Macro

• The historic Japan/US intervention to support the JPY at the end of July is already being tested as the yen falls back to the 160 level.
• Intervention methods are limited in scope, and jawboning threats carry limited weight.  Each successive intervention since the BOJ began to normalize rates has required greater firepower.
• Hedge funds, traders, and even Japanese investors have already begun rebuilding short yen positions, taking advantage of the stronger yen to reposition.  

• In the context of yesterday’s discussion, we are increasingly confident that our long-standing estimated trading range for the prompt NYMEX crude oil contract will remain intact.         
• Once again, our estimated peak has been around $88.00 per barrel with the trough at roughly $68.00 per barrel.                       
• In terms of the trough, our Base Case still expects the fourth quarter to average $68.25 per barrel, versus a temporary bottom during any period of volatility.                

• Asia and China accounted for 55% of global supply, maintaining a share above 50% for the ninth straight month despite lower regional output.
• Global demand rose by more than 4% in May, but growth slowed to its weakest pace in 11 months as stock-building eased.
• The global surplus held below year-earlier levels for the eighth time in nine months, with the January-May surplus down by about 35% from the same period in 2025.

• Oil futures were drifting lower on Thursday as a sharp increase in US crude inventories and weaker global demand forecasts offset continuing supply concerns linked to restricted traffic through the Strait of Hormuz.
• At 2020 London time Oct26 ICE Brent was down 2.4% at $86.88 / b , while Sep26 NYMEX WTI dropped $2.6% to  $81.09/b .
• The declines had narrowed from earlier in the Asian session after Brent and WTI fell by more than 2%.

• This is our first inaugural issue of Korea Sector ETFs Weekly. There are two main purposes of this weekly insight. 
• This weekly report tracks share price performance for Korea’s 23 major sector ETFs. It helps investors identify market trends by revealing exactly which sectors are outperforming or underperforming.
• Second, tracking sector ETF performance reveals early clues about specific catalysts driving higher stock prices for the companies within those ETFs.

• In Depth: Dating Apps Build a Business Around Catfishing Older Men A dating app that marketed itself as a way to meet people nearby used a “chat-to-earn” business model to weave female chat operators across China into an organized scam targeting middle-aged and older men.
• The People’s Bank of China signaled plans to diversify loan pricing benchmarks and further refine its short-term interest rate framework in its second quarter monetary policy report released Wednesday.
• U.S. Market Makers Narrow Futu, Tiger Insider-Trading Suit to 45 Individuals

• Cargo loadings from Taiwan slowed, after a surge in shipments in late July and early August, with one cargo moving to China in recent days.
• A cargo loaded from South Korea in second-half June  and reached Brazil in recent days, after a stop in South Africa.
• A large cargo loaded from Singapore in the past week before heading to Fujairah, UAE, set to arrive in second-half August; it is the first such shipment to the UAE since March.

• Market hopes for the Strait of Hormuz reopening proved premature, renewing energy price pressures even as rates and equities asymmetrically shrug off the hawkish shock.
• US disinflation further dampens the chance that the Fed hikes soon, while a strong end to Q2 challenges the BoE’s dovish assumptions, but probably not to a breaking point.
• UK data releases next week should lower the unemployment rate again to 4.8% and push CPI inflation back up to 3% on belated pass-through to energy utility bills.

• A surprisingly strong end to Q2 for GDP yields 1.1% growth so far in 2026. A 33bp unemployment rate fall and a 6-8% credit growth trend make activity cyclically strong.
• Residual seasonality does not explain all of GDP’s strength, which goes beyond the norm of recent years. The non-seasonally adjusted data also signal unusual strength.
• The signal seen through multiple lenses across H1 is of activity growth beyond potential, implying loose policy. The BoE assumes policy is tight and seems set to repeat mistakes.

• The Buy Side Sentiment Tracker aggregates published asset-allocation views from 50+ asset managers across more than 70 assets.
• Grinding more bullish: Risk appetite rose for a third month, but buy-side positioning remains less bullish than before the Iran war and still shows meaningful caution.
• Consensus extremes: Infrastructure, Equities and Tech are most popular; CHF, Cash and Consumer Discretionary least popular. The US-over-Europe preference is unusually broad across asset classes.

• Crude oil futures were trading sideways on Wednesday as a huge build in US inventories balanced out a market still watching for signs of a change to restricted traffic through the Strait of Hormuz.
• Oct26 ICE Brent was down 0.2% on the day in a choppy session at  $88.71/b at 2045 BST, while September NYMEX WTI was off 0.4% at  $82.91/b .
• The benchmarks have gained sharply since the start of the week, including an advance of about 5% on Monday, and recorded their highest settlements since 31 July earlier in the session as the nearby Brent contract peaked at $90.09/b before retreating.

• Growth slowed to 5.3%, but stronger government spending and investment offset weaker consumption, manufacturing momentum, and a negative net-trade contribution.
• Alternative indicators suggest underlying activity was materially softer, with falling retail sales, weaker confidence, and soft manufacturing conditions.
• Achieving around 6% growth in 2H26 looks implausible, even as the government struggles to recover its policy credibility. 

• The latest weekly EIA report was extremely bearish for crude oil, but we will reserve final judgment on the overall fundamentals pending another week or two of data.         
• If it marks the beginning of a trend, however, almost irrespective of how long the Strait is “closed,” we may not see materially higher prices from here through end-2026.                      
• The odds are tending to favor, therefore, that we have been correct in stating that the peak in the prompt NYMEX crude oil contract occurred on February 28.  

• In Depth: China’s Motorcycles Have Outrun Law That Scraps Them at 13
• Ten years after motorcycle enthusiast Li Xiaoli (not his real name) spent nearly 200,000 yuan ($29,614) to import a Triumph Scrambler 900, the British-built retro road bike had already been condemned to the scrapheap.
• At least according to Chinese law.

• The Norges Bank held at 4.25%, matching the consensus call, but it kept a hawkish bias, saying a further hike may still be needed.
• Core inflation undershot June forecasts again, raising the odds that 4.25% could be this cycle’s peak if disinflation persists.
• Soft housing and stable labour data put September’s rate path revision in focus, with downside risks to the projected peak.

• As the April-June quarter earnings season winds down, positive surprises outnumber disappointments. Consensus earnings estimates keep getting upgraded in Asia and the US. Asian EPS upgrade has lately outpaced US’s.
• Over the last month, consensus 2026 EPS estimate of Asia-ex-Japan has been upgraded 4.4%, driven by Korea (12.8%), Taiwan (5.8%), Thailand (5.5%). 105 of 162 market-sectors have seen EPS upgrades.
• The encouraging signs are: breadth across a wide range of sectors and not driven by AI capex only. Sectors not directly linked to AI exuberance are among top earnings gainers.

• Oil market participants are now trying to decide if the prompt NYMEX crude oil contract can challenge the upper end of our previously delineated trading range.          
• We will see over the next few days whether traders are anticipating “duration,” i.e. a further tightening of the market, or renewed strikes if President Trump’s patience runs out again.                     
• We will be so bold to suggest that the “duration” scenario would imply a slow and progressive rise in oil prices, whereas the military scenario would imply increased volatility.              

• Crude oil futures pared earlier gains Tuesday on reports a US-Iran peace deal was close, after fresh attacks on shipping in the Red Sea and Gulf of Oman pushed benchmarks higher.
• Oct26 ICE  Brent futures were up 1.3% from Monday’s close at $88.89/b at 2022 BST, having earlier topped $90/b, while Sep26 NYMEX  WTI was 1.4% higher at higher at  $83.24/b .
• Benchmarks softened after Pakistan signalled progress on an Iran-US deal that could see commercial shipping return to the Strait of Hormuz.

• TOP STORIES In Depth: How a Ponzi Scheme Fleeced China’s Elderly In early August 2023, a 69-year-old retiree named Li Chunlin made what he believed was a shrewd financial decision.
• A “little steward” — the term used by sales representatives at Dalian Shanhaihui Development Group Co. Ltd.

• TOP STORIES In Depth: China Hunts for a New Auto Engine For years, China’s booming automotive market served as a primary engine propelling the nation’s retail growth.
• But as the calendar turned to 2026, that once-dependable engine suddenly stalled.
• FINANCE & ECONOMY Exclusive: China Widens Tax Net to Offshore Insurance Chinese mainland tax authorities have started levying personal income tax on the returns of offshore insurance policies, closing a longstanding regulatory loophole as global financial data sharing improves, Caixin has learned.

• TOP STORIES In Depth: At WAIC, China’s AI Boom Runs Into Commercial Reality The World Artificial Intelligence Conference (WAIC) in Shanghai opened this year with the buzz of a trade fair at full tilt — and the unease of an industry under pressure to show it can turn technical advances into durable businesses.
• FINANCE & ECONOMY Caixin Explains: How China’s New Offshore Trust Rules Close Tax Loopholes China’s wealth management industry is scrambling to assess the impact of new regulations that target longstanding loopholes for offshore trusts.
• China’s Entrusted Local Pension Funds Post 5.8% Annual Return The portion of China’s local pension funds entrusted to a state-backed council for investment generated a 5.76% return last year, marking the ninth consecutive year of gains despite market volatility.

• US payrolls and CPI should determine whether the Fed hikes in September, but neither release for July signalled an immediate need, so action should be deferred.
• The latest inflation impulse is around a target-consistent level, although the sticky-price rate is 3.5% saar. We doubt the problem is solved, but it seems uncompelling.
• A high evidential hurdle needs clearing to break dovish assumptions. We doubt the Fed will clear it, even as the ECB prepares its second and the BoE belatedly goes once.

• July was a month of market mean reversion; stocks that were up more than 100% in the first half, fell back an average of 25% in July, while stocks that were down more than 50% rallied by an average of 11%.
• In most cases, this still left the longer term themes intact, but for those who live and die by monthly returns it is fair to say it was a tough month.
• The biggest hits came in the crowded tech hardware stocks, where we discovered at the end of the month one particularly large and heavily leveraged fund was forced into a dramatic unwind.

• LME and SHFE inventories have plunged 42% and 84% from their peaks, respectively, while COMEX stocks hit 653 kt as traders front-load shipments ahead of potential US tariffs.
• COPX attracted USD 62 Mn of inflows across two trading sessions following a USD 20.2 Mn outflow, as the Fed’s decision to hold interest rates revived investor confidence.
• Glencore’s adjusted copper EBITDA is expected to accelerate by 62% in FY26, while a potential ASX listing could strengthen capital access and unlock fresh M&A opportunities.

• Given yesterday’s rally, oil market participants may believe, correctly in our view, that the Strait of Hormuz will be “closed” indefinitely
• In addition, however, some funds also believe, also possibly correctly, that President Trump will lose patience with “waiting it out” and launch major military strikes down the road.                    
• We have pulled our recommendation to buy NYMEX CL calendar spreads because the market now believes that the stalemate will last longer than anticipated.             

• Kuwait’s non-oil PMI jumps back over 50. Saudi’s a touch lower but will over 50.                                       

• Aramco’s Q2 profits jump 42 %.

• 97 % occupancy rate for office space in Riyadh.

• Crude futures opened the week higher as Iran dug in on its conditions to open the Strait of Hormuz, while investors continued to face uncertainty around the wider geopolitical situation.
• Oct26 ICE  Brent futures were 4.5% higher at $87.34/b (2029 BST), versus an intraday high of $87.93/b, while Sep26 NYMEX WTI was at $81.85/b , up 4.7% versus Friday’s settle.
• Prices firmed after Iran’s Supreme National Security Council set out a list of six conditions over the weekend it says must be met before the Strait of Hormuz can fully reopen.

• Global air freight rates edged slightly lower overall last week according to the latest data from TAC Index, the leading price reporting agency on air freight markets and calculating agent for the Baltic Air Freight indices.
• The global Baltic Air Freight Index (BAI00) eased down -0.2% over the seven days to August 10, leaving it still up +16.9% from 12 months earlier as hopes of a more lasting deal between the US and Iran and potential reopening of the Strait of Hormuz eased some of the recent pressure on crude oil markets and jet fuel prices.
• Rates on the busiest lanes out of China were still slightly higher again WoW both to Europe and to the US.

• The Fed is buying Treasuries again—but this is not QE: purchases are mainly short-term bills designed to maintain banking-system liquidity, not stimulate the economy
• Rising Fed assets is not always “money printing”: reserves remain near US$3 trillion as the liquidity created has been largely offset by Treasury operations, currency demand and other Fed liabilities
• This helps explain the US dollar’s resilience: bill purchases barely suppress long-term yields, unlike conventional QE, so the direct downward pressure on the dollar is limited

• Despite the narrowing of the US-Japan yield differential, the yen carry trade appears to be intact and has recently shifted away from Treasuries towards long-duration US risky assets.
• Recent foreign exchange intervention by the US and Japan cannot produce a rapid reversal in the yen’s fortunes without other conditions falling into place, including less global financial accommodation.
• The carry trade will remain intact in the near term. Japanese entities could play a major role in strengthening the yen via repatriation of overseas assets and higher onshore investment. 

• Cotton has rallied hard over the past couple of weeks.
• The primary driver has -not yet – been a dramatic supply shock.
• Hedge funds had been net short for nearly two years; that positioning began reversing in April, and short-covering into fresh long-buying has done most of the work since.

• In last Friday’s report we suggested that we were back to “square one,” i.e. the MOU, in terms of Iran’s demands before the Strait of Hormuz is “opened.”
• President Trump stated that he is willing to let economic pressure on Iran be the deciding factor, and therefore we would assume no resumption of military strikes against Iran.  
• Based on what we believe Tehran can tolerate, therefore, the odds appear high that the stalemate could continue through at least the end of 2026.         

• WTI fell 7.7% as Hormuz de-escalation hopes faded, while easing IV and weaker speculative positioning pointed to a more cautious oil market.
• Energy ETFs broadly tracked crude lower, with XOP and IXC among the biggest laggards, while utilities proved more resilient amid the broader risk-off move.
• Occidental delivered its strongest free-cash-flow quarter since 2022, beating earnings expectations and raising its dividend as debt continued to fall.

• The US Treasury Department has actively intervened in the F/X market to support the JPY for the first time since 2011 amid intensifying fears of weakness in US Treasury bonds.
• Treasury Secretary Bessent has suggested expanding the FIMA facility to allow Japan to borrow against its Treasury holdings rather than outright sales to support the JPY.
• The use of FIMA further expands the global US dollar monetary base, which provides a structural bid for gold as the primary non-sovereign store of value.

• Korea Economic Daily reports Solidigm — SK Hynix’s AI-storage arm — pursuing a KRW5-10T pre-IPO raise at ~US$35bn; SK Hynix’s Form 6-K denies a decision but commits to 4 Sep.
• SK Hynix’s US$738bn market cap assigns near-zero value to Solidigm — a QLC eSSD franchise tripling revenue QoQ — creating a base-case +3-4% stub re-rating catalyst.
• Reiterate BULLISH; Fair Value KRW3,500,000 (KRX)/US$236 (ADR), based on our DRAM/HBM earnings model; Solidigm pre-IPO crystallisation is additive optionality — 4 Sep the trigger.

• India’s recent outperformance coincided with AI capex anxiety. Simultaneously, macro-economic data points like bank loan growth and GFCF growth are improving. Valuations are higher than averages but not egregiously so.
• On growth-adjusted PE, basic materials, financials, consumer durables, transportation, industrial services, telecommunication stand out as cheaper than the market. Consensus EPS estimates of several sectors are beginning to get upgraded.
• On strong growth forecasts, reasonable valuations, healthy balance sheets and EPS upgrades over last 6 months, we screen 20 stocks – from financials, industrials, basic materials, utilities, healthcare and hardware.

• Gold has finally cleared the US$4,000-4,100 range that held it for nearly two months and trades at US$4,400, taking out our US$4,203 trigger and the 55-day.
• Technical indicators point higher: spot sits a whisker below the 200-day at circa US$4,460. Above it, the January downtrend is dead and there is open air.
• Fair Value unchanged at US$4,780 — the WGC fair-value band top of US$4,305 plus circa 11% for structural central-bank demand. Implied return +8.6%.

• A review of recent events/data impacting our investment themes and outlook
• The dollar has maintained its breakdown, with positive implications for our themes
• We continue to look for investments not correlated with the AI trade

• The market prices the rupee as an oil proxy; data describes capital inflows. The RBI’s swap facilities attracted $40.8bn in two months, fully covering net portfolio flight since late 2024.
• Warsh held against ~35% hike pricing in July. The curve steepened, the 30-year hit 5.27%, and the USD fell — pricing out hawkishness or demanding term premium. Either way, dollar-negative.
• Situational Awareness’s forced liquidation likely marked the low for risk: the Nasdaq  is up 9% since, and copper never blinked. Bessent signals Hormuz reopens within days; Brent is below $80.

Highlights

• Cambodia’s NR production increases by 90% MoM to 11,200 tons in April

• NR exports rise 106.49% MoM to 15,900 metric tonnes in April

• Prime Minister lays emphasis on contract farming to boost rubber sector

• News that Iran and Oman were close to a deal on Strait traffic brought market relief, despite unacceptable conditionality and ongoing attacks, including from the Houthis.
• A shock decline in US payrolls and downward revisions provide an easy excuse for doves to hold fire too. They discount the falling unemployment rate from boomers retiring.
• US inflation data are next week’s global highlight, beyond any potential progress to reopen the Strait of Hormuz. We also look to UK GDP data and the RBA rate decision.

• Banxico unanimously held at 6.50%, in line with expectations, while reinforcing guidance for a prolonged pause as disinflation proceeds.
• Delayed convergence to the 3% target and upside inflation risks raise the bar for renewed cuts, even as near‑term forecasts improve.
• Future moves hinge on core services inflation, FX and global shocks, with a higher hurdle for easing than for simply extending the hold.

• While we have been correct in terms of a potential Iran-Oman agreement to jointly “manage” the Strait, it appears the role of the U.S. is not what we had envisioned…..yet.       
• Part of the Iran-Oman deal includes the U.S. lifting the blockade of Iranian ports plus releasing at least some frozen Iranian assets.                   
• This conditional aspect complicates matters for the U.S., and fully supports our view that a renewal of military activity carries a relatively high probability.            

• Iran and Oman are completing an agreement on how they will administer the Strait of Hormuz.  The US negotiating team has not been part of the discussions.
• President Trump is in a weak negotiating position with high inflation and energy prices, declining poll numbers, reduced stockpiles of critical weapons, and elections in 90 days.
• The US will need to accept Iran’s terms for administration of the SOH as the cost of delay now exceeds the cost of compromise.

• While it appears part of our “implausible plausible” scenario may unfold as expected, the critical part, i.e. President Trump accepting it, has yet to unfold.       
• Iran indicated that a deal to “manage” the Strait with Oman is close to consummation, while Tehran has indicated that effectively the U.S. “has nothing to do with it.”                  
• Otherwise, on the trading front, we closed out our short Sep NYMEX RBOB position, booking a near $572,000 gross profit for our model energy portfolio.           

• Crude futures climbed higher over the session on Thursday as investors waited for confirmation of a deal that would allow commercial shipping through the Strait of Hormuz to resume.
• Oct26 ICE  Brent futures were 4% higher at  $82.66/b (2030 BST), while Sep26 NYMEX WTI was at $77.55/b , up 3.1% versus Wednesday’s settle.
• Prices rallied as doubts crept in over a new deal to reopen the Strait of Hormuz, with Iran and Oman reaching an understanding on the  logistical coordinates of a proposed shipping route through the waterway.

• Barisan Nasional (BN), allied tactically with Perikatan Nasional (PN), won 25 of Negeri Sembilan’s 36 seats, driven by consolidation of the Malay vote and weakening support for Pakatan Harapan (PH). 
• Despite successful cooperation in Negeri Sembilan and Johor, a comprehensive nationwide BN–PN pact remains unlikely: competition between UMNO and PAS for Malay-majority constituencies remains fundamentally zero-sum.
• The defeat increases pressure on PH and Prime Minister Anwar Ibrahim to delay the general election, pursue a more electorally generous budget and rebuild party machinery.

• SpaceX (SPCX US) released its maiden earnings announcement, and the market is unimpressed.  Although there were some estimate beats, the focus remains on the enormous capex and cash-draining AI business.
• The company is due to release large tranches of shares to the market over the next few months, beginning on August 6th, posing a major risk to the share price.
• SpaceX debt, although rated Investment Grade, trades like junk in the market, resulting in substantial losses for its investors since the IPO in June.

• Allegedly “progress has been made” in negotiations between Iran and Oman regarding “management” of the Strait of Hormuz, with apparently the U.S. “involved” in some manner.      
• If so, our previously discussed scenario could be the end game: Iran claims a “win” over the Strait as long as the U.S. claims a “win” over the nuclear issue.                  
• We shall see, but with great respect to the negotiating efforts, as previously discussed, we will believe it when we see it.             

• TLDR Summary China’s exports are booming once again. And this time they are not just producing cheap junk.
• They are innovating, taking over existing industries and shaping future ones.
• The media is popularizing this as the China Shock 2.0 . This time it isn’t just hurting Western wage earners.

• Crude futures were floundering at lower levels Wednesday amid growing optimism that a US-Iran deal was drawing closer, allowing oil to start flowing again from the region.
• Oct26 ICE Brent futures were 0.2% higher at $79.54/b (2034 BST), while Sep26 NYMEX WTI was at $75.21/b , down 0.7% versus Tuesday’s settle.
• US President Donald Trump told Fox News that “very good discussions” were underway with Iran, adding that the Strait of Hormuz would be “soon” open for commercial shipping.

• The CEO presented an overview of the second quarter against a Greek economy still running ahead of February’s base case scenario, helped by an 18-year low in unemployment and the RRF funds yet to be deployed.
• H1 profit after tax of €661mn before one-offs produced a return on tangible equity of 15.5% and took the FY 2026 target above 15%.
• NII accelerated and the margin turned off its Q1 low, lifting full-year NII guidance to mid-single-digit growth, with corporate lending driving credit expansion.