Asia Market Quick Take – September 24, 2025

Key points:  

• Macro: Powell highlights challenges to balancing inflation and employment 
• Equities: Nasdaq 100 down 0.7% after Powell says market highly valued 
• FX: Dollar Index dipped as JPY, CHF, EUR rose; DXY steady at 97.25 
• Commodities: Oil extended week’s biggest gain on Trump’s Russia rhetoric, supply risks. 
• Fixed income: Treasury yields dipped, bull‑flattened on strong 2‑yr demand  

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Disclaimer: Past performance does not indicate future performance.  

 Macro:  

• Fed Chair Powell said equity prices are "fairly highly valued," noting the challenge of balancing inflation with a weakening labor market. Fed officials Goolsbee and Bowman expressed caution, highlighting inflation risks and possible faster rate cuts if job losses rise.
• The S&P Global US Composite PMI dropped to 53.6 in September 2025 from 54.6 in August, indicating slower growth but the strongest quarterly expansion since late 2024. Service activity slowed, manufacturing growth eased, and new orders, job creation, and work backlogs all faced challenges.
• The S&P Global US Services PMI decreased to 53.9 in September 2025 from 54.5, meeting expectations and indicating the slowest growth since June. New orders saw minimal rise due to weak domestic demand, affecting job filling by service providers.
• The US current account deficit shrank by $188.5 billion (42.9%) to $251.3 billion in Q2 2025, aligning with expectations. The goods deficit decreased as firms reduced imports, previously heightened to avoid new tariffs.
• The OECD forecasts global growth to slow to 3.2% in 2025 and 2.9% in 2026, down from 3.3% in 2024, due to US tariffs. The 2025 outlook is 0.3 points higher than June's projection, indicating early-year resilience.
• Sweden's central bank unexpectedly cut its rate by 25 basis points to 1.75% in September, aiming to boost the economy and control inflation. Despite growth prospects, the Riksbank cited risks from geopolitical tensions and uncertain US trade policy.
• Singapore's August 2025 inflation fell to 0.5%, the lowest since January 2021, down from 0.6% in July. Deflation intensified in some sectors, while transport and education costs rose. Monthly prices increased by 0.5%. Core inflation eased to 0.3%, below forecasts. 

Equities:  

• US - US stocks paused their rally on Tuesday, with the S&P 500 down 0.5%, Nasdaq 100 off 0.7%, and Dow Jones losing 88 points. Nvidia slipped 2.8% after its $100 billion OpenAI investment raised concerns over the deal's structure and energy needs. Oracle and Amazon fell 4.1% and 3.1%, respectively. Conversely, Kenvue rose 1.7%, offsetting Trump’s Tylenol criticism, while Boeing climbed 2% on an $8 billion order from Uzbekistan Airways. Fed Chair Powell noted equity prices are “fairly highly valued,” with officials echoing caution about inflation risks and job market weakness. 
• EU - European stocks surged Tuesday, recovering losses as key economic data bolstered most sectors. The STOXX 50 rose 0.7% to 5,480, and STOXX 600 climbed 0.4% to 556. PMI data showed the Eurozone's private sector expanding rapidly, driven by services. Consumer discretionary stocks like LVMH, L'Oreal, and Adidas jumped over 3%, as did Volkswagen and Stellantis, alleviating prior auto sector declines. Orsted gained over 7% after a favorable US court ruling on its wind project. Porsche is set to leave Germany's DAX index on Monday. 
• HK - Hang Seng Index fell 0.7%, to 26,159, hitting its lowest level in nearly two weeks. Sentiment was dampened by China's policy measures falling short of expectations after Monday's briefing from financial regulators, including the PBoC governor. Hong Kong shut down ahead of Super Typhoon Ragasa, halting most flights. Losses were curtailed by the China Securities Regulatory Commission's pledge to improve listed firms and attract global capital. Most sectors saw declines, with tech dropping nearly 1.5% as traders dismissed news of Nvidia's potential OpenAI investment. Pharma stocks experienced sharp falls, including Sino Biopharma (-4.9%) and CSPC Pharma (-4.2%).  

Earnings this week: 

• 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 edged lower as JPY, CHF, and EUR gained, with the DXY holding around 97.25. S&P Global PMIs met expectations, causing little market movement.  
• EUR climbed slightly, driven by Germany's positive PMI figures despite weak data from France. EURUSD traded near 1.1810. 
•  UK saw its Flash Composite PMI fall to 51.0, resulting in a brief GBPUSD dip before rebounding to 1.3520. BoE's Pill signaled potential for continued restrictive monetary policy. 
•  Riksbank made a surprising 25 bps rate cut, citing data that supports its view of high inflation as temporary, highlighted by declining corporate pricing plans and a stronger SEK. 
• In India, traders reported that the Reserve Bank of India is selling USD via state-run banks to prop up the INR, which is facing pressure partly due to recent H-1B visa policy changes. 
  Economic Calendar – AU CPI Indicator, Germany Ifo Business Climate, US New Home Sales, US MBA 30-year Mortgage Rate, BoE Greene Speech, Fed Daly Speech 

Commodities: 

• Oil extended its week’s biggest gain as Trump escalated rhetoric against Russia and supply risks loomed. WTI neared $64 after Tuesday’s 1.2% rise; Brent held above $67. Trump urged NATO to shoot down Russian aircraft violating allied airspace. 
• Gold hovered just below a record near $3,761—about $30 off Tuesday’s third straight peak—as markets weighed Fed remarks and Russia tensions. Powell gave no October‑cut signal; Bowman said faster easing may be needed as the labour market softens. 

Fixed income:  

• Treasury futures closed near highs, buoyed by strong 2‑year demand ahead of Today’s 5‑year auction. Fed tone was mixed; Powell gave no hint on an October cut. Yields were 2–3bp richer in a mild bull‑flattening; 2s10s tightened ~1.5bp and the 10‑year ended near 4.115%, 3bp richer. Auctions: $70bn 5‑year Wed, $44bn 7‑year Thu. 

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