Asia Market Quick Take – September 12, 2025

Key points:

• Macro: US inflation rises 2.9%, in line with expectations
• Equities: S&P 500 hits new highs driven by Oracle’s 35.9% gain 
• FX: USD weak on jobless claims; Lagarde boosts EUR's growth outlook
• Commodities: Oil ended 3-day rally on IEA larger-surplus forecast for next year
• Fixed income: 10 year yield fell below 4% for first time since early April

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Disclaimer: Past performance does not indicate future performance.

Macro:

• US annual inflation rose to 2.9% from 2.7% in June and July, in line with expectations. Food, vehicle prices, and energy costs increased, while gasoline and fuel oil declined less sharply. Monthly CPI rose 0.4%—the highest since January. Core inflation remained at 3.1%, with core CPI rising 0.3%, matching July's pace.
• ECB held interest rates steady: deposit at 2.00%, refinancing at 2.15%, and lending at 2.40%. Inflation nears the 2% target with projections of 2.1% in 2025, 1.7% in 2026, and 1.9% in 2027. Core inflation expected at 2.4% in 2025, 1.9% in 2026, and 1.8% in 2027. Growth projected at 1.2% in 2025, 1.0% in 2026, and 1.3% in 2027.
• US initial jobless claims rose by 27,000 to 263,000 in early September, the highest since October 2021 and above the expected 235,000, reflecting a worsening labor market. The four-week average increased by 9,750 to 240,500, the sharpest weekly rise since December 2020.
• The average 30-year fixed mortgage rate backed by Freddie Mac dropped 15 bps to 6.35%, the lowest since early October. This decline followed falling Treasury yields, amid signs of a slowing US labor market and prospects of Fed rate cuts.

Equities: 

• US - S&P 500 gained 0.9% to top 6,588, the Dow jumped 616 points to 46,107, and the Nasdaq 100 rose 0.6%. August CPI rose 0.4% vs. forecasts but annual inflation held at 2.9%, while jobless claims climbed to a 2021 high, reinforcing rate-cut expectations. Gains were broad, led by materials, health, consumer, and chipmakers; Tesla (+6%), Micron (+7.5%), and Centene (+9.1%) stood out. Warner Brothers gained 29% as Paramount Skydance prepares for a bid while Opendoor Technologies gained 80% on a CEO change. Gemini also reportedly prices IPO at $28, valuing the firm at $3.3b, while stablecoin payments company Circle Internet gained 17%. Alibaba ADR also gained 8% after planning to raise $3.2b via convertible bonds to fund AI cloud growth.
• EU - European stocks advanced Thursday after the ECB held rates steady for a second meeting. The STOXX 50 gained 0.4% and STOXX 600 rose 0.5%. The ECB kept its inflation outlook largely unchanged, slightly lifting 2025 and 2026 forecasts, while signaling the rate-cut cycle may be over. US CPI data met expectations, reinforcing bets on a Fed cut next week. On the corporate front, Inditex rose 2.5%, Airbus gained 3%, and Stellantis surged 9.2% on plans to revive Jeep Cherokee and V8 RAM models.
• HK - Hang Seng fell 0.4% to 26,086 Thursday, snapping a four-day rally from its four-year high. Losses followed reports the U.S. may curb Chinese medicines and tighten drug licensing scrutiny, sending pharma stocks lower—Hansoh (-8.3%), CSPC (-7.1%), Akeso (-4.7%), and Wuxi Biologics (-4.7%). Meituan (-4.6%) and Li Auto (-2.9%) also declined. Losses eased after news China may direct state banks to help local governments cover unpaid bills. Meanwhile, U.S. futures rose on soft PPI data, reinforcing Fed rate-cut bets, while the ECB is expected to hold rates later today.

FX:

• USD fell on soft labor data and hawkish ECB comments from President Lagarde. U.S. CPI was as expected, but jobless claims surged by 27k to 263k, driven by Texas floods. Markets now anticipate around 73 basis points of rate cuts, with the Dollar Index closing at 97.54.
• EUR strengthened, buoyed by Lagarde's remarks about balanced growth risks and an end to disinflation. Despite unchanged ECB rates and a slight inflation forecast increase, sentiment shifted, pushing EURUSD to about 1.1730.
• G10 currencies were firmer against the Dollar amid weak U.S. data. RBNZ Governor Hawkesby forecasted the OCR to drop to 2.50% by year-end, more dovishly than current pricing. NZD outperformed, with NZDUSD at 0.5970 and AUDUSD at roughly 0.6660.
• Economic Calendar – UK GDP, UK Goods Trade Balance, UK Industrial Production, US Michigan Consumer Sentiment Preliminary

Commodities:

• Oil held lower after the IEA flagged a bigger surplus next year, outweighing geopolitical risks from the Middle East to Europe. WTI hovered near $62 after a 2% drop, Brent above $66, as the IEA’s record oversupply call followed OPEC+’s plan to keep gradually restoring supply in October.

Fixed income:

• US Treasuries bull‑flattened Thursday, lifted by a solid 30‑year auction that stopped on the screws and higher‑than‑expected jobless claims alongside in‑line CPI. Steepener unwinds persisted; the 10‑year fell below 4% for the first time since early April, about 4bp lower and outperforming Bunds after Lagarde’s hawkish tone, while the five‑year neared its YTD low. Japan’s MoF will auction ¥650bn of 5–15.5 year bonds.

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