Global Market Quick Take: Asia – April 24, 2025

Key points:

• Macro: Trump softens stance on Powell and US-China tariffs
• Equities: Equities rise after Trump softens stance
• FX: Swiss franc and yen underperforms against the dollar
• Commodities: Oil marked its steepest two-week fall
• Fixed income: Treasuries twist flatten as front end yield lifts

------------------------------------------------------------------

Disclaimer: Past performance does not indicate future performance.

Macro:

• Trump softened his stance on Fed Chair Powell and US-China trade, with the WSJ reporting potential tariff cuts to 50-65%. Gains were pared as officials clarified cuts would be part of future negotiations.
• US new single-family home sales rose 7.4% to an annual rate of 724,000, the highest in six months, exceeding expectations of 680,000. This aligns with increased mortgage applications as borrowing costs declined.
• S&P Global Flash US Composite PMI fell to 51.2 in April 2025 from 53.5 in March, pointing to the slowest private sector activity growth in 16 months. Services activity slowed (51.4 vs 54.4) while manufacturing improved (50.7 vs 50.2). Business expectations about the year ahead dropped to one of the lowest levels seen since the pandemic while prices charged for goods and services rose at the sharpest rate for just over a year, with an especially steep increase reported for manufactured goods, linked to tariffs.

Equities: 

• US - Dow rose 1.07%, the S&P 500 gained 1.67%, and the Nasdaq surged 2.5% after Trump suggested tariffs might not stay at 145% and reassured investors about Fed Chair Powell. Indexes retreated as Treasury Secretary Bessent clarified no tariff cut was proposed and trade talks hadn't started. IBM shares fell nearly 7% after reaffirming its guidance, disappointing investors.
• Germany - DAX closed 3.1% higher at 21,932 on Wednesday, its best since early April, driven by strong corporate earnings. SAP surged 10.6% after reporting a 60% year-on-year rise in operating profit, surpassing forecasts. Banks, tech, and auto sectors also performed well.
• Hongkong - HSI rose 2.4% marking its third consecutive gain. Financials, consumer, and tech stocks rose 2% to over 3% as investors anticipated the Politburo meeting. Tencent gained 3.0% and NetEase 1.7% after their games were approved in China. Xiaomi surged 6.9% with Q1 shipments up 40% and XPeng up 8.7%.
• Japan - Nikkei 225 rose 1.89% to 34,868, and the Topix Index gained 2.06% to 2,584 on Wednesday, hitting a three-week high after Wall Street's rebound. Japan's private sector grew in April, led by technology, consumer, and industrial stocks.

Earnings this week:
Thursday: INTC, GOOGL, TMUS, LRCX, PEP
Friday: ABBV, CL, PSX, POR, CNC

FX:

• The dollar index strengthened across G10 currencies, with the Swiss franc and yen performing poorly, the DXY index nearing the 100.00 mark The Bloomberg Dollar Spot Index rose 0.6%, its best day since April 7, marking two days of gains.
• AUDUSD fell 0.1% to 0.6363 amid uncertainty over easing China trade tensions, although the Aussie outperformed other peers on Wednesday.
• USDCHF increased by 1.3% to 0.8298, EURUSD declined 0.8% to 1.1325 due to slow euro area private-sector growth in April amid tariff uncertainty, and USDCAD rose 0.5% to 1.3889.
• The JPY declined 1% following US Treasury Secretary Bessent's comments on exchange rates. Bonds are likely to fall ahead of the 2-year government bond auction today.
• Major economic data: Germany Ifo Business Climate, UK CBI Business Optimism Index, US Durable Goods Orders, US Initial Jobless Claims, US Existing Home Sales

Commodities:

• Oil had its biggest two-week drop amid potential OPEC+ supply hikes and US-China trade tensions. WTI stayed near $62 after a 3.2% fall, while Brent ended above $66. Reuters notes some members plan a significant supply increase in June amid quota disputes.
• Gold rebounded after its largest five-month drop, driven by Trump's softer stance on the trade war. Bullion rose 1.5% in Asian trading after a 2.7% fall previously, as Trump indicated he might reduce tariffs on Chinese goods significantly.

Fixed income:

• Treasuries had mixed results, with the yield curve flattening as short-term bonds underperformed. Improved trade policy sentiment and reduced fears of Trump dismissing Fed Chair Powell eased the interest-rate cut premium. The successful sale of 5-year notes, ending 1 basis point below the when-issued level, boosted market sentiment.

For a global look at markets – go to Inspiration.