Asia Market Quick Take – September 16, 2025

Key points:

• Macro: Trump highlights that US-China talks are going well
• Equities: S&P 500 closed above 6,600 for the first time; Alphabet reaches $3T valuation
• FX: USD weakened in G10 FX; CAD, AUD, and GBP strengthened against USD
• Commodities: Spot gold hits all time high $3,685
• Fixed income: US Treasury yields fell, mirroring gains in European bonds

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Disclaimer: Past performance does not indicate future performance.

Macro:

• The New York Empire State Manufacturing Index dropped to -8.7 in September 2025, signaling a manufacturing decline. New orders and shipments fell sharply, while inventories and employment remained fairly flat. Input prices stayed high, and selling prices were moderate. Optimism and employment are expected to remain flat.
• Trump reported positive US-China talks in Europe and plans to speak with President Xi on Friday, hinting at a company deal. Treasury Secretary Bessent confirmed a TikTok framework and upcoming talks. He differentiated anti-money laundering from the fentanyl issue, suggesting a potential 90-day tariff truce extension before November 10th.
• China's industrial production grew by 5.2% year-on-year, slowing from 5.7% in July and below expectations. This marked the weakest increase since August 2024, due to slower manufacturing and utility growth amid sluggish demand. Mining output rose steadily at 5.1%. Notable growth occurred in automotive (8.4%) and computers (9.9%). Year-to-date, industrial production grew 6.2%, with monthly growth of 0.37%.
• Euro Area trade surplus narrowed to €12.4 billion from €18.5 billion a year earlier, beating expectations. The surplus with the US decreased due to higher imports (+11.3%) and lower exports (-4.5%) amid tariff issues. Imports rose 3.1% driven by food, chemicals, and machinery, while exports grew 0.4%, with food and machinery gains offset by raw materials and chemical declines. Import growth from China, the UK, and Switzerland outpaced export drops to China.
• Germany's wholesale prices rose 0.7% year-on-year, up from 0.5% in July. Food, beverages, and tobacco prices increased 4.2%, and non-ferrous ores and metals surged 21.1%. Significant declines were seen in solid fuels and mineral oil products (-6.9%). Monthly wholesale prices dropped 0.6%, the steepest decline in a year, against an expected 0.2% rise.
• Canada's manufacturing sales rose 2.5% to CAD 70.3 billion, the largest increase since January 2023, exceeding the 1.8% forecast. Growth was driven by transportation equipment and aerospace products. Seven provinces saw increased sales, led by Ontario and Quebec; Manitoba had the largest decline. Year-over-year, sales fell 1.7%.

Equities: 

• US - US stocks rose Monday after President Trump signaled progress in U.S.-China trade talks and investors awaited the Fed’s decision. The S&P 500 gained 0.4%, closing above 6,600 for the first time. The Nasdaq 100 rose 0.8%, extending its record, and the Dow added 50 points. Tesla jumped 3.6% after Elon Musk’s nearly $1 billion stock purchase, his largest ever. Alphabet surged 4.3%, reaching a $3 trillion valuation, lifting communication services. Nvidia ended flat after China accused it of violating anti-monopoly laws, while Texas Instruments fell 2.4% amid a Chinese anti-dumping probe into U.S. chipmakers.
• EU - European stocks rose Monday as investors weighed global interest rate outlooks and Eurozone credit risks. The STOXX 50 gained 0.9% to 5,438, and the STOXX 600 added 0.4% to 557. Markets expect a 25bps rate cut from the Fed, with upcoming policy updates from the BoE, BoJ, and BoC also in focus. Concerns remain over France’s budget deficit, following Fitch’s downgrade due to rising debt and political tensions. Luxury stocks surged after JPMorgan projected strong upside and speculation around a potential Armani sale. LVMH rose nearly 3%, Kering jumped 5.5%, and Rubis soared 7.7% on takeover interest from CVC Capital Partners and Trafigura.
• HK - The Hang Seng rose 0.2% to 26,447 on Monday, marking its second straight gain, supported by rising U.S. futures ahead of a likely Fed rate cut. Hong Kong stocks hovered near a four-year high, boosted by ongoing U.S.-China trade talks in Madrid, though gains were limited by weak August data from China across factory output, retail sales, and investment. Alibaba rose 2.6%, Meituan gained 1%, and other top performers included Wuxi Biologics (6.4%), Li Auto (4.5%), Nongfu Spring (4.1%), CK Infrastructure (2.4%), and Xiaomi (2.0%). On the other hand, Popmart was down 6.4% after JP Morgan downgraded the stock citing rich valuations.
• CN - The Shanghai Composite fell 0.26% to 3,861, while the Shenzhen Component rose 0.63% to 13,006. August's industrial production and retail sales growth fell short of expectations, amid weak domestic demand and efforts to control overcapacity. The unemployment rate rose, and home prices continued declining. US and Chinese officials started talks in Madrid on security and economic issues, including China’s divestment from TikTok. Among stocks, Victory Giant and Cambricon Technologies fell around 3%, while Contemporary Amperex (CATL) surged 9.1% and Sungrow Power gained 2.1%.

Earnings this week:

• Tuesday: Ferguson Enterprises
• Wednesday: General Mills, Bullish
• Thursday: FedEx, Lennar, Research Solutions

FX:

• USD weakened in the G10 FX market due to lower US yields ahead of the FOMC meeting on Wednesday. The New York Fed Manufacturing Survey reported a surprising decline, but it had little effect on the USD given upcoming retail sales and the FOMC meeting.
• G10 currencies strengthened against the USD due to narrowing rate differentials. The CAD led these gains ahead of its CPI release, with notable increases also seen in the AUD and GBP. USDCAD traded around 1.3835, AUDUSD traded above 0.6670.
• EURUSD rose to above 1.1760 despite the Fitch downgrade of France’s rating. ECB officials maintain that interest rates are appropriately positioned as inflation stabilizes around 2%.
• In China, retail sales and industrial output data fell short of expectations, triggering calls from Oxford Economics and ING for stimulus to maintain growth. Potential measures include rate and reserve requirement cuts in the near future. USDCNH traded below 7.12.
• Economic Calendar – UK Unemployment Rate, UK Employment Change, EU Industrial Production, EU ZEW Economic Sentiment Index, Canada Inflation Rate, Canada House Starts, US Retail Sales, US Export and Import Price

Commodities:

• Gold hovered near a record as bets on a Fed rate cut and a weaker dollar supported prices; bullion was little changed less than $10 below yesterday’s $3,685.64 peak, with focus on the Fed’s dot plot and Powell’s press conference.
• Oil steadied after a two-day rise as traders weighed potential Western sanctions on Russian supply against a looming glut; Brent held above $67 and WTI near $63, with the EU considering sanctions on Indian and Chinese firms facilitating Russia’s oil trade.

Fixed income:

• US Treasury yields slipped, tracking gains in European bonds, and the move largely held through a quiet US afternoon. Broad dollar weakness added support as traders positioned for the Federal Reserve decision, with a 25bp cut widely anticipated. In Europe, Spain and Portugal led the advance following upgrades from S&P and Fitch, respectively, while France saw only a muted response to Fitch’s late‑Friday downgrade.

For a global look at markets – go to Inspiration.

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