Global Market Quick Take: Asia – July 28, 2025

Key points:

• Macro: Trump announces trade deal with EU
• Equities: S&P 500 rose 0.4% for fifth consecutive record close
• FX: EUR rose on US-EU trade deal; ECB held rates steady
• Commodities: Money managers increased bullish wagers to a 16-week high
• Fixed income: Front-end yields rose; long-end yields fell, flattening curve spreads last week

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Trump announced a deal with the EU involving a 15% tariff, with the EU agreeing to buy $750 billion in US energy, open all markets, purchase US military equipment, and make $600 billion in US investments. He claimed it's the biggest deal ever, benefiting cars and agriculture. Additionally, deals with three to four other countries are being explored, with confirmation letters expected soon.
• SCMP reported that China and the US will pause tariffs for another 90 days, ahead of talks in Stockholm today.
• China's trade surplus expanded to $114.77 billion in June 2025, surpassing last year's $98.94 billion and market expectations of $109 billion, as exports rose 5.8% year-on-year, beating the 5.0% forecast. Imports increased by 1.1%, slightly below the 1.3% expectation, but rebounded from May's 3.4% decline.
• US durable goods orders dropped 9.3% in June 2025 to $311.84 billion, reversing May's revised 16.5% increase and doing better than the expected 10.8% decline. Transport equipment orders fell the most (-22.4%), notably nondefense aircraft and parts (-51.8%) and nondefense capital goods (-24%).

• US - S&P 500 rose 0.4% on Friday, marking its fifth consecutive record close, the longest streak in over a year, while the Nasdaq 100 gained 0.2% after an intraday high. The Dow Jones advanced 208 points as investors reacted to trade developments and corporate earnings. Optimism about trade talks boosted the market, with President Trump set to meet European Commission President Ursula von der Leyen on Sunday, fostering hopes for a US-EU agreement. Ahead of the August 1 tariff deadline, deals were secured with Japan, Indonesia, and the Philippines, but talks with Canada stalled. Strong earnings from Alphabet and Verizon enhanced sentiment, but Intel warned of losses, impacting the tech sector.
• EU - European stocks mostly fell on Friday amid corporate earnings reviews and anticipation of EU-US trade updates. The STOXX 50 slightly rose to 5,360, while the STOXX 600 decreased 0.3% to 550, impacted by declines in industrial and healthcare sectors. Schneider Electric and Airbus each dropped over 1% ahead of their upcoming earnings reports, contributing to negative sentiment for industrial stocks. In contrast, LVMH and Volkswagen both jumped 4%, boosting the luxury and auto sectors.
• HK - Hang Seng Index dropped 1.1% to 25,388 on Friday, ending a five-session winning streak as traders took profits before next week's key Politburo meeting. Markets retreated from nearly a four-year peak amid doubts about significant stimulus from Beijing, focusing instead on upcoming U.S.-China trade talks in Stockholm. Talks aim to extend the current truce before tariffs rise sharply on August 12 without a deal. Major losers included Kuaishou Tech (-4.9%), Akeso Inc. (-3.3%), Meituan (-3.0%), and Pop Mart Intl. (-2.8%).

Earnings this week:

• Monday: Waste Management (WM)
• Tuesday: Procter & Gamble (PG), UnitedHealth (UNH), Boeing (BA), UPS (UPS), Starbucks (SBUX), Visa (V)
• Wednesday: Meta (META), Microsoft (MSFT), Ford (F), Qualcomm (QCOM), Altria (MO), Airbus (AIR)
• Thursday: Apple (AAPL), Amazon (AMZN), Reddit (RDDT), AbbVie (ABBV), Merck (MRK), Coinbase (COIN), Comcast (CMCSA)
• Friday: Chevron (CVX), Exxon (XOM)

• USD strengthened amid trade optimism and better-than-expected durable goods data. This week brings key events like Fed decisions and US-China talks.
• EUR climbed above $1.175 on Monday after a US-EU trade deal reduced tariffs to 15%. President Trump and Ursula von der Leyen praised its significance despite unclear details. Last week, the euro gained 1% as the ECB held rates steady, following recent cuts to 2%.
• JPY weakened against the dollar as the Federal Reserve and BOJ prepare for rate decisions. USDJPY increased to 147.78 after last week’s 0.8% fall. A US-EU trade deal imposed 15% tariffs, easing trade war fears. Despite political challenges, PM Shigeru Ishiba plans to stay. Yen selling might rise if resignation rumours intensify, notes Yujiro Goto.
• Economic Calendar - UK CBI Distributive Trades, Canada Wholesales Sales, US Dallas Fed Manufacturing Index

Commodities:

• Oil steadied after the US and EU agreed on a trade deal before Trump's August 1 tariff deadline. Brent topped $68 a barrel, and WTI neared $65, amid differences in key details between Trump and EU officials.
• Gold remained stable after the US-EU tariff agreement eased trade war fears. Bullion traded near $3,330 an ounce after a 0.4% weekly loss. The deal imposes 15% levies on key EU exports, but questions about its scope and impact on metals remain. Money managers raised bullish bullion bets to their highest since April, with net-long positions up 19% to 170,868 contracts by July 22.

Fixed income:

• Treasuries ended Friday mostly unchanged after long-dated yields reversed gains of 3-4 basis points. With no clear catalysts, traders noted that the low cash-market volumes made the market vulnerable to large flows. Over the week, front-end yields increased while long-end yields fell, flattening key curve spreads. This week's Treasury coupon auctions start on Monday with 2- and 5-year note sales, typically held on Tuesday and Wednesday; the series finishes with a 7-year note sale on Tuesday, the final auction until August 5.

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