Global Market Quick Take: Asia – June 24, 2025

Global Market Quick Take: Asia – June 24, 2025

Note: This is marketing material.

Key points:

• Macro: Trump announces ceasefire between Iran and Israel
• Equities: Tesla gains 8.2% after driverless taxi debut
• FX: Dollar drops; Fed signals rate cut, ceasefire between Iran and Israel
• Commodities: Gold and oil declines as geopolitical risks subside
• Fixed income: Treasuries extend gains on dovish comments from Fed members

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Disclaimer: Past performance does not indicate future performance.

Macro: 

• Trump announced a ceasefire timeline for "The 12-Day War" between Israel and Iran, calming investor nerves after the US struck Iranian nuclear sites, joining Israel's conflict. Iran's limited strike on a US base in Qatar caused no casualties, reversing the spike in oil prices and pressuring energy stocks.
• Fed's Bowman, echoing Waller, suggested a divide among FOMC members and is open to a July rate cut if inflation remains contained. She emphasized focusing on job market risks and noted minimal impacts from trade policy on inflation. Bowman is the second Governor to signal a willingness for a July cut.
• S&P Global US Composite PMI fell slightly to 52.8 in June from 53 in May, indicating a mild cooling in private sector growth but marking the 29th month of expansion. Service sector output eased to 53.1, while manufacturing remained steady at a 15-month high of 52.0.US existing home sales increased by 0.8% in May 2025 to an annualised rate of 4.03 million, rebounding from a 0.5% decline the previous month and surpassing market expectations of 3.96 million units.
• US existing home sales increased by 0.8% in May 2025 to an annualised rate of 4.03 million, rebounding from a 0.5% decline the previous month and surpassing market expectations of 3.96 million units.

Equities:

• US - On Monday, US stocks rose as oil prices dropped after Iran's missile attack on a US base in Qatar, which was intercepted without casualties. The S&P 500 and Nasdaq gained 0.9%, and the Dow rose 374 points, easing fears of an oil supply disruption. US oil prices fell over 7%, leading to declines in energy stocks like ExxonMobil (-2.6%) and Chevron (-1.8%). Iran's response was seen as restrained, avoiding critical energy infrastructure. President Trump urged oil producers to "keep prices down," adding pressure on crude. Tesla jumped 8.2% with its driverless taxi debut, and AMD gained 1% after a research upgrade, boosting tech stocks.
• EU- Frankfurt's DAX fell 0.4% to 23,274, aligning with other European markets as traders watched geopolitical events and new business data. Investors seem to expect limited escalation in the US-Iran conflict after US strikes on Iranian nuclear sites. A flash PMI survey indicated Germany's private sector returned to growth in June, the first increase since April. Munchener Ruck led losses, down 3.1%, followed by Sartorius (-2.5%) and Brenntag (-2.3%). German defense firms Renk Group, Hensoldt, and Rheinmetall also saw declines of 5.3%, 2.5%, and 1%, respectively. Conversely, RWE and Deutsche Telekom were top gainers, rising 1.7% and 1.6%.
• HK - Hang Seng rose 0.7% to 23,689, marking its second consecutive gain after rebounding from early losses. All sectors closed higher, led by property, tech, and financials, as sentiment improved with mainland markets rising ahead of China's legislative meeting, where new stimulus measures might be proposed. Geopolitical tensions remained high after US strikes on Iranian nuclear sites, with Iran vowing retaliation and the US issuing a global caution alert, though local stocks were minimally affected. CSPC Pharma gained 1.3% after approval for a pain treatment, while Laopu Old (7.8%), SMIC (4.8%), and Akeso Inc. (4.8%) also advanced.

Earnings this week:

• Tuesday: Carnival Corporation (CCL), FedEx (FDX), BlackBerry (BB), 
•  Wednesday: General Mills (GIS), Micron (MU), Jefferies (JEF),
• Thursday: Walgreens Boots Alliance (WBA), Nike (NKE), American Outdoor Brands (AOUT)

FX:

• Dollar index fell below 99 as fears of Iranian retaliation and Strait closure eased, reversing oil price surges. Fed's Bowman suggested a July rate cut, echoing Waller, leading traders to anticipate 55 basis points of rate cuts.
• Safe-haven currencies were mixed, with the CHF outperforming the JPY, positioning USDCHF around 0.8120.
• EUR trades above 1.16, recovering from losses following Israel's initial strikes on Iran, signalling a significant impact across various asset classes.
• Economic data – Germany Ifo Business Climate, UK BoE Gov Bailey speech, CA Inflation Rate, US Fed Powell Testimony

Commodities:

• Both gold and oil prices dropped further after Trump announced a tentative ceasefire between Iran and Israel. Brent crude fell up to 4.5% to $68.23 per barrel in early Asian trading, dipping below levels seen on June 12, before Israel's attack on Iran. As safe-haven demand dropped, bullion fell up to 0.6% to below $3,350 an ounce. Iran and Israel have not commented yet.
•  The London Metal Exchange faces a major copper squeeze, with spot prices rising due to shrinking inventories. Yesterday spot copper had a $280-a-ton premium over three-month futures, indicating a supply shortage.

Fixed income:

• Treasuries rose due to a flight-to-quality bid after Iran's symbolic response to US military strikes and dovish comments from Fed officials Michelle Bowman and Austan Goolsbee, boosting front-end demand. The yield curve steepened as the swaps market shifted dovishly, continuing momentum from Friday's comments by Fed's Christopher Waller. Earlier this morning, Treasury futures fell in Asia after President Trump announced a temporary ceasefire between Israel and Iran, reducing demand for safe-haven assets. Attention is on Japan's 20-year bond auction after plans to reduce super-long debt issuance were approved.

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