GGMA Markets Briefing: AI-Trade Unwind Spreads to Asian Stocks and Won as Markets Brace for US Jobs Report
The AI-trade unwind extended into a third session ahead of today's US jobs report (see preview). I will be watching the wage series in particular, as mentioned yesterday here.
US equity-index futures fell with Asian stocks as enthusiasm for the artificial-intelligence trade cooled, with South Korea's Kospi — the year's best performer — slumping and chip names leading the retreat as cracks emerged in its remarkable 2026 rally (BBG). South Korea's labour minister urged technology firms to share excess AI profits with workers. The call adds a redistribution dimension to the AI debate in the country at the centre of the chip boom. (Reuters) The Broadcom miss that triggered the pullback revived AI bubble concerns, with Ray Dalio warning that the market shows characteristics of a boom that will eventually unravel. (BBG).
The Korean won slid to a fresh multi-year low, despite Korea's current-account surplus near a record on the chip boom (BBG), as foreign investors pulled money from the region. The Indian rupee bucked the trend after the RBI announced steps to boost capital inflows and President Trump signalled confidence in a US-India trade deal (BBG). Japan tried to shore up the yen: the finance ministry warned of decisive action after intervention-related sales of foreign securities, and Prime Minister Takaichi pledged to defend the currency by strengthening the economy (Reuters) (WSJ).
On the data front, Japan's real wages rose for a fourth straight month with nominal pay accelerating, reinforcing the case for a June BoJ rate hike, while household spending fell less than feared (BBG).
Regarding central banks, the RBI held its policy rate as expected and paired it with inflow-boosting measures, a hawkish-leaning pause. San Francisco Fed President Mary Daly said policy is "in a good place" but flagged too much uncertainty ahead. The People's Bank of China resumed open-market cash injections after a two-day pause. The move signals continued liquidity support for the financial system. It comes against a backdrop of soft Chinese activity and a deepening domestic bond rally. (TS)
Oil rebounded from Thursday's lows as Oman suspended loading at a key terminal following an explosion, adding a supply-risk element against the ceasefire-driven pullback (Reuters). Meanwhile, progress in US-Iran talks stalled after Hezbollah rejected the proposed truce, complicating the path to a broader diplomatic breakthrough. The setback tempers the de-escalation optimism that had pressured oil. Markets continue to watch the conflict as a key swing factor. (YF) Trump said he could meet Iran's supreme leader 'if it was to make a deal' .
Beyond the chip rout, the AI theme cut both ways across markets: hedge funds piled into shorts against call-centre stocks on the automation threat (FT), Blackstone capped redemptions from its flagship private-credit fund amid a continued investor exodus (BBG), and SpaceX pitched its IPO to retail investors even as S&P Dow Jones Indices left its fast-entry rules unchanged (BBG).
In politics, Andy Burnham confirmed he will challenge Keir Starmer for the UK premiership, reviving leadership uncertainty. He is reported to be examining how to boost infrastructure spending within fiscal rules. The challenge adds a domestic political overhang for UK assets. (BBG)
Good luck today!