Global Market Quick Take: Asia – June 2, 2025

Key points:

• Macro: Trump raises US steel and aluminium tariffs to 50%
• Equities: S&P 500 closed flat after US-China plan trade talks this week
• FX: Dollar Index at 99.4; Trump's trade policies raise concerns
• Commodities: Gold and oil prices rose due to escalating geopolitical risks
• Fixed income: Treasury yield curve twist steepens as long end underperforms

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Disclaimer: Past performance does not indicate future performance.

Macro:

• U.S. National Economic Council Director Kevin Hassett stated that President Trump and Chinese President Xi Jinping might discuss trade this week, focusing on the Geneva agreement.
• US President Trump announced that he will increase US steel and aluminium tariffs from 25% to 50% starting June 4th to safeguard the US industry.
• April's Core PCE met expectations with month-on-month at 0.1% and year-on-year at 2.5%. Headline inflation was slightly cooler at 2.1% year-on-year. Personal income rose to 0.8%, driven by Social Security payments. Weaker consumer spending suggests potential Q2 forecast risks.
• Ukrainian drones hit many Russian airfields on Sunday, as both sides prepare for peace talks in Turkey today.
• China's Manufacturing PMI rose to 49.5 in May 2025, still contracting but matching expectations. Output rebounded, while new orders, foreign sales, and employment declined slower. Prices dropped sharply, and business confidence improved from April's low.

Equities: 

• US - US equities recovered most losses late Friday after Donald Trump anticipated talks with Xi Jinping following claims that China broke a trade deal. The S&P 500 nearly erased a 1.2% drop, Nasdaq 100 fell 0.3%, and Dow rose by 100 points. Trump's accusations against China sparked concerns of a prolonged dispute. Nvidia, AMD, Micron, and Intel dropped over 1.5% amid tech sector declines. The Fed's inflation gauge hinted at easing price pressures, offering some relief. Costco (+4.1%) and Ulta Beauty (+11.5%) excelled with strong earnings, while Gap plunged nearly 20% on poor sales guidance.
• EU - Frankfurt’s DAX climbed 0.6% to nearly 24,100 on Friday afternoon, in line with European markets and poised for a 7.1% rise in May, its best performance since January. Investors welcomed favourable inflation data from Germany, Italy, and Spain, boosting expectations of an ECB rate cut next week.A federal appeals court reinstated Trump’s tariffs, reversing a lower court's ruling that they exceeded presidential authority. Treasury Secretary Scott Bessent mentioned that US-China trade talks are “a bit stalled.” Sanofi was down 4.4%, lagging its peers on mixed lung disease drug results.
• HK – HSI fell 1.2% to 23,290 on Friday, retreating from the previous strong session. The drop followed a U.S. federal court decision to reinstate Trump's tariffs, overturning a prior ruling. U.S. Treasury Secretary Bessent noted that trade talks with China are “a bit stalled,” possibly needing a direct intervention from Trump and Xi. Auto stocks fell over price war concerns, with BYD down 3.6%. Other notable decliners were Orient Overseas (-6.9%) and Techtronic Inds. (-4.5%).

Earnings this week:

• Monday: Campbell's, SAIC, Credo, Abivax
• Tuesday: Dollar General, NIO, Signet Jewelers, Ollie's, Ferguson, Donaldson, NESR, CrowdStrike, Hewlett Packard Enterprise, Guidewire, Asana, Couchbase, Mama's Creations, Sportsman's Warehouse, HealthEquity
• Wednesday: Dollar Tree, Sprinklr, REV Group, TechTarget, VersaBank, Thor Industries, Webster Bank, Genesco, MongoDB, PVH, Five Below, Planet, ChargePoint, Verint, Bark, Greif, Descartes, Tillys
• Thursday: Ciena, Cracker Barrel, Lands' End, Brown-Forman, Toro, Hello Group, Victoria's Secret, Waterdrop, BitFufu, Broadcom, DocuSign, Lululemon, Rubrik, Samsara, ServiceTitan, Torrid, Petco, Zumiez, Braze
• Friday: G-III Apparel Group, ABM, FuelCell Energy

FX:

• Dollar Index steadied at 99.4 amid concerns over Trump's trade policies. Tensions with China resurfaced. April's consumer spending slowed, and core inflation rose 2.5%, the smallest in four years. The US economy contracted in Q1, and the trade deficit narrowed due to a record drop in imports.
• CAD strengthened an a low of 1.3717 against USD, nearing a seven-month high, as strong GDP growth and retail sales led markets to reduce expected Bank of Canada rate cuts.
• Tokyo's CPI fell below expectations, but measures excluding food rose slightly more than anticipated. Japan's Economy Minister urged the US to reconsider tariffs, but the US stance remained unchanged. USDJPY fell to 143.45 from a peak of 144.44.
• EUR was unaffected by inflation data from Spain, Italy, and Germany, with expectations for moderation intact. EUR traded around the 1.13 level.
• Economic data – UK BoE Consumer Credit, UK Mortgage Lending, UK Mortgage Approvals, CA S&P Global Manufacturing PMI, US ISM Manufacturing PMI, US ISM Manufacturing Employment, Fed Logan Speech, Fed Goolsbee Speech

Commodities:

• Gold rose, recovering from a 2% drop last week, as geopolitical tensions increased demand for safe-haven assets. It climbed 0.8% in Asia after Ukraine's drone strikes in Russia and Moscow's prolonged attack on Kyiv, just before crucial peace talks.
• Oil prices rose as OPEC+ increased production in line with expectations, amid geopolitical risks in Ukraine and Iran. Brent crude gained 2.1% to $64.09 a barrel after last week's loss, while WTI was below $62. OPEC+ agreed to add 411,000 barrels per day in July.

Fixed income:

• Treasury futures were volatile on Friday, driven by April's personal income exceeding expectations and the PCE price index meeting forecasts. Focus shifted to US-China trade concerns. Bullish bets in Treasury and SOFR options targeted a bond market rally. The long end underperformed, leading to a twist steepening of the Treasury curve around the nearly unchanged 10-year sector.

For a global look at markets – go to Inspiration.

Key points:

• Macro: Trump raises US steel and aluminium tariffs to 50%
• Equities: S&P 500 closed flat after US-China plan trade talks this week
• FX: Dollar Index at 99.4; Trump's trade policies raise concerns
• Commodities: Gold and oil prices rose due to escalating geopolitical risks
• Fixed income: Treasury yield curve twist steepens as long end underperforms

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<Table with Source>

Disclaimer: Past performance does not indicate future performance.

Macro:

• U.S. National Economic Council Director Kevin Hassett stated that President Trump and Chinese President Xi Jinping might discuss trade this week, focusing on the Geneva agreement.
• US President Trump announced that he will increase US steel and aluminium tariffs from 25% to 50% starting June 4th to safeguard the US industry.
• April's Core PCE met expectations with month-on-month at 0.1% and year-on-year at 2.5%. Headline inflation was slightly cooler at 2.1% year-on-year. Personal income rose to 0.8%, driven by Social Security payments. Weaker consumer spending suggests potential Q2 forecast risks.
• Ukrainian drones hit many Russian airfields on Sunday, as both sides prepare for peace talks in Turkey today.
• China's Manufacturing PMI rose to 49.5 in May 2025, still contracting but matching expectations. Output rebounded, while new orders, foreign sales, and employment declined slower. Prices dropped sharply, and business confidence improved from April's low.

Equities: 

• US - US equities recovered most losses late Friday after Donald Trump anticipated talks with Xi Jinping following claims that China broke a trade deal. The S&P 500 nearly erased a 1.2% drop, Nasdaq 100 fell 0.3%, and Dow rose by 100 points. Trump's accusations against China sparked concerns of a prolonged dispute. Nvidia, AMD, Micron, and Intel dropped over 1.5% amid tech sector declines. The Fed's inflation gauge hinted at easing price pressures, offering some relief. Costco (+4.1%) and Ulta Beauty (+11.5%) excelled with strong earnings, while Gap plunged nearly 20% on poor sales guidance.
• EU - Frankfurt’s DAX climbed 0.6% to nearly 24,100 on Friday afternoon, in line with European markets and poised for a 7.1% rise in May, its best performance since January. Investors welcomed favourable inflation data from Germany, Italy, and Spain, boosting expectations of an ECB rate cut next week.A federal appeals court reinstated Trump’s tariffs, reversing a lower court's ruling that they exceeded presidential authority. Treasury Secretary Scott Bessent mentioned that US-China trade talks are “a bit stalled.” Sanofi was down 4.4%, lagging its peers on mixed lung disease drug results.
• HK – HSI fell 1.2% to 23,290 on Friday, retreating from the previous strong session. The drop followed a U.S. federal court decision to reinstate Trump's tariffs, overturning a prior ruling. U.S. Treasury Secretary Bessent noted that trade talks with China are “a bit stalled,” possibly needing a direct intervention from Trump and Xi. Auto stocks fell over price war concerns, with BYD down 3.6%. Other notable decliners were Orient Overseas (-6.9%) and Techtronic Inds. (-4.5%).

Earnings this week:

• Monday: Campbell's, SAIC, Credo, Abivax
• Tuesday: Dollar General, NIO, Signet Jewelers, Ollie's, Ferguson, Donaldson, NESR, CrowdStrike, Hewlett Packard Enterprise, Guidewire, Asana, Couchbase, Mama's Creations, Sportsman's Warehouse, HealthEquity
• Wednesday: Dollar Tree, Sprinklr, REV Group, TechTarget, VersaBank, Thor Industries, Webster Bank, Genesco, MongoDB, PVH, Five Below, Planet, ChargePoint, Verint, Bark, Greif, Descartes, Tillys
• Thursday: Ciena, Cracker Barrel, Lands' End, Brown-Forman, Toro, Hello Group, Victoria's Secret, Waterdrop, BitFufu, Broadcom, DocuSign, Lululemon, Rubrik, Samsara, ServiceTitan, Torrid, Petco, Zumiez, Braze
• Friday: G-III Apparel Group, ABM, FuelCell Energy

FX:

• Dollar Index steadied at 99.4 amid concerns over Trump's trade policies. Tensions with China resurfaced. April's consumer spending slowed, and core inflation rose 2.5%, the smallest in four years. The US economy contracted in Q1, and the trade deficit narrowed due to a record drop in imports.
• CAD strengthened an a low of 1.3717 against USD, nearing a seven-month high, as strong GDP growth and retail sales led markets to reduce expected Bank of Canada rate cuts.
• Tokyo's CPI fell below expectations, but measures excluding food rose slightly more than anticipated. Japan's Economy Minister urged the US to reconsider tariffs, but the US stance remained unchanged. USDJPY fell to 143.45 from a peak of 144.44.
• EUR was unaffected by inflation data from Spain, Italy, and Germany, with expectations for moderation intact. EUR traded around the 1.13 level.
• Economic data – UK BoE Consumer Credit, UK Mortgage Lending, UK Mortgage Approvals, CA S&P Global Manufacturing PMI, US ISM Manufacturing PMI, US ISM Manufacturing Employment, Fed Logan Speech, Fed Goolsbee Speech

Commodities:

• Gold rose, recovering from a 2% drop last week, as geopolitical tensions increased demand for safe-haven assets. It climbed 0.8% in Asia after Ukraine's drone strikes in Russia and Moscow's prolonged attack on Kyiv, just before crucial peace talks.
• Oil prices rose as OPEC+ increased production in line with expectations, amid geopolitical risks in Ukraine and Iran. Brent crude gained 2.1% to $64.09 a barrel after last week's loss, while WTI was below $62. OPEC+ agreed to add 411,000 barrels per day in July.

Fixed income:

• Treasury futures were volatile on Friday, driven by April's personal income exceeding expectations and the PCE price index meeting forecasts. Focus shifted to US-China trade concerns. Bullish bets in Treasury and SOFR options targeted a bond market rally. The long end underperformed, leading to a twist steepening of the Treasury curve around the nearly unchanged 10-year sector.

For a global look at markets – go to Inspiration.