JPM International Market Intelligence | Morning Briefing

20 SECONDS: Tech broadening/Global narrowing. Per aspera ad ASTRA. USDJPY & new France probability tree. Global Equity Strategy & thoughts on EU GDP.

• Asian equities and US/EU futures are lower this morning. USDJPY briefly fell below 153, weighing on Japanese exporters (-3%; Autos -5%). Crude extended gains as we await details of the Iran-Oman deal. Energy and Rates appeared to matter more overnight.

• Tech broadening/Global narrowing try to play out.

• Last Monday, we moved to neutral/tactically cautious on equities as several risks linger: terminal G4 central-bank rates, energy prices and crack spreads, politics, and July/August’s forced rotation out of Tech. On energy, the odds of a US- Iran deal continue to fall, while commodity inventories are approaching ‘code red’. JPM oil traders see higher prices as the only long-term solution to curb demand.

• Cheap EU equity index hedges make sense, in vanilla or rates-hybrid formats. Let me know if you want to see the EDG desk’s pricing.

• Will global-equity dips be bought? Most likely. None of these risks looks large enough to end the cycle, while revisions remain solid, GDP growth is accelerating, and positioning is light. Kian, for example, sees an ideal backdrop for EU banks: i) a 2–3% ECB rate sweet spot, ii) stronger lending, iii) robust capital-markets activity, iv) cost discipline, and v) no material deterioration in asset quality.

• We see scope for AI infrastructure and bottlenecks to rebound, though Tech leadership should remain broader and more dispersed than in 1H26.

• OpenAI Astra triggered the AI-infrastructure rerating. Its strong cost-per-token efficiency on agentic tasks improves the economics, encouraging adoption and supporting infrastructure spending.

• That said, AGI is being invoked too freely to justify the market reaction. Re- grossing and its impact on alpha spreads—which we flagged last week—clearly also matter. Per aspera ad Astra aptly captures the P&L dynamic since late June.

• BoJ risk is showing up more in FX/rates than in Equities. About half of the unwind in USDJPY longs seem to have taken place already and technicals imply next major resistance at 152. Meanwhile, the upcoming budget might be a reminder of the structural issues for yen. • For Equities, the setup is not comparable to 2024 and Rie sees Japanese equities absorbing higher rates. Our Derivative Strategists in HK like low premium TPX call spreads or TPX-USDJPY hybrids to position for a post-BoJ grind higher.