Asia Market Quick Take – October 22, 2025

Key points:

• Macro: Japan’s exports rose 4.2%, first time since April
• Equities: Dow outperforms on Coca cola earnings; NFLX down 6.5% after earnings miss
• FX: USD strengthened; JPY weakens post-election
• Commodities: Spot gold down 6.3%, biggest one-day drop since Apr 2013
• Fixed income: Treasuries rose; 30-year led as long-end yields hit April lows

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Trump said that the highly anticipated talks with Xi may not happen, and reiterated that China tariffs will be 155% as of Nov 1.
• The ECB's pre-meeting blackout begins Thursday before its rate decision. The US dollar gained on easing US-China tensions and hopes of ending the government shutdown. Treasury Secretary Bessent and Chinese Vice Premier Lifeng will meet to discuss tariffs. Traders bet on policy easing by the ECB and Fed.
• Japan's exports rose 4.2% year-on-year in September 2025, the first increase since April but below the expected 4.6%. Historically, exports averaged 7.81% annually from 1964 to 2025, peaking at 89.20% in August 1974 and hitting a low of -49.40% in February 2009.
• Canada's inflation rose to 2.4% in September 2025, exceeding the expected 2.3% and marking a high since February. Gasoline deflation eased, raising transportation costs by 1.5%. Food inflation climbed to 3.8% due to higher grocery prices, especially for vegetables and sugar. Inflation increased for household operations and recreation, while mean core inflation remained at a one-year high of 3.2%.
• Taiwanese export orders surged 30.5% year-on-year to USD 70.2 billion in September 2025, well above the expected 17.8%, due to strong AI demand. Orders rose for various products, including electronics and machinery, with significant rebounds for electrical machinery and minerals. Textile orders still fell. Exports increased notably to ASEAN, the US, Japan, and Europe.

Equities: 

• US - The Dow gained 240 points to a record high, while the S&P 500 and Nasdaq edged higher on upbeat results. General Motors soared 16% after raising guidance, Coca-Cola climbed 3.8% on solid demand and its India bottling deal, and 3M advanced 6.3% after beating estimates. Defense names outperformed, with Raytheon up 8.2% and GE Aerospace 1.3%. Danaher rose 6.6% on strong Q3 results, while Warner Bros Discovery surged 11% on sale rumors. Beyond meat soared 146% after being added to Roundhill Meme Stock ETF. In the after hours, Netflix fell 6.5% after it reported earnings that missed targets due to a one-time $619M Brazilian tax expense. Google also gained 3.1% after announcing a potential cloud computing deal with Anthropic worth tens of billions.
• EU - European stocks edged higher Tuesday, extending record highs with gains in defense, aerospace, and luxury sectors. The STOXX 50 rose 0.2% to 5,691, while the STOXX 600 added 0.3% to 574. Hermes climbed 1.5%, lifting its five-session rally to 11% on margin optimism, while Ferrari and LVMH gained over 0.7%. Airbus and Safran advanced nearly 2% each, tracking global aerospace strength after GE Aerospace’s strong Q3 results. Stellantis surged 5% on robust September sales. Novo Nordisk fell over 1% after Chairman Lund announced his exit amid board disputes. L’Oréal ticked higher ahead of earnings after the bell.
• HK – Hang Seng rose 0.7%, to 26,028 on Tuesday, marking its second consecutive gain as most sectors advanced. Optimism grew on signs of easing U.S.-China trade tensions ahead of Trump’s expected meeting with Xi Jinping next week. In China, weak Q3 GDP fueled stimulus expectations as policymakers prepare the new Five-Year Plan. Gains narrowed later amid caution over U.S. inflation data and Hong Kong’s jobless rate rising to 3.9%. CATL gained 2.6%, while XPeng, Geely, and SMIC rose over 2%.

Earnings this week:

• Wednesday: IBM, Boston Scientific, AT&T, Tesla, Kinder Morgan, SAP, Lam Research, Thermo Fisher Scientific
• Thursday: Honeywell, Dow, American Airlines, Intel, Newmont
• Friday: Procter & Gamble, General Dynamics

FX:

• USD strengthened Tuesday, supported by easing credit concerns following Zion Bancorp's earnings report. Focus shifts to Friday's US CPI and next week's Fed meeting, where a 25bps rate cut is expected.
• In G10 FX, the CAD advanced on better-than-expected CPI data, pushing USDCAD down to 1.4004 as markets priced in a more hawkish stance. However, Oxford Economics anticipates the Bank of Canada could still opt for a 25bps cut due to underlying economic slack.
• The JPY lagged, with USDJPY peaking at 152.17 after Takaichi's election as Japan's Prime Minister, who affirmed the BoJ's policy independence. Market eyes now turn to the BoJ meeting on October 30th, with a 20% probability of a 25bps rate hike.
• GBP, EUR, AUD, and CHF saw modest losses. In EMFX, Hungary's forint remained stable post-NBH rate decision, while Brazil's Finance Minister Haddad flagged restrictive interest rates despite rising inflation nearing target limits.

Commodities:

• Oil advanced after industry data signalled the first decline in US crude stockpiles in four weeks, while President Donald Trump reiterated that India would trim purchases of Russian energy. WTI moved toward $58 a barrel after Tuesday’s 0.4% gain, and Brent traded above $61. The API reported a 3 million‑barrel drop in crude inventories last week, with fuel stocks, including gasoline, also lower. Government data are due later Wednesday.
• Gold and silver extended losses after their steepest selloff in years, as investors took profits amid concerns the recent surge left them overvalued. Spot gold traded near $4,050 an ounce after tumbling as much as 6.3% yesterday—the largest intraday drop in more than a dozen years—while spot silver, around $48, fell as much as 8.7%. Technical indicators signalled the rally in both metals was overstretched.

Fixed income:

• US Treasuries advanced, led by the 30‑year as long‑end yields hit their lowest since April, flattening the curve. Front‑end activity was brisk in the one‑month SOFR–fed funds basis across October, November and December. The 10‑year hovered near 3.96%, its lowest closing yield in a year. Canadian bonds weakened after hotter‑than‑expected CPI, leaving the 10‑year around 4bp cheaper versus its US counterpart by day’s end.

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