Asia Market Quick Take – 23 February, 2026

Key points:

• Macro: US GDP drops and PCE rises. Trump plans to raise global tariffs to 15%.
• Equities: US stocks ended higher after Supreme Court struck down IEEPA tariffs
• FX: Dollar weakened; AUD hits 0.71 and NZD at 0.60
• Commodities: Gold extended a three-week rally
• Fixed income: 30-year Treasury yields up 6bps to 4.75% before easing

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Disclaimer: Past performance does not indicate future performance.

Macro:

• The US economy grew 1.4% in Q4 2025, below the 3% forecast, with consumer spending slowing and government spending dropping due to the shutdown. Fixed investment increased. In 2025, the economy expanded 2.2%, down from 2.8% in 2024.
• The US PCE price index rose 0.4% in December 2025, above forecasts, with goods and services prices increasing. Core PCE also climbed 0.4%. Annual PCE inflation hit 2.9%, and core inflation reached 3%, both above expectations. The index is the Fed's preferred inflation gauge.
• Trump plans to raise global tariffs from 10% to 15% following a Supreme Court decision, pending formal order. Concerns have emerged about potential military action against Iran amid stalled nuclear talks, with negotiations set to resume Thursday in Geneva.
• The University of Michigan revised US year-ahead inflation expectations slightly down to 3.4% in February 2026, a one-year low, from 3.5%. The five-year outlook was adjusted to 3.3%, matching January's figure.
• Fed’s Hammack emphasized patience with future rate cuts despite inflation progress, citing modestly restrictive policy and economic strength. Logan pointed out tech sector uncertainty and supported steady rates amid job market stability but is unsure about reaching 2% inflation. Musalem endorsed Warsh for Fed chair, mentioned Trump's tariffs won't impact the outlook, and noted Supreme Court ruling might bring uncertainty, with the real FFR around the neutral rate.

Equities: 

• US - US stocks climbed Friday, with the S&P 500 up 0.7% and the Nasdaq gaining 0.9% after the Supreme Court struck down President Trump’s reciprocal tariffs. The Dow rose 0.5% despite weak 1.4% GDP growth tied to the government shutdown. Over the weekend, Trump responded by issuing a new 10% global tariff via executive order, later raising it to 15%. Amazon and Home Depot advanced as investors weighed potential $175 billion in refunds against new trade risks. Tech strength, led by Alphabet’s 3.7% rise, helped the Nasdaq snap a five‑week losing streak even as core PCE stayed firm at 3%.
• EU - European stocks closed at fresh record highs Friday, boosted by strong economic data and a brief reprieve from US sanctions. The STOXX 50 rose 1.1% and the STOXX 600 gained 0.8%. Sentiment improved after the US Supreme Court struck down IEEPA tariffs previously imposed on the EU, lifting the outlook for trade‑exposed sectors even as the White House signaled new tariff plans. Luxury leaders LVMH and Hermes jumped 4.5% and 3.8%, while Intesa Sanpaolo and ING advanced over 2%. Better‑than‑expected Eurozone PMI readings and strong results from Air Liquide, up 4%, further supported gains.
• HK - Hang Seng fell 1.1% to 26,413 on Friday as tech and consumer stocks retreated. Sentiment weakened following Wall Street’s slide amid renewed private‑credit worries and rising U.S.–Iran tensions, with President Trump saying he will decide within 10 days on potential action against Iran. The tech index dropped nearly 3% ahead of Nvidia’s earnings, while consumer names slid despite strong Spring Festival travel demand. Property stocks inched higher on hopes of post‑holiday policy support. Major laggards included Xiaomi, SMIC, Techtronic, and Tencent.

Earnings this week:

• Monday: Hims & Hers
• Tuesday: Bank of Nova Scotia, National Bank of Canada, Bank of Montreal, Workday, HP, Home Depot, UOB, Singapore Airlines
• Wednesday: Nvidia, Salesforce, Snowflake, Paramount Skydance, Lowe’s, Royal Bank of Canada, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, HSBC, OCBC, Fortescue
• Thursday: Baidu, Intuit, Block
• Friday: None

FX:

• USD weakened against G-10 currencies following President Trump's announcement of a 15% global trade tariff.
• USDJPY edged lower at 154.30, while AUDUSD rose 0.7097. The Bloomberg Dollar Spot Index fell 0.2% on Friday, yet marked its fifth week of gains as central banks show a bias towards further interest rate hikes to control inflation.
• EURUSD rose to 1.1829, and GBPUSD remained steady at 1.3527 despite last week's declines. Trump's frustration with the US Supreme Court led to the tariff increase from 10% to 15% over the weekend, as the US urges trade partners to adhere to existing agreements amidst the tariff adjustments.

Commodities:

• Oil prices slipped as investors weighed the odds of a US-Iran nuclear deal, with further talks expected later this week amid a US military build-up in the Middle East; Brent drifted towards $71 a barrel after finishing little changed on Friday despite President Donald Trump considering a limited strike on Iran, and WTI also fell.
• Gold rose, extending its third straight weekly gain amid economic uncertainty after the Supreme Court struck down President Donald Trump’s use of emergency powers to impose trade tariffs; bullion climbed as much as 0.9% to above $5,150 an ounce in early trading, Trump said he would raise a 10% global tariff to 15% to preserve protective trade measures, senior US officials said the ruling would not unravel negotiated deals, the European Union threatened to delay ratifying its pact with the US until there is clarity, and silver gained 1.9%.