Hong Kong plummets to new low in 2023; Asian markets mixed as China’s factory activity contracted

Thailand’s central bank raised its benchmark reverse repurchase rate to 2%, up from 1.75%, the Bank of Thailand said in a statement.

This is the sixth straight rate hike since the Bank of Thailand began raising rates in August 2022 from a base of 0.5%.

The BOT explained that while headline inflation eased, core inflation remains “elevated” and inflation risks remain from greater demand pressures “amid expanding economic activity and higher cost pass-through from supply pressures.”[ads1];

The Thai baht weakened slightly against the dollar to trade at 34.75 on Wednesday.

– Lim Hui Jie

U.S. chipmakers embroiled in the U.S.-China chip war will push back if Washington imposes more export controls on China, said Carol Schleif, chief investment officer at U.S.-based BMO Family Office.

“Clearly, businesses in the U.S. want the government to step back a little bit and draw a very fine line,” Schleif said on CNBC’s “Squawk Box Asia” Wednesday.

Her comments come after Nvidia CEO Jensen Huang last week called China a “very important market” and warned that chip wars with China risk “enormous damage” to American technology.

In a retaliatory move against Washington’s efforts to cut China’s access to high-end chips, China banned the use of Micron – the largest US memory chip maker – chips in China in May.

BMO Family Office’s Schleif said the government wants to ensure security and protection of intellectual property, but at the same time companies need to participate in a global market.

“I would imagine that the government is going to listen to the heavy lobbying from business because we have a lot of important chip manufacturers,” Schleif said.

She added that while the U.S. invented semiconductors, most manufacturing is outside the U.S. “It’s just as important for us to rebuild the infrastructure we have here to continue to play and grow our position in these chips.”

– Sheila Chiang

North Korea’s first attempt to launch a military spy satellite failed on Wednesday, with South Korea’s military picking up the wreckage after the launch vehicle crashed in its western waters.

North Korea’s state media agency, the Korean Central News Agency, said there was an “accident” during the launch of a military reconnaissance satellite.

“The launch vehicle ‘Chollima-1’ fell into the West Sea in Korea after losing thrust due to abnormal start of the second stage engine after the separation of the first stage during the normal flight,” the English-language version of its website said.

South Korean defense stocks appeared unfazed by the launch on Wednesday, with Hanwha Aerospace and Korea Aerospace both flat in Seoul afternoon trade.

– Jihye Lee

China’s official measure of factory activity for May came in at 48.8, below the 50 mark that separates growth from contraction – missing the estimate of 49.4 from a Reuters poll.

A weak reading in that manufacturing measure “has been a solid precursor to policy easing,” Morgan Stanley analysts said in a May 17 report.

“If growth does not accelerate sufficiently to narrow the output gap, social stability risks could increase and eventually trigger more meaningful stimulus,” they said.

The National Bureau of Statistics noted that the Purchasing Managers’ Index for large manufacturers came in at 50, while that for smaller manufacturers was lower. The service activity index remained in expansionary territory at 54.5, but marked a straight month of declines.

—Evelyn Cheng, Jihye Lee

Australia’s headline inflation reached 6.8% in April, higher than the expectations of economists polled by Reuters. The survey of 19 economists saw predictions ranging from 5.9% to 6.6%.

The country’s statistics agency elaborated that the most significant price increases were for housing, which saw a year-on-year increase of 8.9%.

This was followed by increases in food and non-alcoholic beverages, as well as transport, which had increases of 7.9% and 7.1% respectively.

– Lim Hui Jie

Wall Street is once again abuzz over artificial intelligence ever since chipmaker Nvidia reported blowout earnings last week.

Aside from Nvidia, investors have been piling into stocks that could benefit from AI. One of them is advanced micro devices.

But what lies ahead for the share and does it have the potential to rise further?

CNBC Pro subscribers can read more here.

— Weizhen Tan

Retail sales in Japan rose 5% from a year earlier in April, the authorities showed on Wednesday.

The latest reading is also a sharp drop from the 7.2% growth seen in March and sharply missing the 7% estimate in a Reuters poll of economists.

The Japanese yen strengthened slightly to below the 140 mark last trading at 139.71 against the dollar.

China’s National Bureau of Statistics purchasing managers’ index for manufacturing is expected to remain in contraction territory with a reading of 49.4, below the 50 mark that separates growth from contraction, a Reuters poll of economists showed.

The factory activity reading for May comes after April’s reading fell below estimates to 49.2, the lowest since December 2022.

The Caixin manufacturer’s purchasing managers’ index for May is expected to be released on Thursday, with economists polled by Reuters forecasting a reading of 49.5.

– Jihye Lee

Richmond Fed President Thomas Barkin warned that he believes inflation will remain stubborn going forward, noting that he has not “backed off” from his rate forecast – which he said is among the higher at the central bank.

— Fred Imbert

Oil prices fell more than 4% on Tuesday as market watchers weighed the likelihood of Congressional approval of the US debt ceiling deal and looked to the OPEC+ meeting scheduled for this weekend.

Brent crude fell $3.28, or 4.3%, to $73.79 a barrel. US West Texas Intermediate crude lost $3.06, or 4.2%, to $69.61.

Energy stocks were the worst performers in the S&P 500, down about 1.5% in Tuesday’s session. With Wednesday marking the last trading session of the month, the sector is also set to see its worst performance of May with a 9.3% fall so far.

– Alex Harring

Nvidia shares added to a recent string of gains on Tuesday to reach a market cap of $1 trillion.

With Tuesday’s move, Nvidia joins an elite club of companies with a market capitalization of $1 trillion or more. That group includes Alphabet, Apple and Microsoft.

Shares rose more than 4% in early morning trading to last trade at around $405.56. Shares need to hold above $404.86 to maintain that gap during Tuesday’s trading.

Tesla shares rose more than 3% in premarket trading following reports of CEO Elon Musk’s trip to China.

Reuters reported on Monday that a private jet used by Musk arrived in China. He is expected to meet senior Chinese officials and visit the electric car maker’s Shanghai factory, according to Reuters.

The trip comes as Bank of America analyst Matty Zhao said on Monday that China is likely to be the world’s largest electric car market by 2025, accounting for between 40% and 45%. That would mark a decline as the country now accounted for about 60% of global market share in 2022, but Zhao said growth in the US and Europe would not be enough to make another country the biggest market in 2025.

– Alex Harring