Asia Market Quick Take – 26 June, 2026

Key points:

• Macro: Headline PCE below expectations; Core PCE in line
• Equities: Apple slumped 6.1% on price hikes on Macs, iPads on higher hardware costs
• FX: Dollar stays broadly firm; yen near 40-year low
• Commodities: Oil rebounds sharply; gold holds above $4,000
• Fixed income: UST curve twist-steepened as the front end outperformed

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Disclaimer: Past performance does not indicate future performance.

Macro:

• US May 2026 PCE rose 0.4% m/m, below the 0.5% forecast, as goods inflation eased and services picked up. Core PCE increased 0.3% m/m, in line with expectations. Headline and core PCE accelerated to 4.1% and 3.4% y/y, both at multi‑month highs and above the Fed’s 2% target. The Fed lifted its 2026 PCE and core PCE forecasts to 3.6% and 3.3%.
• Real US personal spending rose 0.3% m/m in May 2026 after a flat April, driven by a 0.5% rebound in goods (notably autos and recreational goods). Services spending increased 0.2% for a second month, with gains in housing, health care, recreation, and financial services partly offset by weaker transport and food services.
• US initial jobless claims fell by 12,000 to 215,000 in the third week of June, a four-week low and below the 225,000 forecast. Continuing claims rose by 21,000 to 1.821 million in early June, a three-month high but still historically low, pointing to continued low firing and low hiring.
• US durable goods orders fell 4.5% m/m in May 2026, the biggest drop since June 2025, led by a 14% fall in transportation on a 51.8% plunge in nondefense aircraft. Ex-transport, orders rose 1.3%, and core capital goods ex‑aircraft—a proxy for business investment—rebounded 1.6%.
• US Q1 2026 GDP was revised up to 2.1% annualized from 1.6%, driven by stronger net trade and a 7.9% rise in private investment. Consumer spending was cut sharply to 0.5% from 1.4%, while government spending rose 4.4% as post‑shutdown activity resumed.
• Tokyo core-core CPI beat estimates at 1.9%, underscoring views the BoJ is behind on normalisation and pressuring JGB futures ahead of Friday’s session.

Equities: 

• US — S&P 500 ended Thursday little changed at 7,357.49 (-0.01%), marking its fourth consecutive losing session. Nasdaq Composite fell 0.46% to 23,358.60, while the Dow rose 0.14% to 51,920.62. Apple slumped 6.1% — the index's largest drag — after raising prices on Macs, iPads, home devices and the Vision Pro. Micron surged ~16% after its Q4 revenue guidance of ~$50bn shattered the $43.2bn consensus. Industrials hit a record high, led by Caterpillar, Deere and United Rentals. Jefferies fell ~9.8% after Q2 EPS missed estimates. In after-hours trade, Rocket Lab rose 4.1% after NASA selected it for three Electron launches, and Wise Group gained 5.2% after fiscal 2026 revenue came in at $2.5bn.
• EU — European equities advanced on Thursday, with the Stoxx 600 rising 0.8% to 640.21, notching a fresh record close. The DAX gained 1.0% to 24,994.83, the FTSE 100 rose 0.65% to 10,529.89, and the SMI climbed 0.8%. The standout mover was Bayer, which surged ~18.7% after a favourable US Supreme Court ruling in its Roundup herbicide litigation. 3i Group jumped ~11% after reporting accelerated like-for-like growth at discount retailer Action. ASML rose 2.6%, leading semiconductor gains on the back of Micron's blowout results. H&M fell after Q2 operating profit missed estimates, with sales in local currencies declining 3%. OVH tumbled following weak Q3 results.
• Asia — Asian equities on Thursday were led sharply higher by tech and semiconductor names following Micron's blowout results. The Nikkei 225 surged 4.6% to a record closing high of 72,366.34, driven by AI-linked stocks. The Kospi jumped 5.4%, with SK Hynix and Samsung Electronics among the top contributors. The Hang Seng Index fell 1.4% to 23,076.91 — its lowest closing level in over a year — as AI valuation concerns weighed and mainland investors sold a net HK$8.87bn via Stock Connect, the most in six weeks. The HSCEI dropped 2.0% to 7,608.38. Trip.com fell as much as 7.4% after Q1 adjusted EPS missed estimates and Q2 revenue growth guidance decelerated to 3–8%. Alibaba was the largest drag on the Hang Seng, falling 4.4%. Looking ahead to Friday's open, Nikkei futures are pointing ~785 points lower on the SGX, with Japan and Korea futures under pressure following the overnight Nasdaq decline.

FX:

• USD remains broadly firm near recent highs and is set for one of its strongest months in a year, underpinned by Fed Chair Warsh’s hawkish focus on restoring price stability and reinforced by renewed bullish dollar calls from major Wall Street banks.
• Overnight, moves in the majors were modest but mostly in the dollar’s favor, with slight gains against the AUD, CHF, JPY, CNH, and EUR, while USDCAD eased to around 1.4203 and GBP edged marginally higher versus the dollar.
• USDJPY is hovering just below 161.95 — a break above would mark the weakest yen since December 1986 — but traders are hesitant to push the pair higher given intervention risks around the 161 handle, even though the yen is still the “best” G10 performer month-to-date with a smaller loss versus the dollar than the EUR or AUD.
• MXN so rallied about 0.61% against the USD after Banxico’s hawkish hold.

Commodities:

• Oil rebounded sharply, with WTI trading above $71/bbl and Brent closing near $75 after a cargo ship was struck by a projectile in the Strait of Hormuz. The attack — coming hours after supertankers turned back from the waterway — reversed what had been a multi-session decline that had brought Brent back to pre-conflict levels near $72.48/bbl.
• Gold rebounded above $4,000/oz after briefly breaking below that level for the first time since November on Wednesday, as the softer PCE print tempered rate-hike expectations. ETFs cut ~187,440 troy ounces of gold from holdings in the prior session, with gold down ~7.4% year-to-date. Silver has lost more than half its value from its peak earlier this year, with the gold-silver ratio returning toward its historical median.
• Copper rose ~1.4% on the LME to $13,270/ton, recovering from a seven-week low hit on Wednesday, supported by dip-buying and the broader AI-driven equity rally following Micron's results. Aluminium, zinc and tin also closed higher.

  Fixed income:

• Treasuries twist-steepened, with the front-end outperforming after the softer PCE print. The 2-year yield fell ~4bps to 4.10%, while the 10-year was little changed at ~4.39% and the 30-year edged up ~1.8bps to 4.86%. The 5s30s spread widened to ~70bps from ~66bps.
• The US Treasury's $44bn 7-year note auction cleared at 4.260%, in line with the when-issued yield, indicating demand matched expectations. However, the primary dealer award of 12.8% was the highest since November, as indirect bidder participation fell to 57.6%. Separately, demand for 4-week and 8-week bill auctions was described as sluggish amid ongoing uncertainty over the Fed's rate path.
• In Europe, the 2-year German Bund yield fell 2bps to 2.53%, its lowest since late May, tracking the US front-end rally. Swaps now imply ~26bps of ECB tightening by year-end, down from ~30bps on Wednesday. Tokyo CPI data coming in above estimates is expected to weigh on short-dated JGBs in Friday's session, adding to curve-flattening pressure.

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