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Asia Market Quick Take – 27 July, 2026
Asia Market Quick Take – 27 July, 2026
Key points:
- Macro: US suspends strikes against Iran for 2nd night
- Equities: Intel reversed to close down 7.89% despite strong revenue forecast
- FX: USD broadly softer; FOMC ahead, MAS slightly tightens SGD, pressuring USDSGD
- Commodities: Brent crude gapped down below $90 and gold rallies above $4,100
- Fixed income: US Treasuries rally into FOMC, with 33% chance of a rate hike priced in.
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Disclaimer: Past performance does not indicate future performance.
Macro:
- The US suspended strikes against Iran for a second night, easing supply disruption fears after weeks of conflict. The unannounced pause began late Friday, as Tehran said it halted retaliatory operations and held talks with Oman over the Strait of Hormuz. However, Iran-backed Houthi forces in Yemen claimed weekend attacks on Saudi Aramco-linked facilities at the Red Sea ports of Jizan and Yanbu.
- US new single-family home sales rose 1.6% in June to an annualized 628,000, the first increase in three months and above forecasts. Builders’ discounts likely supported demand. Sales rose in the South, Northeast, and Midwest but fell in the West. Supply held at 485,000 units (9.3 months), while the median price dropped to $398,300 from $412,000 in May.
- The S&P Global US Services PMI rose to 53.6 in July 2026 from 51.2, the fastest growth this year, driven by stronger new work linked to World Cup spending and higher investment. The Iran war’s impact via higher energy costs curbed demand and kept job gains marginal. Input costs hit a 14‑month high and output prices a near four‑year high, while sentiment climbed to a one‑year high.
- The S&P Global US Manufacturing PMI edged down to 53.8 in July 2026 from 53.9, below expectations but still near a four-year high. Production, new orders, and inventory building slowed, partly offset by higher factory employment and longer delivery times due to Middle East–related supply disruptions.
- The S&P Global UK Composite PMI rose to 52.1 in July 2026 from 49.3, ending two months of contraction and beating forecasts. Manufacturing (53.6) and services (51.8) both strengthened, helped by easing energy pressures and World Cup–boosted hospitality demand. New work edged up, especially in factories, while firms worked through backlogs. Input costs fell on better Middle East logistics, but high labor costs continued to pressure hiring.
- The S&P Global Eurozone Services PMI rose to 51.6 in July 2026 from 49.4, a five‑month high that signals a return to expansion and beats expectations. Activity and employment strengthened, while operating costs kept rising but output price inflation eased as firms slowed price increases. Business confidence also improved on a better demand and economic outlook.
Equities:
- US — On Friday 25 July, the S&P 500 closed little changed at 7,411.98, finishing the week down 0.6% — its second consecutive weekly decline. The Nasdaq 100 fell 1.15% as chipmakers sold off sharply; the Philadelphia Semiconductor Index dropped 4.3%. Intel reversed an initial post-earnings advance to close down 7.89% despite a blockbuster revenue forecast. Tesla extended Thursday's 15% slump, falling a further 3.3%. Apple was a bright spot, rising 3.5%. Financials outperformed, up 0.9%. American Express fell 4.3% on elevated expenses. Heading into Monday, S&P 500 futures rose ~0.7% and Nasdaq 100 futures climbed ~1.2% as the US-Iran pause eased sentiment.
- EU — On Friday 25 July, the pan-European Stoxx 600 edged 0.6% higher to 644.67, rising for a second straight week and outperforming global benchmarks with a weekly gain of 0.5%. SAP lifted the tech sector. Nestle suffered a record single-day drop on Thursday after posting weaker volumes in North America. UniCredit's results were overshadowed by fears it may scrap a planned share buyback. Blended EPS growth for the Stoxx 600 is tracking approximately 17% year-on-year with roughly 30% of the index through results.
- Asia — Asian equities opened higher on Monday 27 July as the US-Iran ceasefire pause lifted sentiment. The MSCI Asia Pacific gauge rose 0.5%, led by South Korea and Japan. The Kospi surged 1.7% to 6,806.27 at the open, with energy stocks expected to track oil lower while broader risk appetite improved. Samsung wins $200b Broadcom AI chip partnership deal until 2030. The Topix rose 0.7%, though Chugai Pharmaceutical fell 5.3% — its worst day in two months — after its 2Q operating income missed estimates. Hong Kong's Hang Seng was supported by easing geopolitical risk, though Chinese chipmakers faced volatility as CXMT debuted following its $9.8 billion IPO. The Nikkei tracked higher alongside the Topix, with Goldman Sachs raising its 12-month Topix target to 4,500 from 4,400, reflecting weaker yen assumptions. The STI was broadly steady, with the MAS tightening providing a modest tailwind for the Singapore dollar.
Earnings this week:
- Monday – LVMH, Christian Dior, Navitas
- Tuesday - Visa, Coca-Cola, KLA Corp, Seagate, Boeing, S&P Global, Paypal
- Wednesday - Microsoft, Meta Platforms, Lam Research, Procter & Gamble, ARM Holdings, Qualcomm, Vertiv, Starbucks, SK Hynix, Hermès, L’Oréal, Rio Tinto
- Thursday - Apple, Amazon, Mastercard, Coinbase, PRADA, Budweiser APAC
- Friday — ExxonMobil, Moderna, AbbVie, Chevron, Kioxia
FX:
- USD weakened broadly overnight, with the Bloomberg Dollar Spot Index down about 0.2% as easing Middle East tensions pushed Brent crude roughly 5% lower to around $92 per barrel and pulled 10-year Treasury yields down about 5bps to 4.63%. Looking ahead, the FOMC’s two-day meeting starting tomorrow may limit further dollar downside in the near term.
- CHF is the strongest mover overnight (-0.33% on USD/CHF), consistent with safe-haven unwind dynamics as risk sentiment improves.
- JPY remains structurally weak: Despite a modest overnight gain, USDJPY sits at 163.58 — near multi-decade highs. Goldman Sachs revised its FY26 USD/JPY assumption to 162 from 157 and lifted Topix targets accordingly. (3)
- The MAS “very slightly” steepened the SGD NEER policy band, pushing USDSGD down around 0.15% to 1.2886.
Commodities:
- Brent crude fell as much as 7.4% at Monday's open, briefly dipping below $90 a barrel before recovering to trade near $92. WTI fell to approximately $85/bbl. The move reverses part of last week's surge that briefly took Brent above $100 — a level not seen since late May — as the US-Iran conflict escalated. European natural gas futures also slid at the open. The Houthis claimed attacks against Saudi targets, keeping a residual risk premium in the market.
- Gold has been trading above $4,100 an ounce in July, on track for its first month of gains since the Middle East conflict began. Central bank reserve buying and sovereign debt concerns are cited as structural supports. The overnight drop in oil and easing inflation fears could temper safe-haven demand at the margin, but dip-buyers have been active.
- Copper edged higher in recent sessions, with supply tightness in China cited as a key driver.
Fixed income:
- US Treasuries are rallying overnight as the slide in oil eases inflation concerns. The 10-year Treasury note futures gained 10/32 to 108-5/8. Last week, 10-year yields surged 13 basis points to 4.71% — the highest since early 2025 — and 30-year yields touched 5.10%, driven by oil-fuelled inflation fears and geopolitical risk premium.
- Bond markets are entering the week with better than a one-in-three probability of a Fed rate hike on Wednesday, a significant shift from prior expectations of an extended hold. Fed Chair Warsh faces a close call, with the bond market signalling that tough talk on inflation alone is insufficient. A hold is still the base case, but the tone of the statement and press conference will be critical.
- Japanese government bonds are expected to rise Monday, following the drop in oil and lower US Treasury yields. The Japan 2-10 year yield curve is currently at 129 basis points, with consensus forecasts seeing it flatten to 114 basis points by end-Q3, as 2-year yields rise to 1.59% and 10-year yields fall to 2.73%. The BOJ rate decision this week will be watched for any shift in tone given energy price volatility.
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