Global Market Quick Take: Asia – April 11, 2025

Key points:

• Macro: China tariffs are now at 145%, US CPI came in weak at 2.4% vs 2.6% est
• Equities: S&P 500 fell 3.4%, with Tesla dropping 10%
• FX: USD selling boosted CHF and EUR to biggest gains since 2015
• Commodities: Gold reaches new record $3,200 amid recession fears
• Fixed income: Yield curve sharply steepens

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Disclaimer: Past performance does not indicate future performance.

Macro:

• The White House stated that US tariffs on China now total 145% after the latest hike. CNN reported the 125% "reciprocal" tariff announced by Trump adds to the existing 20% tariff. The Trump Administration may delist Chinese public company shares from US exchanges, with incoming SEC chair Paul Atkins likely to address this upon taking office, according to FBN's Gasparino.
• US inflation dropped to 2.4%, the lowest since September, from 2.8% in February, below the forecast of 2.6%. Gasoline and fuel oil prices fell, while natural gas prices rose. Inflation eased for shelter, used cars, and transportation. Food inflation increased. The CPI decreased by 0.1% month-on-month, the first drop since May 2020, against expectations of a rise. Core CPI came in at 2.8% yoy vs 3% est.
• US initial jobless claims rose by 4,000 to 223,000, meeting expectations and staying at low levels since March. Continuing claims fell by 43,000 to 1,850,000, below the expected 1,880,000, showing employment progress.
• China's consumer prices fell by 0.1% year-on-year, missing the expected 0.1% rise, marking a second monthly decline amid the US trade dispute. This drop was milder than February's 0.7% fall, due to slower food price declines with rising pork prices and recovering fresh fruit costs.

Equities: 

• US - US stocks continued their decline on Thursday, erasing much of the previous day's gains as the US raised tariffs on China, heightening economic uncertainty and recession fears. The S&P 500 dropped 3.4%, the Dow lost over 1,000 points, and the Nasdaq fell 4%, with tech giants particularly affected by risk sentiment. The White House increased tariffs on China to 145% from 125%, but did not address potential tariffs on base metals and chemicals. Growth concerns overshadowed yesterday's rally, despite disinflation signs in the CPI report. Leading the downturn, Tesla fell 10%, with Nvidia, Apple, and Amazon dropping over 6.5%. Oil producers Chevron and Exxon Mobil also declined by 6% as energy prices fell.
• EU - European bourses surged on Thursday, with the STOXX 50 up 4.4% and the STOXX 600 rising 4%, driven by tariff suspensions from both the EU and the U.S., alleviating fears of economic slowdown and inflation. The EU announced a 90-day pause on new U.S. tariffs to facilitate trade talks, following President Trump's decision to lower tariffs for non-retaliating countries. The U.S. now has a 10% baseline tariff on all imports, including the EU, with exemptions for sectors like semiconductors, copper, lumber, pharmaceuticals, metals, energy, and minerals, while autos face a 25% tariff. Banking, technology, and industrial stocks led the rally.
• HK - The Hang Seng rose 417 points, or 2.1%, to 20,682 Thursday, achieving its third consecutive gain as traders downplayed Washington's tariff increase on Chinese goods. China's White Paper signalled readiness to engage with the U.S., promising firm measures to defend interests. Sentiment improved with reports of Chinese leaders discussing market support and regulators considering calming strategies. March consumer prices dropped only 0.1% year-on-year, against expectations, lifting the mood. All sectors gained, driven by record HKD 35.5 billion mainland buying via Stock Connect. Tech and EV shares led the rally, including Kuaishou (4.7%), Trip.com (4.0%), Li Auto (5.6%), and Geely (4.9%).

Earnings this week:

Friday: JPMorgan Chase (JPM), Morgan Stanley (MS), Wells Fargo (WFC), Bank of New York Mellon (BK), BlackRock (BLK)

FX:

• USD experienced significant losses as safe havens, particularly the CHF, surged by about 4% to below 0.82 against USD due to uncertainty from President Trump's tariff changes and weaker-than-expected CPI data. DXY dropped 1.8% to 101.5.
• EUR rallied, surpassing the 1.12 level, aided by the dollar's decline and the EU's agreement on a 90-day pause in countermeasures against the US, pending satisfactory negotiations.
• GBP steadily advanced, nearing the 1.30 level, despite limited UK-specific catalysts, with attention now on upcoming UK economic data.
• JPY strengthened, with USDJPY testing the 144 level due to haven flows and the dollar's weakness.
• China's inflation was cooler than expected, and CNH strengthened without a clear driver, following reports of the PBoC asking state banks to cut dollar purchases.
• Major economic data: UK GDP, US PPI, US Michigan Consumer Sentiment Preliminary

Commodities:

• Oil futures fell again after Wednesday's relief rally amid US trade policy shifts. WTI dropped 3.7% to near $60, flirting with a four-year low, while Brent closed near $63. Previous session saw the largest intraday gain since October.
• Gold hit a fresh record as tariff concerns drove investors to safe havens. Bullion rose above $3,200 an ounce, surpassing the previous session's record, which saw a more than 3% gain for the second consecutive day.

Fixed income:

• Treasuries were mixed, with a sharply steeper curve. 2-year yields fell about 8bp, while the 30-year sector rose up to 12bp. Price action intensified after weaker-than-expected CPI, as a significant concession built in the long end for the $22 billion 30-year bond reopening.

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