Morning Note: Strong US Data, TSMC Lift Markets; US House Passes Crypto Bills

Strong U.S. Data, TSMC Surge Lift Global Markets

A fresh round of strong U.S. economic data, including robust retail sales and a solid Philly Fed business index, boosted risk appetite on Thursday. Despite ongoing tensions between President Trump and Fed Chair Jerome Powell, as well as uncertainty over tariffs, investors shifted their focus to the economy's underlying strength. The upbeat data helped push the S&P 500 and Nasdaq to new record highs, easing inflation concerns and reinforcing confidence in the current expansion.

Meanwhile, global markets received an additional lift from Taiwan’s TSMC, the leading maker of advanced AI chips. The company posted record quarterly profits and noted growing demand for artificial intelligence technology. Its Taiwan-listed shares climbed to a six-month high, while its U.S.-listed stock surged over 4% to hit a new all-time peak, further boosting investor sentiment worldwide.

(S&P 500 Index Daily Chart, Source: Trading View)

From a technical analysis perspective, the S&P 500 index has been in a bullish trend since April 2025, as evidenced by a series of higher highs and higher lows. Yesterday, it broke above the consolidation zone of 6,220 – 6,280 with strong bullish momentum, indicating that bullish forces remain intact. This valid bullish structure may potentially continue to drive the index higher.

U.S. House Approves Crypto Regulation Bills

The U.S. House of Representatives approved a bill on Thursday to establish a regulatory framework for stablecoins, cryptocurrencies pegged to the U.S. dollar. The bill now heads to President Donald Trump, who is expected to sign it into law. This marks a major milestone for the digital asset industry, which has long advocated for federal rules and supported pro-crypto candidates in past elections.

Additionally, the House passed two other crypto-related bills, which are now awaiting Senate review. One sets a broader framework for digital asset regulation, while the other seeks to prohibit the issuance of a U.S. central bank digital currency (CBDC). Together, these moves represent a significant shift in the U.S. approach to crypto oversight.

(Ethereum Daily Price Chart, Source: Trading View)

From a technical analysis perspective, Ethereum has recently broken above the consolidation zone of 2,180 – 2,850 with significant bullish momentum, further driving the price upward. At the time of writing, it is trading at $3,585 and approaching the order block at 3,660 – 3,740. If it breaks above this level, the price may potentially continue rising to retest the resistance zone at 4,030 – 4,120.

Japan Vote May Shake Markets and Tariff Talks

Japan’s fragile minority government faces a crucial test in Sunday’s upper house election, with forecasts indicating that Prime Minister Shigeru Ishiba’s ruling coalition may lose its majority. The Liberal Democratic Party (LDP) and its partner Komeito must secure at least 50 of the 125 contested seats to maintain control. Although the vote doesn’t directly threaten Ishiba’s position, it may weaken his authority and force him to rely on opposition parties, many of whom advocate for expansive fiscal spending, raising concerns about a potential sell-off in Japanese government bonds.

A loss could further destabilise Japan’s political landscape and rattle investor confidence in the world’s fourth-largest economy. Some analysts warn that in a worst-case scenario, Ishiba could be pressured to resign, triggering political uncertainty just as Tokyo approaches an August 1 deadline to avoid steep U.S. tariffs. The outcome of the election could complicate key trade negotiations and deepen Japan’s economic vulnerabilities.

(USD/JPY Daily Chart, Source: Trading View)

From a technical analysis perspective, the USD/JPY currency pair has been in a bullish trend after recently rebounding from the support zone of 142.10 – 142.70. It broke above the resistance zone, pulled back to retest it, found support, and managed to close above the zone, indicating that bullish momentum remains intact. Therefore, this valid bullish structure may potentially continue to drive the pair upward to retest the order block at 150.60 – 151.10.

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