Global Market Quick Take: Asia – July 23, 2025

Global Market Quick Take: Asia – July 23, 2025

Key points:

• Macro: Trump announces trade deal with Japan with 15% reciprocal tariffs
• Equities: US mixed going into earnings and stalled AI project by Softbank and OpenAI
• FX: EURUSD extends gains for the third consecutive day
• Commodities: Iron ore reached a five-month high amid China's reform progress
• Fixed income: Treasuries rose, sending yields to their lowest in a week

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Disclaimer: Past performance does not indicate future performance.

Macro: 

• Trump announced a new trade deal with Japan, involving USD 550 billion investment into the US and a 15% reciprocal tariff. On Truth Social, he mentioned Japan will open its markets to American cars, trucks, rice, and more. His announcement followed a White House meeting with Japan’s top negotiator, Ryosei Akazawa, who also met with US officials Lutnick and Bessent, according to Japan’s Asahi newspaper via Reuters.
• Trump announced a 19% tariff on Philippine goods following talks with President Marcos Jr., down from 20%. U.S. exports to the Philippines will face no tariffs. A 19% tariff on Indonesian goods and a 40% tariff on "transshipped" goods were also finalized, with "99%" of U.S. imports exempt from tariffs.

Equities:

• US - U.S. stocks ended mixed on Tuesday, with the S&P 500 reaching a new record, up 0.1%. The Dow gained 170 points, while the Nasdaq 100 fell 0.5% ahead of earnings from Alphabet and Tesla today. Chip stocks pressured the Nasdaq, as Nvidia dropped 2.4% and Broadcom fell 3.3% after news of a stalled AI project by SoftBank and OpenAI. Lockheed Martin (-10.8%) and Philip Morris (-8.2%) saw significant declines due to disappointing results. General Motors (-8%) warned of deeper tariff-related profit impacts after a 32% Q2 drop, reflecting trade policy concerns. Treasury Secretary Scott Bessent mentioned a likely extension of the tariff deadline with China, with plans to meet Chinese officials next week in Stockholm.
• EU - European stocks fell for the third straight session due to ongoing U.S. tariff concerns. The Eurozone STOXX 50 decreased by 1% to 5,288, while the STOXX 600 dropped 0.5% to 544. U.S. Treasury Secretary Bessent stated that White House officials are focusing on favorable trade agreements, possibly enforcing 30% tariffs on the EU before talks conclude. Defense stocks saw significant losses, with Rheinmetall, BAE Systems, and Thales falling between 3.5% and 1% amid fund managers' doubts about the sector's rally sustainability. Tech shares declined sharply, with ASML and Infineon losing over 3%. SAP and UniCredit are the next major companies to report earnings.
• HK - Hang Seng gained 0.5% to close at 25,130 on Tuesday, rebounding from earlier losses for a third consecutive session, driven by property and consumer stocks. The index reached its highest level since November 2021, following China's announcement of a $170 billion hydropower dam project in Tibet, boosting infrastructure confidence. CK Hutchison surged 2.5% as China COSCO Shipping showed interest in joining a consortium to acquire Li Ka-shing's overseas ports. Sinotruk Ltd. led gainers with an 8.0% jump, followed by China Hongqiao (3.7%), SMIC (2.8%), and Techtronic Inds. (2.6%).

Earnings this week:

• 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 decreased alongside Treasury yields as G-10 currencies saw tight ranges in a light US data week. Bearish dollar options momentum grows, focusing on Fed Chair Powell. 
• The yen rose to 146.50 USDJPY, as Japan maintains its rate policy post-election. Earlier this morning, the yen briefly surged 0.3% against the dollar before erasing gains following Trump's announcement of 15% tariffs on Japanese imports.
• EURUSD climbed 0.4% to 1.1746, marking a third daily gain, with traders turning bullish, evidenced by options for the highest levels since June 26. One-month risk reversals on EURUSD increased to 0.51% in favor of calls, rising for the third session. 
• USDCAD fell 0.6% to 1.3608, AUDUSD rose 0.4% to 0.6550, and GBPUSD gained 0.2% to 1.3525.

Economic calendar: Singapore June CPI data, Japan June Machine Tool Orders, Taiwan June Industrial Production, US June Existing Home Sales.

Commodities:

• Oil prices rose as investors watched US trade talks. WTI neared $66 a barrel after a three-day drop, while Brent closed just below $69. Trump announced a 19% tariff deal with the Philippines and a 15% rate with Japan.
• Gold climbed, driven by dollar weakness and focus on the Fed’s future. Treasury Secretary Scott Bessent backed Fed Chair Powell amid Trump's critiques. Trump wants rates 3 percentage points lower. Spot gold rose nearly 1% to $3,430.05 per ounce; silver and palladium gained, platinum fell.
• Iron ore rose to a five-month high as China’s supply-side reforms showed progress, boosting raw material prices. In Singapore, futures jumped over 3% to surpass $107 a ton, their highest since February. Coking coal futures in Dalian hit their daily limit amid talk of mandated supply cuts.

Fixed income:

• Treasuries advanced, pushing yields to their lowest in over a week, driven by technical factors rather than fundamental catalysts. The 10-year note yield closed below its 200-day average for the first time since July 2, and bullish flows in Treasury futures and options supported the move. Australian bonds edged up on speculation of strong demand for new 2036 notes, while Japanese bond futures fell on concerns about Prime Minister Shigeru Ishiba stepping down and an upcoming 40-year bond auction.

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