Asia Market Quick Take – September 18, 2025

Key points:

• Macro: Fed cuts rates by 25 bps to 4.00-4.25%; signaled two additional 2025 cuts
• Equities: Baidu gained 15.7% on AI potential; Nio surged 11% on strong sales
• FX: USD strengthens post-Fed cut; GBP gains amid CPI and BoE forecasts
• Commodities: Gold slipped from a record as the dollar strengthened
• Fixed income: Treasuries erased post‑cut gains after Powell’s remarks on labor market

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Fed cut rates by 25 bps to 4.00–4.25%, as expected, citing a shift in risk balance. Bowman and Waller supported the move, while new Governor Miran dissented, favoring a 50 bps cut. Median projections showed 2 more cuts in 2025. The Fed also downgraded its labor market view, noting slower job gains and a slight rise in unemployment, while inflation remains elevated.
• Bank of Canada cut interest rates by 25bps to 2.50%, citing a weaker economy and reduced inflation risks, with unemployment at 7.1%. Governor Macklem noted potential future cuts, given softening labor market and dissipating inflation pressures, while emphasizing careful risk assessment amid trade uncertainties.
• New Zealand's economy contracted 0.6% YoY in Q2 2025, driven by a 4.7% drop in goods-producing industries. Meanwhile, service industries grew 0.5% and primary sectors increased 0.1%. Quarterly GDP fell 0.9%, countering Q1's growth.
• China told its tech firms to stop buying Nvidia’s RTX Pro 6000D AI chip and terminate all its existing orders ahead of the Trump-Xi meeting on Friday.

Equities: 

• US - Stocks ended mixed Wednesday after the Fed’s expected 25 bps cut. The S&P 500 and Nasdaq slipped 0.1% and 0.3%, while the Dow gained 260 points on strength in traditional sectors. The Fed signaled two more cuts this year but gave no clear guidance beyond 2025, citing strong growth and sticky inflation. Consumer staples outperformed (AmEx +2.8%, P&G +1.4%), while tech lagged as Nvidia (-2.5%) and Broadcom (-3.5%) fell on reports of Chinese chip restrictions.
• EU - The STOXX 50 closed slightly lower at 5,366 and the STOXX 600 was flat at 550 as investors awaited the Fed decision before the market closed. Markets expect the first rate cut in nine months, with attention on the Fed’s dot plot. UK inflation held at 3.8% ahead of the BoE meeting today, while PostNL rose 1.5% on a new strategy and Novo Nordisk gained 1.6% after an upgrade.
• HK - The Hang Seng jumped 1.8% to 26,908, its highest since mid-2021, on Fed cut optimism and easing US-China tensions. Tech surged 4.3% on AI hopes, while Hong Kong’s policy address boosted consumer sentiment. Baidu gained 15.7%, most since March 2022 after Arete upgraded it to a buy, citing its AI chip venture could offest advertising struggles. Nio soared 11% on strong sales and plans for a new SUV, Shandong Hi-Speed rallied 17.6% on a buyback, and SMIC, Meituan, and Tencent also advanced.