Positioning In Asia Pacific For The Second Half

UBS maintains a constructive view on Asian assets, driven by persistent AI capex and strong regional corporate earnings potential. The firm recommends a selective approach to currencies and credit given the 'tighter-for-longer' Federal Reserve stance.

Key Takeaways

• 1.AI infrastructure spending is expected to remain the primary driver of earnings for the Asian region, supported by US hyperscaler capex.
• 2.The firm sees upside for Asia ex-Japan and Japan equities, though China technology was downgraded to Attractive.
• 3.Asia credit risk-reward is attractive due to defensive composition and modest duration amidst Federal Reserve tightening fears.

Table of Contents

• From Circle One
• What to watch: 22 June
• Thought of the day
• Caught our attention
• Market update
• Global asset class preferences definitions
• Appendix

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