Asia Market Quick Take – September 23, 2025

Key points:

• Macro: Governor Miran states current policy risks Fed’s employment mandate
• Equities: Nvidia gains 4% on Open AI investment; Oracle rises 6.3% on role in Tiktok
• FX: GBP, EUR rise; CAD dips; ECB considers rate cut; JPY pressured by polls
• Commodities: Gold at record; ETF holdings rising fastest in 3+ years
• Fixed income: Treasury yields rose, bear‑flattening on heavy corporate supply

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Miran stated that current Fed policy is 'very restrictive' and risks the Fed's employment mandate. He suggested the Fed funds rate should be in the mid-2% range, nearly 2 percentage points lower than the current level.
• Euro Area consumer confidence improved to -14.9 in September 2025, surpassing expectations of -15.3, driven by lower borrowing costs and easing inflation. EU consumer sentiment increased 0.5 points to -14.3, but fiscal uncertainty and trade tariffs remain concerns.
• Canada's industrial producer prices rose 0.5% in August, below the expected 0.9%. Increases in chemical, meat, dairy, vehicle, and metal prices led the rise, while lower energy prices moderated it. Excluding energy, the IPPI rose 0.7%. Meat, fish, and dairy prices climbed 1.9%, driven by beef, veal (+5.2%), and chicken (+2.1%).
• Australia's Composite PMI dropped to 52.1 in September from 55.5 in August, the lowest in three months but still indicating expansion. Output growth in manufacturing and services slowed, with goods new orders contracting at an eight-month high and US tariffs impacting export demand.
• Hong Kong's inflation rate rose to 1.1% in August 2025 from 1.0%, as expected. Increases in transport, services, and alcoholic drinks drove the rise, while declines in clothing and footwear moderated. Housing and food prices remained steady, while softer growth in electricity, water, goods, and a drop in durable goods offset the increase.
• The Chicago Fed National Activity Index rose to -0.12 in August 2025, the highest in five months, up from -0.28 in July, indicating increased economic growth. Improvements were seen in production and employment indicators, while personal consumption and housing showed a slight decline. The CFNAI-MA3 rose to -0.18 from -0.20.

Equities: 

• US - US stocks extended record highs Monday, driven by Big Tech optimism. The S&P 500 rose 0.4%, Nasdaq 0.5%, and Dow 66 points. Nvidia jumped 4% on plans to invest up to $100B in OpenAI, while Oracle surged 6.3% amid leadership changes and AI momentum. Apple gained 4.3% on strong iPhone 17 demand, and Tesla rose 1.9% to 2025 highs. In contrast, Kenvue slid 7.5% after Trump linked Tylenol to autism—a claim experts deny. Investors remain focused on the Fed following last week’s 25-bp rate cut, with officials emphasizing inflation control over further easing.
• EU - European stocks slipped Monday after last week’s gains as investors weighed global rate outlooks and geopolitical risks. The STOXX 50 fell 0.3% to 5,445, while the STOXX 600 eased 0.1% to 554. Autos led losses after Porsche cut its profit outlook and delayed an EV launch, sending shares down 7.2%; Volkswagen dropped 7.1%, and Stellantis fell over 2%. BBVA slid 2.7% after raising its Banco Sabadell bid to €17B. In contrast, ASML rose 2.2%.
• HK - Hang Seng fell 0.8% to 26,344 Monday, reversing prior gains as U.S. futures slid ahead of Fed speeches and key inflation data. Sentiment was cautious before Hong Kong’s August CPI release and as the city prepared for super typhoon Ragasa, prompting a 36-hour airport shutdown from Tuesday night. Losses were led by property stocks (-1%), with financials, consumers, and tech also weaker. BYD dropped 2.2% after Berkshire Hathaway fully exited its stake. Other notable decliners: Citic (-6.3%), SITC Intl. (-5.9%), Techtronic (-4.0%), and Kuaishou (-2.2%). The PBoC kept lending rates at record lows for a fourth month.

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:

• USD weakened with key data like S&P Global Flash PMIs, Q2 GDP, and PCE due this week. Fed speakers maintained cautious stances, with Bostic and Musalem wary of further easing, and dovish Miran advocating for a mid-2% rate. DXY traded near 97.34.
• GBP and EUR led G10 FX gains, while CAD's advantage dwindled. ECB officials suggested a rate cut by December, supported by robust EZ consumer confidence. JPY softened on FNN polls favoring dovish LDP candidate Takaichi, with USDJPY at 147.70.
• PBoC kept 1- and 5yr LPRs steady at 3.00% and 3.5%, setting USDCNY mid-point at 7.1106, sparking temporary declines before a rebound.
• Economic Calendar – Germany HCOB Manufacturing PMI Flash, EU Composite PMI Flash, UK S&P Global Manufacturing PMI Flash, UK S&P Services PMI Flash, BoE Pill Speech, US S&P Global Manufacturing PMI Flash, US S&P Services PMI Flash, Fed Chair Powell Speech

Commodities:

• Gold hit a record as traders shrugged off cautious Fed remarks, with ETF holdings rising at the fastest pace in 3+ years. Silver hovered near $44/oz; SLV options volume surged to 1.2m Friday, the most since Apr 2024.
• Oil was little changed after a four-day slide as investors weighed Western moves to curb Russian exports. WTI Nov hovered near $62; Brent below $67. Mark Carney urged swift secondary sanctions.

  Fixed income:

• Treasury yields rose 1–3bp in a bear‑flattening move as a rush of corporate issuance hit ahead of front‑end and belly auctions, while equities rallied, adding to the cheapening. The 10‑year was near 4.14% (+1.5bp vs Friday) with the front end leading losses before today’s 2‑year sale; in options, a large buyer of 10‑year calls targeted a yield drop towards ~3.95%.

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