Macro Update
Asia stocks rise on AI optimism: Asian equities advanced as investors looked through inflation and geopolitical risks, with enthusiasm around AI supporting tech-heavy markets and European futures signalling a stronger open.
Trump-Xi summit offers few surprises: Market reaction was subdued as initial comments from Xi suggested progress in trade discussions but warned that disagreements over Taiwan could place US-China relations on a dangerous trajectory.
Nikkei touches record high: Japan’s Nikkei reached a fresh peak, driven by gains in technology, semiconductor and electronic component shares, although the broader Topix edged lower as weak earnings weighed on parts of the market.
Dollar supported by rate hike bets: The dollar remained firm after stronger US inflation data increased expectations of a potential Fed rate hike, while Treasury yields stayed near recent highs.
Oil remains above $100: Brent traded near $102 and WTI above $100 as the Iran conflict continued to disrupt supply, with markets watching whether the Trump-Xi meeting could help ease tensions.
Yuan hits three-year high: China’s yuan strengthened to its highest level in three years ahead of the summit, while sterling remained under pressure from UK political turmoil and the yen found some support from hawkish Bank of Japan comments.
