Market Daily

Equity Market Updates

Micron (MU US)

Micron and Anthropic unveiled on Monday a strategic agreement covering memory and storage supply. The AI developer has in recent months signed several major agreements to secure more computing capacity, including deals with CoreWeave, Broadcom and SpaceX. Micron, a major supplier of high-bandwidth memory, said it would work with Anthropic to analyze how memory and storage systems perform across AI workloads and interact with the broader infrastructure stack.

MARKET CONSENSUS: 50 BUYS, 5 HOLDS, AVERAGE TP USD1143.18

IBM (IBM US)

IBM said on Monday that it has partnered with OpenAI to integrate frontier AI capacilities to enterprise security workflows. As part of the partnership, IBM launched a new application security service that uses OpenAI’s cyber capabilities to help organizations identify and validate software vulnerabilities with greater speed and precision.

MARKET CONSENSUS: 15 BUYS, 7 HOLDS, 1 SELL, AVERAGE TP USD298.18

Alphabet (GOOGL US)

Shares of Alphabet fell 5% on Monday after Google DeepMind vice president John Jumper said he was leaving for Anthropic. The departure came as Google struggled to sell AI coding tools to businesses, an area that has driven momentum for Anthropic and OpenAI in recent months. Last week, one of Google’s most prominent researchers, Noam Shazeer, also announced that he was leaving for OpenAI.

MARKET CONSENSUS: 67 BUYS, 8 HOLDS, AVERAGE TP USD432.14

SK Hynix (000660 KS)

SK Hynix on Monday overtook Samsung to become South Korea’s most valuable listed company. The company, now the dominant supplier of high-bandwidth memory chips used in AI systems, has emerged as one of the biggest beneficiaries of the global AI boom, propelling more than a 340% rally in its shares this year.

MARKET CONSENSUS: 46 BUYS, 1 HOLD, AVERAGE TP KRW2966438

easyJet (EZJ LN)

Castlelake on Monday made public its GBP4.74bln takeover plan for easyJet after the airline rejected three separate takeover bids from the alternative investment firm. easyJet’s board called Castlelake’s bid “opportunistic” and voiced “considerable reservations” about Castlelake’s envisaged ownership structure, which the board described as “opaque.”

MARKET CONSENSUS: 6 BUYS, 8 HOLDS, 3 SELLS, AVERAGE TP GBp446

Earnings Announcements

Global Indices Changes (%)

Fixed Income Market Updates

European Bank Coco (AT1)

The European AT1 market opened on a stable footing on Monday, reflecting a balanced but subdued trading environment. With macroeconomic conditions steady and political noise from the UK yet to make a significant impact, prices for these bonds remain largely unchanged. We anticipate the market to stay resilient in the near term, though any unexpected political or economic developments could introduce volatility.

Asia Investment Grade (IG)

The Asia IG market started the week on a softer note, with bonds in China and Hong Kong widening slightly. New bond issuances, such as those from NH Investment & Securities Co., Ltd. and POSCO International, are drawing attention, but demand remains selective. While short-term bonds faced some selling pressure, we expect sentiment to improve as investors adjust to the latest Federal Reserve signals and focus on upcoming deals.  

Asia High Yield (HY)

Asia High Yield bonds opened weaker, with prices dropping by 0.125 to 0.5 points and spreads showing mixed movements. However, the market firmed up in the afternoon as equities futures recovered and regional stocks rallied on hopes for progress in peace negotiations. While technical factors are keeping sellers on the sidelines, we anticipate continued caution, particularly as investors focus on new issuances and monitor the performance of recent deals like Well Link Life Insurance Co Ltd, which has struggled despite strong initial demand.

Forex Market Updates

USD

The US Dollar traded near the 101.00 handle on Monday, holding close to Friday’s 13-month high as investors weighed easing geopolitical risks, softer oil prices and expectations that the Fed would remain a restrictive policy stance for longer. Signs of progress between US-Iran boosted risk sentiment after Washington issued a temporary 60-day license permitting Iranian oil exports as part of ongoing peace talks. Iran has also agreed to allow IAEA inspectors and promised to keep the Strait of Hormuz open, pushing oil prices lower. Market participants are now focused on Thursday’s PCE Price Index release, the Fed’s preferred inflation gauge that would provide fresh clues on where policy is headed. 

The Dollar Index could see consolidation around the 101 level as markets digest this big move up.

EUR

The Euro fell to 1.1428 on Monday after a weaker-than-expected Eurozone consumer confidence report for June that came in at -17.7 versus the consensus -17.5. The Euro remains under pressure as the ECB faces a difficult balancing act between persistent inflation and slowing economic growth. Policymakers last raised interest rates by 25 basis points earlier this month to contain price pressures. On Monday, ECB President Lagarde also reiterated that the central bank must “remain agile” to the ongoing conflict in the Middle East although currently there is “no evidence yet of de-anchoring or second-round effects that warrant a more forceful policy action,” suggesting a cautious and patient policy approach. Investors now await preliminary PMI data in Germany and the broader Eurozone.

The Euro may face further downside for the time-being and trade lower towards the 1.14 level. 

AUD

The Australian dollar depreciated against the US dollar for the fifth straight day to close at just above 0.7000 amid still fragile risk sentiment.  The RBA left its cash rate unchanged at 4.35% at last week’s meeting, pausing after three consecutive 25bp of hikes earlier this year. Governor Michele Bullock also emphasized that further tightening remained possible if inflation proved to be persistent. This week’s headline inflation release is expected to post a rise to 4.4% in May from 4.2%, whilst core inflation is also expected to edge higher to 3.5% from 3.4%. Investors anticipate Wednesday’s key inflation data and domestic job figures on Thursday for more guidance on how the economy is doing.

The Aussie could remain under pressure for the time-being amid broader dollar strength although it seems to be supported past the 0.6900 handle. 

XAU

Gold prices advanced on Monday to 4,190 although expectations for a tighter Fed policy could weigh on the precious metal. The Fed’s meeting last week ended with a more hawkish bias as nine of the U.S. central bank's 19 policymakers now think they will need to raise the Fed's policy rate this year, according to projections published on Wednesday, when the Fed's board decided to leave the rate in its current 3.50%-3.75% range. Traders currently see a 70% chance of a Fed hike by September, according to the CME FedWatch Tool. On the geopolitical front, tensions between US-Iran escalated over the weekend but were later eased on Monday as US and Iran approved of a roadmap aimed at reaching a final deal within 60 days. Gold's trajectory will depend on how US-Iran negotiations pan out, the US inflation release this Thursday as well as how markets view future Fed policy path.

The yellow metal may see some consolidation around the 4100 level as markets digest the events and data released last week.

Please read carefully the disclaimer here:

Asia Disclaimer: 
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Europe Disclaimer: 
https://wealthmanagement.bnpparibas/ch/en/disclaimer.html