Asia Market Quick Take – August 28, 2025

Key points:

• Macro: China seeks to triple output of AI chips to match Western rivals
• Equities:Nvidia down 3% post market after forecast shows slowing growth
• FX: Dollar index flat; losses versus CAD, GBP, CHF ahead of Friday’s PCE
• Commodities: Aluminium and copper fell while silver remains flat
• Fixed income: Treasury yield curve continues to steepen

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Disclaimer: Past performance does not indicate future performance.

Macro:

• China plans to triple AI chip production as DeepSeek competes with Western firms in advanced AI. A plant for Huawei's AI processors will start by year-end, with two more facilities launching next year.
• Germany's GfK Consumer Climate Indicator fell to -23.6 inAluminium and copper slipped as the dollar recovered earlier losses after President Donald Trump removed a Federal Reserve governor. Industrial metals eased on the LME while a dollar gauge advanced, making commodities pricier for non‑dollar buyers. By 10:25 a.m. London, LME copper was down 0.4% at $9,794 a ton and aluminium fell 0.8%, while iron ore rose 0.2% to $102.50 a ton. Aluminium and copper slipped as the dollar recovered earlier losses after President Donald Trump removed a Federal Reserve governor. Industrial metals eased on the LME while a dollar gauge advanced, making commodities pricier for non‑dollar buyers. By 10:25 a.m. London, LME copper was down 0.4% at $9,794 a ton and aluminium fell 0.8%, while iron ore rose 0.2% to $102.50 a ton. September 2025, down from -21.7, missing forecasts of -22.0 and marking the weakest level since April. Income outlook plunged to 4.1 from 15.2 amid job loss fears, inflation uncertainty, and U.S. trade policy impacts. Economic expectations dropped to 2.7, reaching a six-month low due to diminished recovery hopes.
• The average interest rate for 30-year fixed-rate U.S. mortgages rose to 6.69% for the week ending August 22, up from 6.68%. Total mortgage application volume dropped 0.5%, following a 1.4% decline the previous week.
• The number of registered unemployed in mainland France increased by 52.9k to 3.03 million in July 2025, the highest in four months. Unemployment rose across all age groups, including core-aged (+25.8 thousand), over 50 (+7.9 thousand), and under 25 (+19.2 thousand).
• India hopes the US will reconsider the 25% penalty on Russian oil purchases, according to Reuters sources. India plans to diversify exports and leverage free trade agreements with the UK, EFTA, and others.

Equities: 

• US - S&P 500 and Nasdaq gained 0.2%, with the S&P 500 hitting a record high, while the Dow rose 146 points as the market awaited the earnings from Nvidia, which is seen as pivotal for the bull market. MongoDB surged 38% and Okta rose 1.6% after strong AI-driven results boosted sentiment ahead of Nvidia’s report. Separately, Cracker Barrel jumped 8% after scrapping its new logo following backlash. After hours, U.S. futures slipped as Nvidia fell 3% despite beating Q2 estimates, with data center sales missing expectations. Nvidia reported no H20 chip sales to China and excluded future shipments from guidance. The weakness dragged AMD (-1.4%), Broadcom (-1.1%), and TSMC (-1.6%) lower.
• EU - European stocks edged higher Wednesday after two days of losses as investors weighed French political risks ahead of Nvidia’s earnings. France’s CAC 40 rose 0.4% after sharp declines on concerns over PM François Bayrou’s government. Chipmakers, including ASM International, BE Semiconductor, Infineon, and ASML (+1.5%), gained ahead of Nvidia’s report. German consumer sentiment fell for a third month on job and inflation worries. Mining and consumer stocks outperformed, while chemicals lagged. Givaudan slipped 0.8% after CEO Gilles Andrier announced retirement. Deutsche Bank and Commerzbank dropped after Goldman Sachs downgraded both following strong year-to-date gains.
• HK - Hong Kong stocks rose 0.2% to 25,565 in early trade Wednesday, rebounding from prior losses on strength in tech and consumer shares. Sentiment improved on a modest uptick in U.S. futures ahead of Nvidia’s earnings and Friday’s PCE data. In China, July industrial profits fell 1.5% YoY, easing from June’s 4.3% drop, while cumulative losses for the first seven months stood at 1.7%. Gains were capped by U.S. policy concerns after President Trump’s unprecedented firing of Fed Governor Lisa Cook. Hong Kong’s exports rose 14.3% YoY in July, but imports jumped 16.5%, widening the trade deficit. Top movers: Nongfu Spring (+7%), SMIC (+4.1%), Prada (+3.9%), Horizon Robotics (+2.5%), China Hongqiao (+2.3%).

Earnings this week:

• 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.