JPM JPM International Ma

20 SECONDS: • MoU Mia, here we go again. Trump said new Iran talks resume today after calling off a planned strike. Iran-Oman negotiations over the Strait are in the final stages. Odds of SoH normalization by YE rose 8%pts and Brent fell 5%. Our view is unchanged and still anchored in military realities.

• We think the AI/MOMO factor correction is over but on the way up, the surprise could be higher thematic dispersion. Hyperscalers have reassured on AI demand (cloud ARR, backlog surge, ROI frameworks), while the market seems to have shrugged off Qwen 3.8-Max. • We took down factor hedges and think one should add directional AI exposure via consensus longs while looking at structural shorts that have squeezed, notably in Europe. • Macro remains supportive — Asia July PMIs at fresh highs, Q2 earnings tracking strong and Schlegel’s TPM attractive — but the risk to hedge now is likely Fed credibility / long-end rates volatility (Warsh even floated fewer FOMC meetings). History says the next 10–20bp higher in 10Y USTs could pressure Equity indices, especially if DXY is lower too. • Gold remains one hedge. Upside is capped for now, but Tether and central-bank demand are coming back. As gold stabilizes, 3–6m carry-efficient upside via call spreads/ratios looks attractive.

• JPM’s Tanase is out with a timely note on US-Japan coordinated yen-buying intervention — the first since 1998. Key points: 1) USD/JPY returned to pre-intervention levels in the weeks after June 1998; 2) US yen-buying versus EUR suggests this is not a “second Plaza Accord,” but driven by broader considerations; 3) the probability of coordinated intervention driving USD/JPY below 150 is low. Targets are unchanged: 3Q26 160, 4Q26 164, 2Q27 164.

• July Politburo confirmed industrial policy remains front and centre, while consumption support remains largely supply-side. JPM’s Erin Zhang sees the “six networks” initiative as the policy centrepiece — an Rmb7trn+ investment programme this year across AI, grid, telecoms, water, urban pipelines and logistics. Names exposed are in the note.

CATALYSTS incl. S&P Global F PMIs; China Trade & Foreign Reserves; US ISM, Unemployment, NFPs. Key tech reporters: PLTR, AMD, SNDK. Robotics IPO in China