Global Market Quick Take: Asia – August 6, 2025

Key points:

• Macro: US China nears a deal and Trump plans to increase India’s tariffs within 24 hours
• Equities: SMCI down 16.3% and AMD down 6.3% post-market due to missed estimates
• FX: Japanese yen underperformed compared to other G10
• Commodities: Oil extended its losing streak to four days
• Fixed income: Treasury yield curve flattens as front end moves up

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Trump said the U.S. and China are nearing a trade truce extension, easing tariffs and export restrictions. He might meet President Xi by year-end if a deal is made. The truce expires August 12.
• Trump warned that if the EU fails to make agreed US investments, tariffs will rise to 35%. If investments occur, tariffs will drop to 15%. He also reiterated plans to substantially increase India's tariffs within 24 hours due to its Russian oil purchases.
• Trump told CNBC's "Squawk Box" on Tuesday that tariffs on imported pharmaceuticals could eventually reach 250%. He plans to start with a "small tariff," raising it to 150% and then 250% within 18 months.
• ISM Services PMI fell to 50.1 in July 2025 from 50.8 in June, missing the 51.5 forecast, showing sector stagnation. Business activity, new orders, and inventories all slowed, while price pressures reached their highest since October 2022, with tariffs affecting commodities a major concern.
• The US trade deficit reduced to $60.2 billion, the lowest since September 2023, from $71.7 billion in May, exceeding the $61.6 billion forecast. Imports fell 3.7% to $337.5 billion, led by declines in pharmaceuticals, cars, crude oil, and nuclear fuel. Exports decreased 0.5% to $277.3 billion, affected by drops in metal shapes, nonmonetary gold, and computer accessories.

Equities: 

• US - S&P 500 lost 0.5%, Nasdaq dropped 0.7%, and Dow fell 62 points, contrasting with Monday's rebound after a weak jobs report. Stagflation worries returned as the ISM Services index indicated stalled activity in July. President Trump's potential tariffs on pharmaceutical imports and semiconductors heightened trade concerns with India, Switzerland, and China. Utilities and tech sectors declined most, while materials showed resilience. In earnings, Palantir surged 7.8% after an upbeat revenue forecast, Pfizer rose 5.2% on strong results, but Vertex Pharmaceuticals plummeted 20.6% after ending trials for a new pain medication. In the post market, SMCI fell 16.3% after missing both earnings and revenue estimates, while AMD fell 6.3% after reporting data center sales that missed expectations.
• EU - The Eurozone's STOXX 50 rose 0.2% to 5,253, while the STOXX 600 climbed 0.1% to 541. AB InBev saw a 2% rise after optimistic earnings, mirroring Diageo. Ferrari improved by 2.5%, recovering from previous declines, while Siemens, Airbus, and BASF gained over 1%, maintaining momentum from the prior session. Infineon jumped nearly 5% due to strong quarterly results, outperforming the sector as ASML fell nearly 1% following Trump's tariff announcement on semiconductors. Swiss stocks rebounded strongly as Swiss officials sought to negotiate reduced US tariffs this week.
• HK - Hang Seng rose 0.7% to 24,902, reversing early losses and achieving a second day of gains. Improved sentiment stemmed from China's rapid services growth and Wall Street rally driven by Fed rate cut expectations. Gains spanned sectors, despite Hong Kong weather challenges and strong momentum in mainland markets. Li Auto saw a 1.4% increase after consolidating its EV offerings, while other significant gainers included Bank of China Hong Kong (4.7%), China Tower (3.6%), Hansoh Pharma (3.1%), and Kuaishou Technology (2.7%).
• SG - On Tuesday, the Straits Times Index (STI) rose for the second straight session, boosted by retail sales growth of 2.3% in June, exceeding Bloomberg's 2% forecast. The STI gained 0.3%, up by 11.35 points to close at 4,208.58. Thai Beverage led the gains, up 2.2% or S$0.01 to S$0.47. OCBC's chief economist Selena Ling mentioned that retail sales growth fell short of her 2.7% estimate, affected by June's school holidays when many Singaporean families traveled abroad, capitalizing on the strong Singapore dollar.

Earnings this week:

• Wednesday: DoorDash (DASH), Instacart (CART), Uber (UBER), Lyft (LYFT), Walt Disney (DIS), Airbnb (ABNB), DraftKings (DKNG), Global Payments (GPN), Honda (7267), Novo Nordisk (NOVO),
• Thursday: DBS (D05), UOB (U11), Eli Lilly (LLY), Kenvue (KVUE), Warner Bros (WBD), Block (XYZ), US Foods (USFD), Semiconductor Manufacturing (SMIC), SoftBank (9984), Sony (6758), Toyota (7203)
• Friday: Wendy’s (WEN), McDonald's (MCD), Restaurant Brands (QSR)

FX:

• USD slipped, while the yen underperformed against other G10 currencies. Traders are watching the Swiss franc as Switzerland seeks a deal with the US to reduce Trump's 39% tariff. USDCHF dipped 0.1% to 0.8074. Swiss President Karin Keller-Sutter is in Washington for negotiations.
• USDJPY climbed 0.4% to 147.60, with Japan's largest bank urging the BOJ to hike rates amid rising inflation.
• USDCAD held steady at 1.3781, as Canada posted a record merchandise trade deficit in Q2. EURUSD was stable at 1.1574, and GBPUSD rose 0.1% to 1.3295, with attention on the BOE's expected quarter-point rate cut Thursday.
• Economic Calendar – Germany Factory Orders, UK S&P Global Construction PMI, EU Retail Sales, US MBA 30-year Mortgage Rate, Fed Cook Speech

Commodities:

• Oil continued its four-day decline as investors downplayed Trump's threat of tariffs on Russian energy buyers, amid softer US economic data. WTI traded near $65, Brent below $68, after Trump's tariff comments impacted China and India.
• Copper fell as London Metal Exchange warehouse inflows surged, reversing trades on Trump's tariff bets. Copper inventories rose by 14,350 tons to 141,850, the highest since March, driven by stocks in South Korea and Taiwan.
• Gold sustained its longest gain streak since February, fueled by US slowdown fears and lower rate bets. It steadied at $3,383 an ounce in Asia, after rising 3% in four sessions. Recent US data showed a stagnant services sector and weak labor market.

Fixed income:

• Treasury yields ended with a mixed performance, as front-end and intermediate yields increased following the first of three scheduled coupon auctions. The $58 billion 3-year note auction slightly lagged in anticipation of the upcoming longer-duration auctions: $42 billion of 10-year notes on Wednesday and $25 billion of 30-year bonds on Thursday. A strong corporate new-issue calendar also influenced the yield curve, which flattened around the stable 10-year sector.

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