Asian Equities Track US Markets Higher

Asian equities are mostly higher today driven by hopes that softer US inflation data will prompt the Fed to start easing rates as early as September. The MSCI Asia Pacific Index advanced, with significant gains in New Zealand and Taiwan, while Japanese stocks fluctuated due to political uncertainty following Prime Minister Fumio Kishida's decision not to seek re-election. Chinese stocks dipped as data showed a contraction in bank loans to the real economy for the first time in 19 years, and investors are keenly awaiting earnings reports from major Chinese tech firms. The RBNZ has cut rates by 25bps, which saw the NZD fall about 1% and OIS soften about 10bps cutting meetings. US equity futures are little changed today, US Tsys yields are about 1bps higher after rallying overnight on soft PPI data, with markets now turning their attention to CPI data tonight.

• Japanese equities opened 1-2% higher this morning, before selling off on the back of news that the Prime Minister would not seek re-election, while the 5yr bond auction showed poor demand metrics, with bid/cover ratio falling to 3.5109 from 4.256 prior. Major benchmarks are trading just below key resistance levels (200-Day EMAs), the Nikkei is 0.12% higher, while the TOPIX is trading 0.75% higher, with banks the top performers.
• South Korean equities are higher today, led by gain overnight in tech stocks, Samsung Electronics (+1.50%), SK hynix (+2.25%) are contributing the most to the KOSPI's gains, while the small-cap focused KOSDAQ is 1.40% higher.
• Taiwan equities, similar to SK equities are higher on strong tech moves overnight, the Philadelphia SE Semiconductor Index was 4.18% higher overnight. The Taiex is 1.10% higher today, with TSMC (+1%) contributing the most to index gains.
• Australian equities are higher today, with healthcare & tech stocks the best performers while energy & materials the worst performers. New Zealand equities have rallied on the back of RBNZ cutting interest rates by 25bps, the board also commentated that they considered cutting 50bps which has seen all sectors jump higher.
• In Asia EM, most markets are trading higher with the USD falling against most Asian currencies. Indonesia's JCI is 0.75% higher, Thailand's SET is 0.50% higher, Singapore's Straits Times is 0.45% higher, Philippine's PSEi is 0.90%, while Malaysia's KLCI & India's Nifty 50 are little changed.