Asia markets mixed after the US reached the debt ceiling agreement; Japanese stocks hit their highest level since July 1990

The Turkish lira fell against the US dollar as Recep Tayyip Erdogan won the 2023 presidential election, extending his rule into a third decade in power.

The coin was trading at 19.97 to the dollar as of Monday at 4 am London time.

“We have a very pessimistic view of the Turkish lira as a result of Erdogan retaining his position after the election,” Brendan McKenna, emerging markets economist at Wells Fargo and forex strategist, told CNBC’s “Squawk Box Asia.”

“It is a very bleak economic and market outlook for Turkey,” McKenna added, predicting that the lira would reach a new record high of 23 against the dollar by the end of the second quarter.

– Lee Ying Chan

Jeremy Siegel, a professor at the Wharton School, said he worries that tougher lending standards could combine with the US Federal Reserve’s “massive tightening” to hurt small and medium-sized businesses later this year.

“I think the smart money has really settled in that there will be a (debt ceiling) deal, so it illustrates a little bit of uncertainty, but there are a lot of concerns going forward about the Fed’s massive tightening,” Siegel said. CNBC Monday.

He added that “the problems of banks will not lead to a crisis of bank deposits, but to tighten lending standards, especially for small and medium-sized companies.” “And I’m worried about the second half of the year and maybe what we might see now is a focus on those problems.”

– Clement Tan

Japanese trading and distribution services and technology stocks were the top gainers on Japan’s Nikkei 225 on Monday, with the index jumping 2% at the open and finally trading 1.32% higher.

Nikon optics and imaging was the biggest gainer on the index, advancing 4.51%, while semiconductor equipment manufacturer Advantest was the second biggest gainer, up 4.18%.

Other names on the list of gainers included trading companies Sumitomo Corporation and Mitsubishi, as well as Softbank Group.

Deloitte China told CNBC that the recent drop in industrial profits in China provides an argument for its central bank to cut interest rates.

“There is no inflation in China, and therefore you need looser monetary policy,” said Setao Xu, chief China economist for Deloitte, in an interview with CNBC’s “Squawk Box Asia” Monday.

He noted that the PBOC’s daily USD/CNY reference rate, or fixed midpoint, works similarly to an interest rate cut.

“If you look at the recent change in the exchange rate, the effect is the same as the interest rate drop,” he told CNBC.

On Monday, the People’s Bank of China set the yuan to peg at 7.0575 compared to the previous session’s 7.0760 against the US dollar.

– Jihe Lee

Artificial intelligence has stormed the investment world since early this year — thanks in large part to the advent of ChatGPT, which has set off a wave of buying into AI-related stocks.

Is it here to stay or just hype?

Bull and Bear faced off on CNBC’s “Street Signs Asia,” telling investors how they can navigate the dilemma, as well as which stocks will play in the direction.

CNBC Pro subscribers can read more here.

– Wizen tan

Singapore state-owned investor Temasek has cut compensation for senior management and the investment team responsible for recommending investments in failed cryptocurrency exchange FTX.

“Although there was no misconduct by the investment team in accessing their investment recommendations, the investment team and senior management, who are ultimately responsible for the investment decisions made, were collectively held liable and reduced their compensation.” President Lim Boon Heung he said in a statement.

The move by Temasek comes after it launched an internal review to look at its investment in FTX, which resulted in a $275 million writedown.

Lim added that there was fraudulent behavior by FTX that was “intentionally hidden from investors, including Temasek.” The statement did not specify the number of employees affected nor the severity of the pay cuts.

– Lim Hwi Ji

Cleveland Federal Reserve President Loretta Mester told CNBC on Friday that she expects more interest rate increases will be needed as inflation continues to rise.

“When I look at the data and look at what’s going on with the inflation numbers, I think we’re going to have to tighten up a little bit more,” Meester said on “Squawk on the Street.” “We’ve made progress. Now this is calibration training, and this is the hard one.”

Mester is a non-voting member this year of the Federal Open Market Committee, which sets interest rates.

– Jeff Cox

The core personal consumption expenditures index, the Fed’s preferred measure of inflation, rose 0.4% in April. That’s more than economists polled by Dow Jones expected. On a year over year basis, core personal consumption expenditures rose 4.7%, also more than expected.

– Fred Imbert

Markets have raised bets on a June rate hike from the Federal Reserve after hotter-than-expected inflation data Friday morning.

The odds of a quarter percentage point increase jumped to 56%, according to CME Group data. This came after a report showed that personal consumption expenditures prices rose 0.4% in April and 4.7% from a year ago.

The chances of an increase were only 17% a week ago. The probability of a price hike no later than July has increased to 75%.

– Jeff Cox

The final reading of consumer confidence in May was slightly above expectations. University of Michigan consumer confidence index It came in at 59.2, while economists polled by Dow Jones had expected a reading of 57.7.

This level is certainly much lower than the 63.5 in April.

“Consumer sentiment fell 7% amid concerns about the economy’s path, erasing nearly half of the gains made after an all-time low last June. The drop reflects the 2011 debt-ceiling crisis, during which sentiment also slumped.” According to the polls, consumer director Joanne Hsu writes.

– Fred Imbert