Asia Market Quick Take – August 20, 2025

Key points:

• Macro: US housing starts rise 5.2% and China lifts some curbs on India
• Equities: US markets down led by tech sell off; Nasdaq 100 down 1.4%
• FX: USD slightly higher; focus on FOMC Minutes tonight
• Commodities: Oil steadied after U.S. crude stockpiles dropped 2.4 million barrels
• Fixed income: Treasuries bounced back, ending a three-day losing streak

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Disclaimer: Past performance does not indicate future performance.

Macro:

• U.S. housing starts rose 5.2% in July 2025 to an annualized rate of 1.428 million, beating expectations of a drop to 1.29 million. This marks the strongest pace in five months and follows a revised 5.9% gain in June. Growth was led by multi-unit housing (up 11.6% to 470K), outpacing single-unit starts (up 2.8% to 939K).
• Canada’s annual inflation eased to 1.7% in July, below forecasts and the BoC’s 2% target for the fourth straight month. Falling gasoline prices, down 16.1%, were the main drag, while food and shelter costs rose to 3.3% and 3%, respectively. Excluding gas, inflation held steady at 2.5%. 
• Japan’s trade deficit narrowed to JPY 117.6 billion in July, down from JPY 628.3 billion a year earlier but missing forecasts for a surplus. Exports fell 2.6%—the steepest drop since Feb 2021—due to U.S. tariffs, while imports declined 7.5%, less than expected.
• China has lifted export curbs on rare earth magnets, fertilizers, and tunnel boring machines to India, confirmed during Foreign Minister Wang Yi’s visit, where he assured India of support in meeting these needs.

Equities: 

• US - US stocks mostly fell Tuesday as tech losses weighed on markets. The S&P 500 dropped 0.6%, and the Nasdaq 100 slid 1.4%—its lowest in over two weeks—on sharp declines in chipmakers. Nvidia sank 3.5%, AMD 5.4%, and Broadcom 3.6%, while Palantir plunged 9.3%, the S&P 500’s worst performer. The Dow ended flat after briefly hitting a record high. On the upside, Home Depot rose 3.2% despite missing earnings, supported by housing demand. Intel jumped 7% after SoftBank’s $2B investment boosted turnaround hopes. Investors now await Fed Chair Powell’s remarks at Jackson Hole on Friday for clues on September policy and potential rate cuts.
• EU - European stocks surged Tuesday to their highest since March on hopes of ending the Russia-Ukraine war. The STOXX 50 rose 0.9% to 5,486, while the STOXX 600 gained 0.7% to 558 after European leaders met with Presidents Trump and Zelensky in Washington, signaling security guarantees for Ukraine. Consumer discretionary led gains: LVMH and Kering climbed 3%, Stellantis 3.2%, and Mercedes-Benz 2.7%. Mediobanca advanced after approval to acquire Banca Generali, creating Italy’s third-largest lender. Defense stocks fell over 4% as peace optimism weighed on Rheinmetall, BAE Systems, and Thales.
• HK - Hang Seng Index slipped 0.2% to 25,123 Tuesday, its fourth straight loss and lowest in nearly three weeks. Caution prevailed ahead of the PBoC’s loan prime rate decision and the Fed’s Jackson Hole meeting. China’s youth unemployment jumped to 17.8% in July, the highest since Aug 2024, and overall jobless rate rose to 5.2%. Losses were led by tech, financials, and consumer stocks: Li Auto fell 2.4%, SMIC 3.8%, and pharma names like Sino Biopharma (-5.4%) and Innovent (-4%). Xiaomi reported Q2 revenue that grew 31% yoy to 116b yuan, beating expectations and propelled by strong smartphone demand, and growing EV business. Pop mart also reported H1 revenue growth of 204% to 13.9b yuan and 397% profit jump as the firm expands globally, beating all estimates.
• SG - Straits Times Index climbed 0.7% to close at 4,216.19. Jardine Matheson Holdings led gains, rising 4.2% to US$59.43, while ST Engineering was the biggest decliner for a second straight session, falling 1.8% to S$7.99, despite reporting a 19.7% increase in first-half earnings last week.

Earnings this week:

• 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 gained slightly Tuesday with DXY trading around 98.30 as mixed U.S. housing data—permits down, starts up—failed to shift the quiet tone ahead of FOMC Minutes (Wed) and Powell’s Jackson Hole speech (Fri).
• JPY outperformed on risk-off, with USDJPY sliding to 147.45 from 148.11. AUD, NZD, CAD lagged; CAD pressured by soft CPI, antipodeans cautious before RBNZ. EUR, GBP, CHF eased modestly; UK CPI due Wednesday.
• CNH steady before PBoC LPR, expected unchanged at 3.00%/3.50%.
• Economic Calendar - China Loan Prime Rate, RBA Jones Speech, RBNZ Interest Rate Decision, Germany PPI, UK Inflation Rate, US MBA 30-year Mortgage Rate, Canada New Housing Price Index, US FOMC Minutes

Commodities:

• Oil prices steadied as U.S. crude inventories fell by 2.4 million barrels, according to the American Petroleum Institute. WTI hovered near $63, rebounding from Tuesday’s 1.7% drop, while Brent settled below $66. Investors are watching for official data due Wednesday and tracking developments in Ukraine-Russia ceasefire talks.
• Gold slipped as traders weighed U.S.-led peace efforts in Ukraine and awaited the Fed’s Jackson Hole meeting, where Chair Jerome Powell is set to speak Friday.

Fixed income:

• Treasuries rebounded, ending a three-day slide, as traders held firm on rate-cut bets ahead of Fed Chair Jerome Powell’s speech. The 10-year yield fell to 4.30%, reversing losses triggered by last week’s wholesale inflation spike. Interest-rate swaps now reflect an 80% chance of a September policy easing, with options positioning for a cut of more than 25 basis points. SOFR-linked trades have surged since early August, targeting a 50 basis point reduction.

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