Equity Market Updates
Market Daily
12/06/2026
Macro Update:
ECB hikes interest rates for first time since 2023
As expected, the European Central Bank (ECB) announced a 25 basis point (bp) rate hike yesterday. The central bank sees 2026 inflation at 3% compared to its prior forecast of 2.6%. President Lagarde pushed back on suggestions that it was an “insurance” hike, saying the decision stood on its merits. In the US, headline Producer Price Index (PPI) rose more than expected at 1.1% month-on-month (MoM) in May, putting the year-on-year (YoY) rate at 6.5%. Core PPI was up 0.4%, slightly lower than the consensus of 0.5%.
Headlines regarding the Middle East conflict were mixed, with Trump first announcing a major escalation of strikes before quickly cancelling the plans and declaring that a peace deal was close, with the time and place of signing to be announced shortly. However, the semi-official Iranian news agency said Iran had not yet approved any text for an agreement with the US. The news on potential de-escalation saw oil prices and US yields declined sharply. All eyes will be on SpaceX’s historic market debut on the Nasdaq tonight.
Main Upcoming Macro Indicators
HK/China shares continued lower yesterday, led by declines in tech, as tensions in the Middle East weighed on sentiment.
Within the region, we remain constructive on tech and healthcare amid strong potential government support as laid out in China’s latest Five Year Plan.
Samsung Electronics (005930 KS)
Alphabet is reportedly in talks with Samsung to manufacture part of its next-generation AI processor. According to the report, Alphabet specifically plans for TSMC to make the main computing part of the tensor processing unit (TPU), while Samsung will produce a component that helps connect it to memory using its 2-nanometer production technology.
MARKET CONSENSUS: 44 BUYS, AVERAGE TP KRW447734.84
Adobe (ADBE US)
Shares of Adobe fell more than 5% during after-market hours on Thursday as its CFO Dan Durn said that he would depart, leaving the company without veteran leadership after CEO Shantanu Narayen announced in March that he would step aside. The muted share price reaction came despite Adobe posting better than expected FY2Q results and full-year guidance.
MARKET CONSENSUS: 16 BUYS, 23 HOLDS, 4 SELLS, AVERAGE TP USD319.83
Xiaomi (1810 HK)
Xiaomi on Thursday filed with regulators to add an extended-range electric vehicle to its lineup. The late EV entrant, which has rapidly emerged as a strong rival to established brands such as Tesla and BYD, currently offers the battery-powered SU7 sedan and YU7 SUV.
MARKET CONSENSUS: 41 BUYS, 6 HOLDS, 3 SELLS, AVERAGE TP HKD38.99
Honda Motor (7267 JP)
The US National Highway Traffic Safety Administration (NHTSA) said on Thursday that Honda is recalling over 1mln vehicles in the US over a tire repair kit bottle. The automaker will recall some 2023-2026 CR-V Hybrid, Accord Hybrid, and 2025-2026 CR-V Fuel Cell EV models as "pressure may build within the sealant bottle, causing the bottle cap to detach" when using the tire repair kit.
MARKET CONSENSUS: 7 BUYS, 13 HOLDS, 2 SELLS, AVERAGE TP JPY1511.5
Earnings Announcements
US Market
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European Market
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HK - China Market
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Global Indices Changes (%)
Fixed Income Market Updates
Rating agency Fitch affirmed QBE Insurance Group’s long-term issuer default rating at A with a stable outlook. We continue to prefer Investment Grade over High Yield and financial bonds from down under remains our favoured picks. We continue to like bonds of major Australian financial institutions under our coverage.
European Bank Coco (AT1)
Prices in the European Bank AT1 closed unchanged overall despite relatively active trading flows. Flows were balanced with decent volume both ways. There were no clear under or outperformers for the day and asset managers were focused on relative value switches. We expect technicals to be supportive in this space should marcoeconomic sentiment stabilise.
Asia Investment Grade (IG)
Asia IG market was largely quiet with spreads broadly unchanged to slightly wider. Primary activity was limited except for Indonesia's sovereign wealth fund - PT Danantara Investment Management managed to print USD1.5bn over 2 tranches (5 and 10-year) on its debut. We are cautious in the Indonesia space and would prefer more fiscal clarity from the government before jumping into it.
Asia High Yield (HY)
Asset managers were net sellers in Asia HY space, driving prices lower overall. In Macau gaming space, longer tenor bonds continued to underperform. In Indonesia HY space, bonds were another 0.125 to 0.25point lower although macroeconomic sentiment in Indonesia had stabilise somewhat after Bank of Indonesia hiked rate. In India, Vedanta continued to be the most actively traded. There were also buying interest in the renewables space.
Forex Market Updates
The US Dollar gave back half of the week's gains after President Trump cancelled US strikes on Iran, citing progress in talks.
USD
The US Dollar Index dropped sharply against major peers on Thursday after President Donald Trump called off plans for renewed U.S. military strikes on Iran at the last minute, saying negotiations with Tehran were heading towards a possible deal. Trump said negotiations with Tehran had advanced to the highest levels of Iran's leadership and a deal had been approved by a broad coalition of regional powers. Iran's semi-official Fars news agency reported that Tehran is likely to approve the agreement, although it has yet to give a formal response. Meanwhile, the Federal Reserve is expected to hold rates steady next week at Kevin Warsh's first meeting as Fed chair, with a strong majority of economists in a poll predicting that the U.S. central bank would keep rates unchanged for the rest of 2026.
The Dollar Index should remain well supported above 99.00 in the near term.
GBP
The British Pound held firm against the euro on Thursday ahead of a European Central Bank meeting that should be the day's main driver for the currency pair with little in terms of scheduled news due from Britain. The pound has been supported against its nearest neighbour in recent months by broad risk sentiment as well as traders shifting their expectations for Bank of England policy moves from rate cuts this year to hikes due to the conflict in the Middle East. A raft of British economic data due next week and a Bank of England policy meeting will give traders in euro/sterling the other half of the picture.
Sterling could face more downside pressure for the time-being, with support at the 1.1500 handle.
CAD
The Canadian Dollar weakened against the greenback on Thursday, and the yield on benchmark government debt slipped. The pair drew support from firm US Dollar sentiment as markets continued to price a relatively hawkish Fed path amid resilient US growth, while Canadian data and softer risk sentiment did little to meaningfully bolster the loonie. The macro backdrop remains one of sluggish but positive growth, leaving the Band of Canada with limited room to push policy much tighter, which tends to cap CAD strength when US yields stay elevated.
Sluggish economic growth could weigh on the Canadian dollar for now, pushing the USDCAD pair toward 1.4000.
XAU
Gold prices rose 2% on Thursday, with U.S. President Donald Trump calling off planned military strikes on Iran easing fears of oil-driven inflation and elevated interest rates. Trump said he has cancelled planned strikes against Iran on Thursday, hours after threatening more bombings and a desire to "take" oil export hub Kharg Island. Spot gold has been under pressure since the outbreak of the U.S.-Israeli war against Iran in late February, as rising oil prices fuel expectations of prolonged high interest rates. While gold is viewed as a hedge against inflation, higher interest rates tend to weigh on the metal. Following Trump's decision to cancel the strikes, the probability of a December U.S. rate hike fell to 62% from 69%, according to the CME FedWatch tool. Investors are awaiting next week's Fed meeting - Kevin Warsh's first as chair - where rates are expected to be held steady.
With a US-Iran peace deal remaining elusive, gold prices are likely to remain under pressure for the time being with $3,950 as the next key support level.
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