Global Market Quick Take: Asia – June 13, 2025

Note: This is marketing material.

Key points:

• Macro: Israel strikes Iran with air strikes and anticipating retaliation
• Equities:  Oracle up 13% after earnings; Boeing down 4.7% on fatal Dreamliner crash
• FX: Yen and Swiss franc continue to push higher; Dollar index hit 97.8
• Commodities: Oil jumped on reports of an Israeli airstrike in Iran; WTI topped $72
• Fixed income: Treasuries extends gains on safe-haven bid

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Disclaimer: Past performance does not indicate future performance.

Macro: 

• Israel struck Iran with air strikes on Friday morning. Israeli Minister of Defense Israel Katz has also declared a special state of emergency throughout the entire state of Israel, anticipating some retaliation from Iran in the near future.
• Trump revealed plans to dispatch formal letters to key trading partners in the coming one to two weeks, detailing unilateral tariff actions intended to urge countries towards new trade agreements.
• US initial jobless claims stayed at 248,000 in early June, above the expected 240,000, marking the highest level since October 2024 and signalling labour market softening amid economic uncertainty.
• US producer prices increased 0.1% in May 2025, below the forecasted 0.2%. Goods prices rose 0.2%, with tobacco up 0.9%, while jet fuel fell 8.2%. Service costs edged up 0.1%, with machinery and vehicle wholesaling margins rising 2.9%.
• UK economy contracted by 0.3% in April 2025, the first decline in six months and the largest since October 2023, exceeding the expected 0.1% drop. Factors included higher energy bills, increased National Insurance contributions, higher Stamp Duty rates, and Trump's tariffs. Services output fell by 0.4%.

Equities:

• US - S&P 500 rose by 0.4% and Nasdaq gained 0.2%, driven by a 13% increase in Oracle shares after strong quarterly results and optimistic forecasts for cloud growth due to AI demand. The Dow climbed 101 points, despite Boeing's 4.7% drop following a fatal Air India Dreamliner crash. Economic data indicated easing inflation, with the Producer Price Index up only 0.1% in May (est 0.2%), raising hopes for a Federal Reserve rate cut later this year. President Trump reiterated his call for a significant rate cut and confirmed plans to send tariff-related letters to US trading partners, while remaining confident in the China trade framework. 
• EU -European stocks fell on Thursday, with the STOXX 50 down 1.3% and the STOXX 600 dropping 0.3%, as trade tensions re-emerged. President Trump stated he would send letters to major trading partners within one to two weeks about unilateral tariff rates, creating additional uncertainty in global trade. Yet, Treasury Secretary Scott Bessent suggested the 90-day suspension of reciprocal tariffs could be extended for countries negotiating in "good faith."  Corporately, Deutsche Telekom fell over 3.5%, ASML dropped nearly 2%, and both Inditex and Siemens declined 1.7% and 1%, respectively. 
• HK - On Thursday, the Hang Seng fell 1.4% to close at 24,035, reversing the previous session's gains after Trump issued a new tariff threat. Trump stated that letters outlining new trade terms would be dispatched within weeks for countries to accept or reject. Markets retreated from near three-month highs, with all sectors declining as traders took profits. In corporate news, Kingsoft Cloud's CFO will step down on June 30, and Horizon Robotics fell 3.9% due to a HKD 4.67 billion top-up placement by shareholders. Other significant decliners included Kuaishou Tech (-6.1%), Xiaomi (-3.6%), SMIC (-2.2%), and Geely Auto (-2.8%).

Events this week:

• Apple’s Worldwide Developers Conference continues in Cupertino (final day)

FX:

• Dollar index dropped below 97.8, its lowest since 2022, amid trade tensions and geopolitical risks. President Trump plans tariff measures as the tariff pause ends next month. Iran's threats and weak US inflation data increased expectations of two Federal Reserve rate cuts.
• EUR gained strength to 1.1570 due to the dollar's continued decline, with ECB officials commenting on its future role. De Guindos suggested the euro's role could expand, while Simkus noted rates might need to be lowered as inflation risks falling below projections, and the ECB has reached the neutral rate.
• GBP initially fell due to weak UK data, including monthly GDP estimates, but strengthened to 1.3590 as the dollar continued to weaken. 
•  Safe-haven assets gained strength due to the weakening dollar, rising geopolitical concerns, and a favourable US Treasury curve. CHF outperformed the JPY, with USDCHF nearing 0.8100. USDJPY dropping below 143, following US PPI data and narrowing yield differentials.

• Economic data – Japan Industrial Production, Germany Inflation Rate, EU Balance of Trade, EU Industrial Production, US Michigan Consumer Sentiment Prel

Commodities:

• Oil prices surged following reports of an Israeli airstrike in Iran, increasing tensions in a region that produces a third of global crude. Brent rose 5.7%, exceeding $73 a barrel, while WTI also rallied above $72. Axios cited two anonymous sources about the strike.

• Gold rose for the third day after Israeli airstrikes in Iran, up 0.8% following yesterday’s 0.9% gain. Spot gold was $3,406.61 while silver, platinum, and palladium also rose.

Fixed income:

• Treasuries gained, led by short and medium-term maturities, due to rising jobless claims and favourable May PPI data. The rally extended after strong 30-year bond auction results. SOFR options activity increased, with hawkish bets unwound and new hedges added amid renewed Fed rate cut expectations. This morning, Treasuries and Australian bonds rallied as Middle East tensions boosted demand for safer assets. The 10-year yield fell 4 basis points to 4.32%.

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