Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
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Asia Market Quick Take – September 22, 2025
APAC Research
Key points:
- Macro: Trump imposes $100K fee for H-1B visas
- Equities: S&P 500 hits new record high; Apple surges 3.2% on JP Morgan upgrade
- FX: USDJPY stable; BoJ plans pressure Yen; GBP falls on borrowing concerns
- Commodities: Gold extended its winning streak to five weeks.
- Fixed income: US Treasuries fell on UK-led sell-off post-August deficit overshoot.
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Disclaimer: Past performance does not indicate future performance.
Macro:
- BoJ kept its policy rate at 0.5% and will sell its ETF and J-REIT holdings. It noted a moderate economic recovery but warned of trade risks. Japan's core inflation dropped to 2.7% in August, the lowest since November 2024.
- FDI in China fell 12.7% to CNY 506.58 billion by August 2025. The services sector attracted CNY 336.16 billion, manufacturing CNY 129.03 billion, and high-tech industries CNY 148.28 billion. Japan, Switzerland, UK, and Singapore investments grew by 58.9%, 37.2%, 24.5%, and 1.8%.
- Retail sales in Canada likely rose 1% in August 2025, erasing July's 0.8% decline. This marks the second largest turnover increase this year amid US tariff-induced household spending uncertainty.
- Trump plans to introduce a new USD 100k fee for H-1B visas as part of the latest crackdown.
- US Senate rejected a short-term funding bill, risking a government shutdown if no bill is passed by September 30. The Senate returns on September 29, and the House on October 7.
Equities:
- US - US stocks hit record highs Friday, extending gains after upbeat earnings, the Fed’s first 2025 rate cut, and signs of progress in US-China talks. The S&P 500 rose 0.5% above 6,600, the Nasdaq 100 gained 0.7%, and the Dow added 172 points to top 46,300. FedEx jumped 2.3% on strong results, Apple surged 3.2% after a J.P. Morgan upgrade and new iPhone launch, and Tesla climbed 2.2% on a Baird upgrade. Markets also tracked a call between President Trump and Xi Jinping on trade, fentanyl, and TikTok. Oracle gains 4% after talks with Meta for a multi-year cloud computing deal worth $20B. In the energy space, Oklo gained 28% on UK-US nuclear energy partnership worth $350b.
- EU - European stocks ended slightly higher Friday as gains in financials offset mixed moves elsewhere. The Eurozone’s STOXX 50 rose 0.2% to 5,467, while the STOXX 600 was flat at 555. Banks led the advance, with Santander, BNP Paribas, and Nordea up nearly 2%. Airbus and Safran gained 1.4% and 2.3%, while Maersk slumped 6% on plunging freight rates. The Bank of Japan held rates steady but surprised markets by signaling plans to unwind its massive ETF holdings. Investors also tracked a Trump-Xi call highlighting progress on trade and TikTok. For the week, STOXX 50 added 1.4%, STOXX 600 was unchanged.
- HK - Hang Seng closed flat at 26,545 Friday as tech and consumer gains offset financial and property losses. Early gains faded ahead of a Trump-Xi call on trade and TikTok. Mainland stocks retreated from decade highs after the PBoC signaled no rush to ease policy despite weak August output. U.S. futures were muted following Thursday’s Fed-driven rally. Weekly, the Hang Seng rose 0.6%, its third straight gain, supported by China’s tech progress in AI and chips. Zijin Gold plans a $3.2B Hong Kong IPO, the largest since May. Top movers: Sands China (+5.2%), China Hongqiao (+5.1%), Innovent (-5.8%).
Earnings this week:
- Tuesday: Micron, AutoZone, Smiths Group, Kingfisher, Worthington Enterprises
- Wednesday: Nine Dragons Paper, Tuas, Cintas, JD Sports Fashion, Thor Industries, KB Home, MediaForEurope
- Thursday: Oracle Japan, Fonterra, Costco, Accenture, H&M, Jabil, LPP
- Friday: New World, DCM Holdings, Danieli, Crediabank
FX:
- Dollar Index ended the week unchanged, as gains following the FOMC meeting balanced out earlier declines. DXY traded near 97.70.
- USDJPY stayed steady post-BoJ split decision, with surprise ETF/J-REIT sell plans pressuring the Nikkei and Yen strengthening to 147.21 before recovering. Future rate hikes depend on U.S. tariffs. USDJPY traded above 148.
- G10 FX was mostly down, but CAD outperformed slightly despite July Retail Sales Ex-autos falling more than expected. Prior figures were revised up, and the headline monthly decline was 0.8%.
- GBP fell against USD due to higher borrowing figures, pressuring Chancellor Reeves ahead of the budget. Fiscal YTD borrowing exceeded GBP 72.4B forecast. GBPUSD trades near 1.3465.
- Economic Calendar – China Loan Prime Rate, US Chicago Fed National Activity Index, EU Consumer Confidence Flash, US Fed Speech, BoE Gov Bailey Speech
Commodities:
- Oil was little changed after last week’s modest drop as traders assessed EU sanctions and Ukrainian strikes on Russia’s energy infrastructure. Brent held above $66 after a 0.5% weekly fall and WTI hovered near $63; the EU’s next package targets oil‑industry entities in “third countries”—about a dozen Chinese and several Indian—to further curb the Kremlin’s petrodollars.
- Gold logged a fifth weekly gain after the Fed’s first 25bp cut of the year, with markets eyeing Friday’s inflation print for policy cues. Bullion traded about $20 below last week’s record.
Fixed income:
- US Treasuries softened Friday, tracking a UK-led sell-off after August’s deficit overshot estimates, leaving yields 1–2bp cheaper across the curve with slight front-end outperformance. Options flows favoured higher-yield bets. Gilts underperformed Europe, with the long end about 5bp cheaper, weighing modestly on Treasuries. This week brings heavy corporate supply and 2-, 5- and 7-year note auctions.
For a global look at markets – go to Inspiration.
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