US equities delivered another strong session, with the S&P 500 rising 0.5% to close at a fresh record of 6,227. Small‑caps led the charge, as the Russell 2000 jumped 1.31%, clearing its 200-day moving average for a second straight day, evidence that the post “Liberation Day” rebound has broadened beyond mega‑cap tech.
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Asia Pacific stock markets falter on slowing China Services PMI and trade tensions
In contrast, Asian shares weakened intraday. Hong Kong’s Hang Seng Index fell 1%, while the Hang Seng China Enterprises Index plunged 1.4% after China’s Caixin Services PMI dropped to a nine-month low of 50.6 (May: 51.1; consensus: 51.0).
Meanwhile, President Trump’s announcement of a US‑Vietnam trade deal, including a 40% levy on goods transshipped via Vietnam—threatens to draw China into a new round of tit‑for‑tat tariffs, potentially weighing further on regional equities.
GBP under pressure on UK fiscal uncertainty
The pound was the worst-performing major currency on Wednesday, sliding 0.8% against the dollar amid concerns over UK public finances. Prime Minister Starmer’s refusal to confirm Chancellor Reeves’s future role raised fears that a successor might abandon the government’s fiscal rules, widening the deficit. In today’s Asia session, GBP/USD extended losses to 1.3628.
Aussie dollar underperforms
In today’s Asia session, the worst performer has been the high beta Aussie dollar, where it shed -0.3% against the US dollar due to the weak China Caixin Service PMI print and the risk of China’s retaliation measures towards the US over the 40% levy on transhipped Vietnamese goods in the US-Vietnam trade deal.
Read more in our previous Chart of the day – Potential bullish breakout in AUD/US
Gold consolidates ahead of key US Data
Gold (XAU/USD) remains range-bound between its 20‑ and 50‑day moving averages (US$3,360–3,318) as markets await today’s US non-farm payrolls and ISM Services PMI releases.
Economic data releases
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Fig 1: Key data for today’s Asia mid-session (Source: MarketPulse)
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Chart of the day – AUD/USD at risk of minor setback before new bullish leg
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Fig 2: AUD/USD minor trend as of 3 July 2025 (Source: TradingView)
The recent 3.4% rally seen on the AUD/USD from the 23 June 2025 swing low of 0.6373 is coming close to an inflection level of 0.6600, where it faces the risk of a minor corrective setback before a new bullish up move sequence materialises.
In addition, the hourly RSI momentum oscillator remains capped by a parallel descending resistance at around the 63 level since Wednesday, 2 July, US session, which suggests a lack of bullish momentum.
Watch the 0.6600 key short-term pivotal resistance on the AUD/USD with the next intermediate supports coming in at 0.6530 and 0.6510 (also the 20-day moving average and the pull-back of the former 8-week range resistance) (see Fig 2).
On the other hand, a clearance above 0.6600 invalidates the corrective setback scenario for the continuation of the bullish impulsive movement to expose the intermediate resistances at 0.6630/6645 and 0.6690.
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