Global Market Quick Take: Asia – March 3, 2025

Key points:

• Macro: Trump announces a digital assets strategic reserve on Sunday
• Equities: Nasdaq 100 recovers, gaining 1.6% on Friday to close the week.
• FX: AUDUSD is down for the sixth session in a row
• Commodities: Gold marked its first weekly decline of 2025
• Fixed income: 30-year Treasury yield hit below 4.5%, the lowest since December 12

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Disclaimer: Past performance does not indicate future performance.

Macro:

• China's NBS Manufacturing PMI rose to 50.2 in February 2025, indicating expansion for the first time in three months. This improvement was driven by post-Lunar New Year activity resumption and Beijing's stimulus measures. Output, new orders, and buying levels increased, while declines in foreign orders and employment eased. Input costs rose, and the drop in selling prices slowed. We look forward to the National People Congress on Wednesday this week where China will unveil the economic plan for 2025.
• US President Trump will host the first White House cryptocurrency summit on March 7th. He mentioned that the executive order on digital assets includes a strategic reserve featuring XRP, Sol, and ADA. Trump also highlighted that BTC and ETH, as key cryptocurrencies, will be central to the reserve and expressed his admiration for Bitcoin and Ethereum.
• US Commerce Secretary Lutnick stated that Mexico and Canada have managed the border reasonably well. However, tariffs on Canada and Mexico will be imposed on Tuesday, March 4^th, with President Trump determining the levels. Lutnick also mentioned that tariffs on China will proceed unless they stop fentanyl trafficking into the US.

Equities: 

• US - US equities closed higher on Friday, with the S&P 500 and Nasdaq each gaining 1.6%, and the Dow rising by 601 points. The market briefly dipped due to a tense exchange between President Trump and President Zelenskyy, raising geopolitical concerns. Trump's tariff threats against China added to the uncertainty, particularly for Big Tech. Nvidia rose 0.6%, recovering from an 8.5% drop despite strong earnings, while Tesla gained 3.9%, ending six days of losses amid concerns over CEO Elon Musk's political stance. Despite the gains, the S&P 500 and Nasdaq had their worst monthly declines since April 2024 and September 2023, respectively, down 1.4% and 4%, with the Dow losing 2.2%.
• EU - European stocks closed slightly lower on Friday after a volatile week. Tech shares led the losses, with ASML and Infineon dropping 3.1% and 2.2%, respectively. Auto manufacturers recovered some losses, with Stellantis gaining 1%. BASF rose over 1% on optimistic guidance, and Saint Gobain jumped 2% after strong results. For the month, both the STOXX 50 and STOXX 600 advanced by 3.2%, outperforming US counterparts.
• HK - HSI dropped 1.3% to 23,415, and the CSI 300 fell 2% as the US announced a 10% tariff on Chinese imports and 25% levies on Canadian and Mexican products. Hang Seng Index saw its first weekly drop in seven weeks, with tech stocks tumbling over 2.5%. Horizon Robotics led the losses with an 8.2% drop, followed by Longfor Group (-4.1%), Geely Auto (-3.4%), and Sunny Optical Tech (-2.8%).

Earnings this week:

• Monday: No notable earnings
• Tuesday: Target, CrowdStrike, Flutter, Sea, On Holding
• Wednesday: Zscaler, Marvell, Campbell, Foot Locker
• Thursday: Broadcom, Costco, BJ’s Wholesale Club, JD.com, Gap
• Friday: No notable earnings

FX:

• USD strengthened broadly after a contentious meeting between US President Trump and Ukrainian President Zelensky. Dollar Index (DXY) traded higher around 107.3. Trump accused Zelensky of risking World War III. A minerals deal wasn't signed, and a joint press conference was cancelled. European leaders showed solidarity with Ukraine.
• EUR rose above 1.42 against the dollar after European leaders pledged to increase defence spending and support Ukraine.
• The risk-off sentiment hit the AUD hardest, with AUDUSD falling for the sixth straight session, dropping below 0.62.
• JPY didn't show its usual haven strength due to a softer-than-expected Tokyo CPI of 2.9% (expected 3.3%, previous 3.4%), ending the week around 150.50 against the USD.
• GBP and CAD outperformed, with GBPUSD around 1.2570.
• Major economic data: China Caixin manufacturing PMI, Eurozone inflation rate, US ISM manufacturing PMI

Commodities:

• Oil prices rose as the market anticipated Trump's tariffs on major US trading partners and possible retaliation. Brent topped $73 a barrel, with WTI near $70. Tariffs on China, Mexico, and Canada are set for Tuesday but might be briefly delayed.
• Gold rose as investors weighed Trump's tariffs on key trade partners. Trading near $2,870 an ounce, it saw its first weekly loss of 2025.

Fixed income:

• Treasuries, especially front-end, rose as Fed swaps expected easing in June. The yield curve steepened with slowing PCE indexes and falling personal spending, lowering Q1 growth forecasts. The 10-year yield hit 4.23%. Fed swaps priced in 25 basis points of easing by June and 8 for May. Hedge funds covered net duration shorts for the third week, according to CFTC data.

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