Asia Market Quick Take – August 27, 2025

Key points:

• Macro: US durable goods falls less than expected and Lisa Cook challenges Trump
• Equities: France’s CAC40 fell 1.7% on political turmoil; Sept 8 confidence vote ahead
• FX: Dollar softer before data; G10 firmer; GBP, EUR gained
• Commodities: Oil dropped sharply, its most since early August, as gold rallied
• Fixed income: Spread between 5-year and 30-year yields hit its steepest level since 2021

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Disclaimer: Past performance does not indicate future performance.

Macro:

• U.S. durable goods orders dropped 2.8% to $302.8 billion in July 2025, following a revised 9.4% fall in June and slightly better than the expected 4% decline. Firms had front-loaded imports in May to avoid new tariffs.
• Dallas Fed's business activity index rose 4.8 points to 6.8 in August 2025, its highest since January. The revenue index increased to 8.6, while the employment index fell slightly to 1.2, indicating stable labor conditions. Business sentiment improved, with the outlook index turning positive at 4.3 for the first time in six months.
• The S&P CoreLogic Case-Shiller 20-City Home Price Index increased 2.1% year-on-year in June 2025, down from 2.8% in May and matching expectations. This marks the slowest growth since July 2023 due to high mortgage rates and ample housing inventory reducing buyer competition.
• The Federal Reserve stated that its governors can only be removed "for cause," ensuring its independence. This follows Trump's attempt to oust Governor Lisa Cook over alleged mortgage document falsification. Cook plans to legally challenge her removal to remain on the Board.

Equities: 

• US - The S&P 500 rose 0.4% Tuesday, driven by Nvidia gains, as investors weighed strong earnings optimism against concerns over President Trump’s unprecedented removal of Fed Governor Lisa Cook. The Dow added 135 points, and the Nasdaq climbed 0.4%. Nvidia gained 1.1% ahead of its earnings report, while Eli Lilly surged 5.8% on positive results for its experimental diabetes pill. Industrials led gains despite declines in energy and consumer staples. Trump’s move to oust Cook over alleged mortgage issues raised fears about Fed independence, with Cook vowing a legal challenge. MongoDB Inc rose 30% post market after reporting strong revenue and earnings that beat estimates.
• EU - European stocks fell sharply Tuesday, with the Stoxx 50 down 1.1%. France’s CAC 40 slid 1.6% as political turmoil deepened after PM Francois Bayrou called a Sept. 8 confidence vote that could topple his government. Opposition parties vowed to vote against him, adding to market jitters. The FTSE 100 dropped 0.6% after reopening from a holiday. Broader markets remain pressured by weak growth and geopolitical risks. Commerzbank sank over 6% after a BofA downgrade, while Orsted rebounded 2% following record losses tied to a halted U.S. wind project.
• HK - Hang Seng dipped 1.2% to close at 25,525 on Tuesday, swinging from a two-day winning streak amid broad-based declines. Sentiment soured after U.S. futures dropped sharply, following President Trump’s removal of Fed Governor Lisa Cook and threats of “200% tariffs” on China if rare-earth magnet exports are restricted. Trump also vowed retaliation against countries regulating U.S. Big Tech. The index pulled back from a near four-year high, as concerns grew that mainland stocks may be losing steam after a months-long rally that lifted the Shanghai Composite to a decade high. Haidilao sank 2.8% after H1 earnings missed estimates, while Innovent Biologics (-4.1%), China Unicom (-3.6%), SMIC (-3.3%), and Dongfeng Motor (-1.7%) also posted steep losses.
• SG - Straits Times Index edged up 0.1% to 4,256.49. Mapletree Logistics Trust led gainers, rising 3.4% to S$1.22, while DBS Bank was the biggest decliner, slipping 1.0% to S$50.33. Thomson Medical Group surged nearly 40% after news of an RM18 billion (US$4.3 billion) Johor mega project, opening at S$0.065 from S$0.049 previously and reaching an intraday high of S$0.068.

Earnings this week:

• Wednesday: Nvidia, China Life Insurance, Meituan, China Citic Bank, Shanghai Pudong Development Bank, PICC Property & Casualty, Royal Bank of Canada, CrowdStrike, Snowflake, Veeva Systems.
• Thursday: Industrial Bank, Wesfarmers, Citic Securities, China Pacific Insurance Group, Haier Smart Home, TD Bank, Dell Technologies, Canadian Imperial Bank of Commerce, Pernod Ricard.
• Friday: Alibaba, Bank of China, BYD, China Shenhua Energy, China Yangtze Power, Ackermans, CPI Property Group, BRP, Frontline, KBC Ancora.

FX:

• USD lower as markets await Nvidia earnings, US GDP and PCE. US data leaned firmer: durable goods declined less than forecast and consumer confidence beat. Political noise flared after President Trump posted a letter saying he had removed Fed Governor Lisa Cook; Cook said there is no cause, and she will not resign.
• G‑10 mostly firmer versus the greenback. In the UK, BoE hawk Catherine Mann backed a more persistent hold on Bank Rate; GBPUSD traded 1.3480. The EUR held steady despite renewed France risk, with PM Bayrou seeking an 8 Sept confidence vote on fiscal plans; EURUSD 1.1640.
• AUD and NZD edged higher but gains were capped amid softer risk appetite. RBA minutes flagged a strong case for a 25 bp cut and signalled further easing likely over the year.
• USDJPY briefly hit 147.00 on the Cook headlines before retracing.
• Economic Calendar - Australia Monthly CPI Indicator, Germany Gfk Consumer Confidence, France Unemployment Benefit Claims, US MBA 30-year Mortgage Rate, Fed Barkin Speech

Commodities:

• Oil steadied after its largest drop since early August, as investors anticipated higher US tariffs on India for purchasing Russian crude. Brent traded near $67 a barrel and WTI above $63. The US will double some tariffs on Indian goods to 50%, but Indian refiners plan to maintain most of their purchases.
• Gold held steady after rising amid concerns over central bank independence and inflation as Trump moved to oust a Fed governor. Trading above $3,390 an ounce, Trump faces a legal battle with Lisa Cook on mortgage fraud allegations. Success could give him a majority on the Board of Governors, supporting his rate cut agenda.

Fixed income:

• Treasuries ended mixed, with a notably steeper yield curve. Front-end yields fell to session lows following strong demand for 2-year notes during the week's first coupon auction. Long-dated yields rose slightly, easing from larger increases driven by threats to central-bank independence amid President Trump's effort to remove a Fed governor. The 5s30s spread widened by 6 basis points to 116 basis points, peaking intraday at 117.5 basis points, marking the steepest level since 2021.

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