Asia Market Quick Take – August 12, 2025

Key points:

• Macro: Trump extends tariff deadline with China for another 90 days
• Equities: Rheinmetall down 5% as Trump meets Putin on Friday.
• FX: Broad based US dollar strength seen ahead of US CPI data
• Commodities: Gold fell and stayed low after Trump exempted bullion from tariffs
• Fixed income: Gilts outperformed, while bunds lagged

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Trump extended the tariff truce with China by 90 days, postponing duty hikes until mid-November. This keeps tariffs at 30% for Chinese goods and 10% for US goods, avoiding a sharp rise to 145% and 125%. The delay aids lower tariff rates on holiday imports like electronics and toys. Trump also urged China to quadruple U.S. soybean purchases, but no deal was confirmed.
• UK retail sales grew 1.8% year-on-year in July 2025, down from June's 2.7% and below the expected 2.1%. Food sales were up 3.9%, driven mainly by inflation. Non-food sales rose 1.4%, with early gains in fashion slowing due to weather changes, while homeware and furniture saw steady increases.

Equities: 

• US - US stocks dipped Monday ahead of a busy week for economic data and geopolitical news. The S&P 500 fell 0.2%, the Dow dropped 199 points, and the Nasdaq 100 declined 0.3% after last week's record highs. Investors await July's CPI and Thursday's PPI, crucial for the Fed's rate decision in September, with a likely cut. Trade tensions continued as President Trump extended a 90-day pause on Chinese tariffs and announced a deal with Nvidia and AMD. Gold imports faced no tariffs, calming concerns. Tech stocks were mixed: Intel rose on plans for its CEO to visit the White House, Micron gained on a stronger earnings outlook, and Apple slipped 1.4% after a stellar week.
• EU - European stocks initially rose but ended slightly lower due to trade and geopolitical concerns. The STOXX 50 dropped 0.3% to 5,330, and the STOXX 600 fell to 547 as investors awaited the expiration of the China-US trade truce tomorrow. Presidents Trump and Putin plan to meet in Alaska Friday about Ukraine's conflict, though President Zelenskyy may not attend. In corporate news, Novartis (+2.1%) and AstraZeneca (+1.1%) led pharma gains; ASML and Deutsche Telekom rose 1.6%. Ørsted shares plunged 30% following a rights issue announcement, while Rheinmetall declined by 5%.
• HK - Hang Seng rose 0.2% on Monday, closing near 24,907 after a morning dip. Gains were driven by optimism over new property market support in China. Beijing will lift suburban home-buying limits, boosting property stocks like Longfor Group (1.9%), China Resources Land (1.5%), and Sunac China (1.4%). Positive sentiment also came from better-than-expected July CPI figures due to consumer goods subsidies. In ongoing U.S.-China talks before a potential Trump-Xi summit, Beijing is urging Washington to ease memory chip export restrictions essential for AI development and hopes the trade truce extends further ahead too! Notable gainers included BYD Electronics (6.2%), Techtronic Industries (4.2%), and Geely Auto (2.4%).
• SG - The Straits Times Index (STI) experienced a slight dip, closing 0.2% lower at 4,232.78. Venture Corp, a technology solutions provider, led the gains with a 1.1% increase to $13.25. Conversely, Sembcorp saw the largest decline, dropping 3.4% to $6.49 after Maybank downgraded its rating to "hold" and lowered the target price to $6.40 due to recent earnings declines. Keppel announced plans to sell M1 Ltd's telecom business to Simba Telecom for an enterprise value of S$1.43 billion. Keppel will receive net cash of S$1 billion for its 83.9% stake while retaining M1's growing ICT operations, including data centers.

Earnings this week:

• Tuesday: Sea Limited (SE), Circle (CRCL), Galaxy Ent. (27HK), CoreWeave (CRWV)
• Wednesday: Cisco (CSCO), Brinker International (EAT), Tencent (700HK), Asics Corp (7936JP), Commonwealth Bank of Australia (CBA)
• Thursday: JD.com (JD), Applied Materials (AMAT), John Deere (DE), SOMPO (9630JP), NetEase (9999), Tapestry (TPR)
• Friday: Flowers Foods (FLO), Alibaba (9988HK), Sands China (1928HK)

FX:

• EURUSD declined 0.3% to 1.1612, reversing gains from the London session. European leaders and Ukrainian President Zelenskiy are scheduled for a call with Trump ahead of his meeting with Putin in Alaska on Friday.
• USDJPY rose 0.2% to 148.08 on dollar strength amid caution before US inflation data. USDCAD increased 0.1% to 1.3776, GBPUSD dropped 0.2% to 1.3431, and USDCHF advanced 0.5% to 0.8124, exceeding the 50-DMA of 0.8059.
• The yuan weakened onshore and offshore as the dollar appreciated and China amended its daily reference rate, with USDCNH up 0.1% to 7.1954 for a second consecutive day. Australian sovereign bonds fell ahead of the Reserve Bank's anticipated rate cut, while the Aussie dollar remained unchanged.

Commodities:

• Oil prices remained steady as President Trump extended the tariff pause on China, calming trade tensions. WTI was near $64 a barrel, close to a two-month low, while Brent closed just above $66. Trump’s truce with China is extended by 90 days, according to reports.
• Gold stayed down after President Trump said bullion imports would be exempt from tariffs, though traders sought formal clarification. Spot gold held near $3,350 an ounce, down 1.6% after Trump’s tweet on Monday. New York futures fell 2.5%.
• Iron ore prices climbed as some Chinese steel mills were told to halt production due to pollution concerns. Futures rose 1.6% in Singapore after a 2.1% weekly gain. Mysteel reported Tangshan mills must pause from Aug. 25 for air quality during a parade.

Fixed income:

• Australian bonds dipped before the Reserve Bank's decision, and Treasury futures fell as traders awaited US inflation data. Japan's bond market resumed after a break. Gilts outperformed, while bunds lagged following news of a call between European leaders, Zelenskiy, and Trump. Today’s CPI data may impact Fed rate cut expectations. US 10-year yields ended near unchanged at 4.28%; gilts exceeded by 3.5 basis points, and bunds lagged by one point.

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