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Asia Market Quick Take – 17 June, 2026
Key points:
- Macro: Iran to receive 300b. BoJ raises rates; RBA holds. FOMC tonight.
- Equities: Dow at record high; SpaceX extends gains nearing +50% gain since IPO
- FX: BOJ’s 25bp hike to 1%, cautious tone keep yen weak, USDJPY above 160
- Commodities: Oil near three-month lows sinking 16% over four sessions
- Fixed income: Yields fell across the curve with Fed and long-end outlook in focus
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Disclaimer: Past performance does not indicate future performance.
Macro:
- Iran is set to receive a $300b redevelopment fund as part of a 14-point draft memorandum, provided by the US and its allies. US and Iran are set to sign an interim deal in Switzerland on Friday, granting Tehran broad economic incentives and allowing immediate resumption of oil exports
- BOJ raised its policy rate to 1.0% as expected, but Deputy Governor Uchida downplayed prospects for further hikes, saying the bank will closely watch FX effects on inflation and that it is unclear how much higher rates must go.
- RBA holds the cash rate at 4.35%, saying policy is well positioned to respond to incoming data amid ongoing assessment of the outlook and risks. Board remains focused on inflation.
- US May housing starts slumped 15.4% m/m to 1.177m annualised, the weakest since 2020 and below all estimates, led by a 40.2% drop in multifamily; permits fell 0.7% to 1.413m.
- US May import prices rose 1.9% m/m (6.7% y/y) and export prices 1.3% m/m (11.2% y/y), all above consensus.
- Markets are also focused on the Fed meeting, where rates are expected to be kept on hold in Kevin Warsh’s first meeting as chair; he is not expected to submit a dot to the projections.
Equities:
- US — S&P 500 fell 0.6% to 7,511 on Tuesday as chipmakers took a breather after a strong run, with the Philadelphia Semiconductor Index dropping 5.7% — its worst session since June 5. The Nasdaq 100 declined 1.9% and the Nasdaq Composite fell 1.15%, snapping a three-day winning streak. Dow Jones Industrial Average bucked the trend, rising 0.6% to a fresh all-time high. Nvidia fell 2.4%, Microsoft dropped 1.5%, and Cboe Global Markets was the largest single-stock decliner at -9.5%. SpaceX surged another 4.8%, approaching a near-50% gain since its IPO debut. Financials outperformed, rising 1.5%, with JPMorgan gaining 3.7%. Lionsgate Studios closed 14% higher at a record. In after-hours trading, La-Z-Boy surged 15% after adjusted EPS of $1.26 beat the $0.82 estimate by a wide margin. AT&T slipped 1.3% after naming a new CFO effective January 2027.
- EU — European equities edged higher for a fourth consecutive session on Tuesday, with the Stoxx Europe 600 rising 0.2% and the Euro Stoxx 50 gaining 0.45% to a fresh record close. The FTSE 100 advanced 0.6% to 10,494, led by HSBC (+1.8%). The DAX was little changed at 24,910. Banks were the top-performing sector, closing at a fresh 2008 high, with UniCredit surging 4.2% after BofA named it a new top pick and raised its price target to a new Street high. Ericsson fell 3.4% after announcing the departure of longtime CEO Börje Ekholm, effective October 1. Tech was the worst-performing sector on the Stoxx 600, falling 1.7%, with STMicroelectronics adding to pressure via a convertible bond offering.
- Asia — Asian markets were mixed on Tuesday. The Nikkei 225 closed at a record high, briefly touching 70,000, after the BOJ rate hike boosted sentiment. The Kospi outperformed the region, rising 2.1% to 8,726, led by SK Hynix (+4.1%), as the memory chip cycle continues to drive North Asian markets. The Hang Seng Index fell 1.4% to 24,494, with Tencent declining 2.7% and Longfor Group dropping 8.9% as the largest single-stock decliner. The Hang Seng China Enterprises Index fell 1.6% to 8,240 after China's weak retail sales data disappointed. The CSI 300 declined 0.2%. Mainland investors continued to buy Hong Kong equities via Stock Connect, purchasing a net HK$3.46 billion. The STI was not materially moved by major single-stock events. Investors are increasingly favouring AI chipmakers listed on the mainland and in North Asian markets over Hong Kong-listed internet and consumer names.
Events this week:
- Wednesday: FOMC rate decision
- Friday: US Juneteenth holiday. China, Hong Kong and Taiwan observe Dragon Boat Festival. Markets closed.
FX:
- Overnight FX was quiet as markets awaited the first Fed decision under new Chair Kevin Warsh, with his rate guidance expected to drive USD moves. The USD stayed soft against EM currencies, and its renewed inverse correlation with US equities is leading some global investors to maintain or trim FX hedges.
- USDJPY held in a narrow range and closed around 160.43 after a well-telegraphed 25bp BOJ hike to 1% failed to spark lasting yen strength. Uchida’s cautious tone—signalling a slow, incremental tightening path—kept carry trades attractive and USDJPY anchored above 160.
- AUDUSD closed flat around 0.7070 after the RBA held rates at 4.35% in a hawkish pause, briefly pushing the pair lower before it rebounded.
- EURUSD held firm around 1.1610, its highest close since early June, while GBPUSD at 1.3430 traded sideways ahead of the Fed.
- USDCAD hovered at 1.4000, extending a four-day run o. mild USD gains versus the loonie, USDMXN falling for a seventh straight session.
Commodities:
- Oil near three-month lows: WTI traded below $77 a barrel and Brent ended near $79, after crude sank 16% over four sessions — the longest losing run this year — on expectations that the Hormuz deal will unleash a wave of Iranian supply. Trump confirmed the Strait could reopen as early as Friday. Prices have retraced sharply from the conflict-era highs.
- Gold holds above $4,310: Bullion traded above $4,310 an ounce, having climbed 2.2% in the prior session after the US-Iran deal was announced. The World Gold Council survey showed 45% of 74 central banks plan to increase gold reserves in the coming year — the highest share on record since 2018 — underpinning structural demand. However, gold ETFs have cut holdings for six consecutive days, the longest losing streak since March 24, bringing year-to-date net sales to 1.71 million ounces.
- Aluminum edges higher, copper bulls retreat: Aluminum gained 0.3% to $3,388.50 per metric ton on the LME as investors weighed the potential return of Middle East smelters against booming Chinese output. Separately, speculative net-long positions in LME copper fell to a four-week low, with long-only positions at their lowest in approximately nine months, suggesting fading conviction in the copper bull case near term.
Fixed income:
- Treasury curve shifts lower: Yields fell across the curve on Tuesday, with the 10-year yield down 5.1 basis points to 4.426% and the 30-year down 5.5 basis points to 4.925%, driven by falling oil prices easing inflation concerns ahead of the Fed decision. The 1-year yield fell 1 basis point to 3.839%.
- 20-year auction stops through: The Treasury sold $13 billion in 20-year bonds at a yield of 4.927%, stopping through the 4.937% when-issued yield at the deadline, with a strong bid-to-cover ratio of 2.75 versus 2.55 at the prior auction. Indirect bidder takedown was 71.57%, the highest in recent months, reflecting solid overseas demand.
- Fed and long-end outlook in focus: Markets are watching Warsh's first press conference for signals on the rate path. Commerzbank strategists expect real yields to remain elevated, particularly at the long end, citing rising government deficits and elevated issuance in the US and eurozone. Wells Fargo strategists note the path of least resistance for the Fed's balance sheet is continued shortening of Treasury duration holdings.
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