In June, global markets turned more volatile as geopolitical tensions eased temporarily and Fed policy expectations were repriced. US-Iran negotiations progressed, and a ceasefire memorandum was signed mid-month, quickly erasing the geopolitical premium in commodities and pushing crude back toward pre-conflict levels. At the same time, stronger-than-expected US payrolls, persistent inflation, and four straight months of manufacturing expansion, together with hawkish signals from Europe and Japan, lifted expectations for further Fed tightening. Real yields and the US dollar rose in tandem, weighing on broad risk assets. Gold briefly fell below $4,000, while miners continued to correct sharply.
AI equities also diverged. US stocks surged early in the month before turning volatile, with capital rotating into cheaper value names. In Japan and Korea, AI-related stocks were more resilient, supported by earnings expectations in memory chips; the rally was fundamentally driven rather than valuation-led, but results later triggered a high-level pullback. In mainland China, computing
power and high-valuation chip design names weakened, while capital rotated into semiconductor equipment, lithography materials, and domestic substitution in memory. Hong Kong shares were similarly split, with heavy IPO issuance draining liquidity and leaving AI semiconductors as one of the few bright spots.
Domestically, May aggregate financing reached RMB 2.03 trillion, below last year by RMB 260.7 billion. New RMB loans totaled RMB 520 billion, still down year on year, while corporate medium- and long-term loans remained weak despite support from bill financing.
Looking into July, softer US payrolls have slightly eased rate-hike expectations, but the Fed’s hawkish stance may have already peaked. Still, the US-Iran talks remain a key variable, so we continue to expect range-bound trading and favor tactical opportunities rather than a clear trend reversal.