Macro update
Asian equities cap a record-breaking quarter: Japan’s Nikkei was on course for its strongest quarterly gain since 1965, rising more than 38%, while South Korea’s KOSPI looked set to deliver a near 71% advance, led by robust gains in semiconductor stocks.
Yen falls to a 40-year low: The widening interest rate differential between the US and Japan, alongside increasingly hawkish Federal Reserve expectations, pushed the dollar to ¥162.41, prompting Japan’s finance minister to reiterate that authorities remain prepared to intervene in currency markets.
Oil prices continue to retreat from conflict-driven highs: Brent crude eased towards $72 a barrel, close to pre-conflict levels, as investors priced in the prospect of de-escalation ahead of potential US-Iran talks in Doha, despite renewed missile exchanges over the weekend testing the ceasefire.
Wall Street reaches fresh record highs: The Dow Jones closed at a new all-time high, while the Nasdaq gained more than 2%, supported by strength in technology stocks, including SpaceX’s debut in the Nasdaq 100 and Alphabet’s first trading session as a Dow constituent.
Dollar heads for a fourth consecutive quarterly gain: Investors continued to build bullish positions on the US dollar throughout the first half of the year, although BlackRock strategists warned that much of the currency’s strength is already reflected in current valuations.
Foreign investors scale back exposure to Asia’s technology rally: Around $17.3 billion has flowed out of South Korean equities this year as portfolio rebalancing and profit-taking offset the region’s strong performance, while Hong Kong’s Hang Seng underperformed with a 7.5% decline over the quarter.
