Asia Market Quick Take – August 18, 2025

Key points:

• Macro: Trump holds off tariffs on China regarding buying Russian oil
• Equities: UnitedHealth's 12% surge following Berkshire Hathaway's major stake
• FX: USD dipped, G10 currencies rose; JPY and EUR outperforming
• Commodities: Gold and oil remain under selling pressure
• Fixed income: US 30-year yield exceeds 5-year by 109 bps, the widest since 2021

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Trump met with Putin in Alaska, aligning on pursuing a peace deal. He will meet Zelenskiy and European leaders Monday to address Europe's deadliest war in 80 years. Trump postponed immediate tariffs on nations buying Russian oil, such as China, but may consider them soon.
• University of Michigan's US consumer sentiment dropped to 58.6 in August 2025 from 61.7 in July, below the expected 62, driven by inflation concerns and poor buying conditions for durable goods. Despite slight improvement in future personal finances, inflation and unemployment worries persist.
• US retail sales increased 0.5% in July 2025, matching forecasts after a 0.9% rise in June. Leading gains were motor vehicle & parts dealers (1.6%) and furniture stores (1.4%), with other increases in sporting goods, nonstore retailers, clothing stores, and gasoline stations.
• US industrial production fell 0.1% in July 2025, missing expectations of a flat result, after a revised 0.4% rise in June. Manufacturing output, comprising 78% of total production, rose 0.1% after a 0.3% increase in June.
• The Trump administration extended 50% tariffs on steel and aluminum to 407 more products, effective August 18. Non-steel and non-aluminum components remain under existing tariffs. President Trump hinted at more tariffs on steel and semiconductors.

Equities: 

• US - U.S. stocks ended mixed on Friday as investors absorbed economic data, corporate news, and geopolitical developments. The S&P 500 dipped 0.3% after reaching a record high, and the Nasdaq fell 0.4% due to chipmaker weaknesses, with Applied Materials dropping 14% and Nvidia down 0.9%. The Dow rose by 35 points after a record session, buoyed by UnitedHealth's 12% surge following Berkshire Hathaway's major stake disclosure. July retail sales grew by 0.5%, aligning with expectations, but consumer sentiment dropped to 58.6 from 61.7 amid inflation worries. Caution persisted ahead of Trump's meeting with Putin and looming tariffs on steel and semiconductors fueling trade uncertainty. Weekly gains saw the S&P 500 up 0.9%, Nasdaq up 0.8%, and Dow leading at a rise of 1.7%.
• EU - The Stoxx 50 and Stoxx 600 rose on Friday, marking a fourth consecutive session of gains as investors looked forward to the Trump-Putin summit in Alaska, hoping for progress on Ukraine. Despite mixed global data like weaker Chinese factory output and retail sales, sentiment remained optimistic. Pandora shares dropped 18.4% after reporting second-quarter organic sales up 8% to DKK 7.08B ($1.1B), slightly below forecasts, with US sales rising 12% but China falling 15%. The jeweler plans to close twice as many stores in China this year but maintained its 2025 growth and margin outlook. European stocks marked a second weekly gain, though enthusiasm for U.S. rate cuts waned after July’s PPI increased rapidly, lowering September cut odds to 90%.
• HK - Hang Seng Index fell 1% to 25,270 on Friday as all sectors were hit by weak Chinese economic data. Industrial output saw its slowest growth in eight months, retail sales reached a six-month low, and the unemployment rate climbed to a four-month high of 5.2%. Despite these challenges, the index rose 1.7% over the week thanks to Wall Street highs, potential September Fed rate cuts, and an extended US-China trade truce. Beijing unveiled measures to boost the economy by subsidizing consumer loans and having state firms purchase unsold homes from struggling developers. NetEase dropped 3.6% amid poor gaming revenue, while Sun Hung Kai Properties (-5.3%), Henderson Land (-4.8%), MTR Corp (-3.1%), Sunny Optical Tech (-2.8%), and Meituan (-2.3%) also experienced declines.
• SG - Straits Times Index fell by 0.6% to 4,230.53, with decliners outnumbering gainers 302 to 233 as 1.4 billion securities worth S$1.6 billion were traded. UOB dropped 2.8% to S$35.34, while DBS fell 1.2% to S$49.90, and OCBC edged down 0.1% to S$16.90. Both UOB and DBS went ex-dividend on Friday, impacting their prices.

Earnings this week:

• Monday: Hansoh Pharmaceutical (HKG: 3692), Pan Pacific International (TYO: 7532), Sino Biopharmaceutical (HKG: 1177), GD Power Development (SHA: 600795), Palo Alto Networks (PANW)
• Tuesday: Xiaomi (HKG: 1810), BHP (ASX: BHP), CSL (ASX: CSL), Pop Mart (HKG: 9992), Woodside (ASX: WDS), Home Depot (NYSE: HD), Amer Sports (AS), Viking Holdings (VIK)
• Wednesday: HKEX (HKG: 388), Jiangsu Hengrui (SHA: 600276), Transurban (ASX: TCL), Beijing Kingsoft Office (SHA: 688111), Henderson Land (HKG: 0012), Target (TGT), Estee Lauder (EL), TJX (TJX), Analog Devices (ADI)
• Thursday: Alibaba (HKG:9988), AIA (HKG: 1299), Sinopec (SHA: 600028), Goodman Group (ASX: GMG), Kuaishou (HKG: 1024), Sany Heavy (SHA: 600031), Walmart (WMT), Intuit (INTU), Workday (WDAY)
• Friday: Bank of Jiangsu (SHA: 600919), CRRC (SHA: 601766), China Coal (HKG: 1898), Hengli Petrochemical (SHE: 000703), China Vanke (SHE: 000002), BJ’s Wholesale Club (BJ)

FX:

• USD weakened after gaining from PPI data earlier in the week, remaining stable ahead of the Trump-Putin summit and Fed Chair Powell's Jackson Hole address. Import prices rose unexpectedly, but Fed's Goolsbee noted tariffs are excluded from this data.
• G10 currencies strengthened against the Dollar, led by the JPY and EUR. EURUSD traded above 1.17, with upcoming Eurozone PMI data being pivotal. Japan's Q2 GDP exceeded forecasts, boosting the Yen marginally, as USDJPY dropped to 146.75 from 147.86.
• GBP had few drivers, but inflation data, flash PMIs, and retail sales are upcoming. After the August BoE rate cut, dissent due to inflation pressures has shifted focus to CPI data. There's currently a 28% chance of a rate cut in November, with March being the next fully priced reduction.
• AUD and NZD saw slight gains, despite weak Chinese retail sales falling short of Wall Street forecasts.
• Economic Calendar - EU Balance of Trade, Canada Housing Starts, US NAHB Housing Market Index

Commodities:

• Oil prices dropped as traders focused on Trump's meeting with Zelenskiy, with U.S. urging Ukraine to negotiate a peace deal with Russia. Brent fell below $66, and WTI was near $63. European leaders will join the Washington meeting.
• Gold continued its weekly decline as Trump's tariffs sparked inflationary pressure, potentially affecting rate cuts. Trading near $3,340 an ounce, bullion fell 1.8% this week. With U.S. wholesale inflation accelerating, traders reduced expectations for a Fed rate cut, as higher borrowing costs negatively impact non-yielding gold.

Fixed income:

• Treasury yields rose due to a significant curve-steepening selloff in European bond markets, with German and French 30-year yield highs. The U.S. 5s30s spread widened to levels from 2021, fueled by a block trade sale of Ultra Bond futures and upward revisions to July retail sales. U.S. 30-year yields increased by about 5 basis points, while UK and German yields rose by 7 and 8 basis points, respectively. Foreign investor holdings of Treasuries reached a record $9.13 trillion in June, with notable increases from Britain, Belgium, and Japan, while India and Ireland saw declines.

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