Ceasefire Lifts Risk Assets, Golden IPOs On Horizon

Key News

Asian equities were mostly higher as investors celebrated the tentative Israel-Iran ceasefire agreement, which removes a significant risk factor to energy shipments, which Asian nations tend to rely on heavily.

Starbucks said that it is not considering a full sale of its China business, contrary to media reports from Caixin and others. It will continue to own some of its operations in China’s markets directly, as the CEO referred to a “great team” in China and a strong adoption and appreciation for its products. Starbucks rode the rising popularity of coffee in a culture that traditionally favored tea for fuel in the morning, selling not only a tea alternative but also a premium one.

Apple suppliers were higher overnight after the smartphone maker made a widget on its China website specifically to facilitate the application for rebates under the national subsidy program. The program was expanded to include smartphones only after it was initially established, so it took some time for smartphone makers to adapt their purchase process for their customers. Apple’s inclusion in the program is a good sign for the longevity of their business in China, which is seeing steep competition from Huawei and Xiaomi, which also sells vehicles.

Meituan will reduce the coverage of its “Meituan Select” discount grocery service to only the profitable provinces of Guangdong and Zhejiang. Despite the ongoing war for instant delivery wallet share, shares were up on the cost-cutting move.

Gold IPOs are on the horizon as the metal shines bright amid geopolitical tensions. Gold miner Shanjin International has picked banks for its Hong Kong IPO. Meanwhile, Zijin Mining is looking to spin off its overseas gold business in a listing.

China added two new chemicals to its fentanyl precursor export control list on June 20th, which should help in negotiations with Trump. Maybe a China deal is coming after Middle East peace? We will see.

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Last Night’s Performance

Last Night’s Exchange Rates, Prices, & Yields

• CNY per USD 7.17 versus 7.18 yesterday
• CNY per EUR 8.32 versus 8.31 yesterday
• Yield on 10-Year Government Bond 1.65% versus 1.64% yesterday
• Yield on 10-Year China Development Bank Bond 1.69% versus 1.68% yesterday