Global Market Quick Take: Asia – July 22, 2025

Global Market Quick Take: Asia – July 22, 2025

Key points:

• Macro: EU plans countermeasures as prospects of a deal fades
• Equities: Straits times index up for 11^th consecutive session
• FX: The yen surged more than 1%
• Commodities: Gold hit a one-month high
• Fixed income: US 10-year Treasuries rose for the fourth day

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Disclaimer: Past performance does not indicate future performance.

Macro: 

• Howard Lutnick is optimistic about an EU deal but emphasizes the firm August 1 tariff deadline, with a 10% baseline tariff remaining. Following Trump's tariff notices, the EU plans countermeasures, while traders predict a 60% chance of a Fed rate cut in September amid possible leadership changes.
• Bessent indicated that if the Senate bill proceeds, secondary tariffs could reach 100% on nations buying sanctioned oil.
• Hong Kong's annual CPI eased to 1.4% in June 2025 from 1.9% in May, the slowest in three months. This was due to slower price rises in housing, transport, miscellaneous services, and utilities, and a larger drop in durable goods prices.

Equities:

• US - U.S. stocks opened the week positively, with the S&P 500 up 0.3%, Nasdaq gaining 0.5%, and the Dow Jones increasing by about 50 points, as investors watched trade developments and anticipated significant corporate earnings. Commerce Secretary Howard Lutnick confirmed the August 1st deadline for new tariffs, while negotiations continue. Communication services and materials were the top sectors. Verizon rose nearly 3% after exceeding earnings and revenue expectations and raising its full-year profit outlook. Attention is now on key earnings from companies like Alphabet, Tesla, IBM, T-Mobile, and Coca-Cola. Conversely, Microsoft shares fell 0.3% after warning about "active attacks."
• EU - Frankfurt's DAX 40 hovered near 24,330 on Monday, as investors remained cautious due to upcoming quarterly earnings from DAX companies and the ECB's policy decision. The ECB is expected to keep interest rates steady on Thursday amid tariff uncertainties and a strong euro. Investors are also monitoring EU-US trade talks. German automakers like BMW, Mercedes-Benz, and Volkswagen faced pressure following Stellantis' first-half loss, while airline stocks might gain support after Ryanair's stronger-than-expected earnings due to higher ticket prices.
• SG- Singapore equities rose 16 points or 0.4% to reach 4,207 on Monday, marking the eleventh consecutive session of gains, the longest recorded streak. The Straits Times Index surpassed 4,200, fueled by strong inflows and robust economic fundamentals. The Monetary Authority of Singapore (MAS) has placed an initial S$1.1 billion with three appointed asset managers under its $5 billion Equity Market Development Programme. Banking, telecom, and industrial sectors led the rally, with top performers including City Development (2.0%), Mapletree Logistics Trust (1.7%), Yangzijiang Shipbuilding (1.7%), Capital Land Investment (1.1%), and SATS (1.2%).

Earnings this week:

• Tuesday: Lockheed Martin, Coca-Cola, General Motors, Philip Morris International, SAP, Matador Resources, Texas Instruments, RTX Corporation, Northrop Grumman
• Wednesday: Tesla, Alphabet, AT&T, Hasbro, ServiceNow, IBM, Chipotle Mexican Grill, QuantumScape
• Thursday: American Airlines, The Blackstone Group, Nokia, Southwest Airlines, Flex, Union Pacific, Intel, Newmont Corporation, Deckers Brands, Nasdaq, 
• Friday: Centene Corporation, HCA Healthcare, 

FX:

• A Bloomberg dollar index fell, reversing some of last week's gains alongside a slide in Treasury yields. 
• The yen jumped over 1% to USDJPY 147.08 after Japan's ruling coalition lost its upper house majority in Sunday’s elections. The focus remains on the Federal Reserve's rate outlook amid pressure on Jerome Powell from President Trump. Dollar option momentum weakened, with skew near parity. Japan's Prime Minister Shigeru Ishiba pledged to continue leading despite the LDP's loss. Japan's cash markets were closed for a holiday, causing thinner liquidity and widened spot spreads. USDJPY risk reversals were at 58bps puts over calls, indicating reduced bullish sentiment compared to earlier highs. 
• Meanwhile, EURUSD rose 0.6% to 1.1693 ahead of the European Central Bank's Thursday decision, GBPUSD gained 0.5% to 1.3487, and USDCAD dropped 0.3% to 1.3685.

Economic calendar: Australia Central Bank Minutes; Mexico Retail Sales, International Reserves; New Zealand Trade Data; Taiwan Export Orders, Jobless Rate; US Richmond Fed Manufacturing Index.

Commodities:

• Oil prices steadied after two declines, with WTI at $67 and Brent near $69, as US-EU trade talks intensify before the August 1 deadline for potential 30% tariffs on EU exports.
• Gold reached its highest level in over a month as traders considered the effects of tariffs on inflation and interest rates amid a lack of significant economic data. Spot gold rose 1.5% to $3,398.39 an ounce, aided by a weaker dollar and falling bond yields. Silver, platinum, and palladium also experienced gains.

Fixed income:

• Treasuries gained as European government bonds rallied, driven by concerns over potential 30% US tariffs on EU exports. Euro-zone 10-year yields fell at least 7 basis points, while UK bonds surged after strong demand during a Bank of England sale. US yields decreased 2 to 5 basis points, with the 10-year note hitting 4.37%, its lowest since July 11. 

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