and USDJPY up 0.12% to 162.39.
• USDJPY is trapped in a tight 162.00–162.80 range, with options interest concentrated around the 162 strike and persistent yen weakness heightening expectations of potential Tokyo action.
• GBP trades near a one-year high on hopes of a market-friendly UK Chancellor, driving a notable short-covering rally.
• AUDUSD is consolidating just below a three-week high around 0.70, supported by softer US inflation data, while AUDNZD tests key support near 1.1950 amid a more hawkish RBNZ outlook.

Commodities:

• WTI settled just under $79/bbl and Brent closed near $84/bbl on Thursday, both up approximately 11% on the week — the largest weekly gain in months. The US launched its fifth consecutive day of strikes on Iran, hitting an oil tanker near Iran's main export terminal and sharply curtailing Strait of Hormuz traffic. The 3-2-1 crack spread set a fresh record, rising as high as $70/bbl, and US retail diesel prices rose back above $5/gallon.
• Bullion has retreated from its highs, with reports earlier this week noting gold sank below $4,000/oz as the prospect of higher interest rates and a firmer dollar weighed on the metal. Gold was little changed in early Asian trade on Friday.
• Top-20 SHFE brokers cut net-short copper positions to 23,076 contracts as of Thursday, with net-long positions building in the most active August contract. LME copper cash-to-3-month spreads have been widening modestly through the week, reflecting tightening near-term supply conditions.

Fixed income:

• Yields were broadly steady on Thursday, with the 10-year rising just 1.4bps to 4.565% and the 30-year up 1.1bps to 5.093%. Cash Treasuries closed slightly lower across the curve as traders balanced profit-taking following this week's rally with concerns about Middle East oil-supply disruptions. Treasury futures edged higher in early Asian trade Friday as oil prices dipped.
• Following two consecutive benign inflation prints, SOFR options markets are dominated by put-selling as traders exit positions positioned for at least one Fed hike this year. Markets now price just one hike or none by mid-2027, a significant repricing from earlier in the quarter. Treasury bill auctions saw strong demand, with 8-week bills preferred for the second straight week.
• Investment-grade bond funds recorded their 14th consecutive week of inflows (short and intermediate IG: $2.48bn inflow for the week ending July 15), while high-yield flipped to its first outflow since late May ($404.7m outflow). Municipal bonds extended their selloff, with 10-year muni yields rising 4bps to 3.06%, the highest since May 22, playing catch-up to the recent Treasury move.

For a global look at markets – go to Inspiration.

This content is marketing content and should not be considered investment advice. Trading financial instruments carries risks and historic performance is not a guarantee for future performance.
The instrument(s) mentioned in this content may be issued by a partner, from which Saxo receives promotion, payment or retrocessions. While Saxo receives compensation from these partnerships, all content is conducted with the intention of providing clients with valuable options and information.