Global Market Quick Take: Asia – June 30, 2025

Key points:

• Macro: Consumer sentiment soared to its highest level in four months
• Equities: Dow Jones gained 1%, outperforming its peers after Nike rose 15%.
• FX: CAD weakened past 1.37 against USD dur to Trump’s renewed trade tensions
• Commodities: Gold declined further after two weeks of losses
• Fixed income: Yield curve steepens as long end fell down

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Disclaimer: Past performance does not indicate future performance.

Macro:

• US President Trump's extensive tax cut and spending bill passed its first hurdle in the US Senate on Saturday with a 51-49 vote, increasing the likelihood of its passage soon. President Trump hailed the Senate's vote as a great victory, referring to the bill as the "great big, beautiful bill."
• Trump announced the suspension of trade talks with Canada because of its digital services tax on US tech companies.
• Consumer sentiment jumped to a four-month high of 60.7, with inflation expectations improving significantly. The core personal consumption expenditures price index rose 2.7% in May, slightly more than expected, but the pace suggests limited price pressures, allowing the Fed to consider rate cuts later this year.

Equities: 

• US - US stocks reached record highs on Friday, boosted by optimism over upcoming trade deals and potential interest rate cuts, despite President Trump's remarks on halting trade talks with Canada. The S&P 500 rose 0.5%, surpassing its February peak, while the Nasdaq 100 also gained 0.5% to a new high. The Dow Jones increased by 432 points. Earlier, the markets surged due to positive trade news, including a framework agreement with China. The market rebounded strongly from April lows, driven by easing inflation and strong corporate earnings. Consumer sentiment improved, and core PCE inflation saw only a minor increase. Nike shares soared 15% after a positive earnings report, and Amazon rose 0.5% following an analyst upgrade.
• EU - European stocks surged on Friday, following global markets amid signs that the US might impose milder tariffs than anticipated. The Eurozone's STOXX 50 rose by 1.5% to 5,320, and the STOXX 600 increased by 1.1% to 543. The US and China reached a trade agreement, avoiding aggressive tariffs in line with softer rhetoric from certain US policymakers. EU leaders also discussed resolving previous trade disputes with the US. Meanwhile, harmonised inflation in France and Spain rose more than forecasted—0.8% and 2.2% respectively—but remained low enough for the ECB to continue rate cuts. Gains were seen across all sectors, especially in major industrials, with Siemens soaring 6.5% and Schneider 3.6%. Auto makers also performed well, with BMW, Mercedes-Benz, and Stellantis each increasing over 4.5%.
• HK - Hang Seng dropped 0.2%, to end at 24,284 on Friday, marking its second consecutive session of decline after a brief rise in morning trade. Sentiment turned cautious as data revealed China’s industrial output fell 9.1% year-on-year in May, the first drop in three months, contributing to a year-to-date decline of 1.1% amid deflation risks and tariff uncertainty. Traders were also concerned about the upcoming June PMI data from China. Property stocks fell, with China Overseas Land down 3.9%, Henderson Land 2.3%, and Longfor Group 1.8%. Pharmaceutical stocks like Akeso Inc. and Innovent Biologics also declined. However, Xiaomi reached a record high after strong pre-orders for its new EV model YU7.

Earnings this week:

• Monday: Progress (PRGS), Quantum (QMCO)
• Tuesday: MSC (MSM), Constellation Brands (STZ), Greenbrier (GBX)
• Wednesday: UniFirst (UNF), FranklinCovey (FC), Zenvia (ZENV)

FX:

• On Friday, the Dollar Index rose as Trump reignited tariff tensions with Canada, leading to a risk-off sentiment. Trump ended trade talks over Canada's Digital Services Tax and promised tariffs soon. However, the USD continued to weaken on Monday morning.
• G10 currencies mostly fell against the Dollar on Friday. The EUR strengthened above 1.17 on potential EU tariff reductions. French and Spanish CPI figures were higher than expected. EUR and CHF outperformed.
• CAD weakened past 1.37 against USD due to Trump's renewed trade tensions, with USDCAD rising. Focus will be on Canada's response and Trump's tariff plans.
• Economic calendar – China NBS Manufacturing PMI, JP Housing Starts, Germany Retail Sales, UK Current Account, UK Mortgage approvals, Italy Inflation Rate, Germany Inflation Rate, US Dallas Fed Manufacturing Index, ECB Forum on Central Banking

Commodities:

• Oil prices dropped after a tentative truce between Iran and Israel, with Brent near $67 plunging 12% last week and WTI around $65. Hedge funds increased bearish bets, anticipating a possible OPEC+ supply hike of 411,000 barrels per day for August.
• Gold dropped further after two weeks of losses, influenced by trade deal optimism from the White House. It fell up to 0.8% in early Asian trading before recovering slightly. Bloomberg News noted potential US-EU agreements and nearing deals with Mexico and Vietnam.

Fixed income:

• Last Friday, the long end of the curve fell after reports of President Trump threatening new tariffs on Canada, causing stocks to pull back from session highs. Earlier gains from unexpected declines in May's personal income and spending were reversed. Month-end flows provided some support, though widening long-end swap spreads suggested rate-lock flows were active. Concurrently, European bonds weakened as risk assets rose and traders reduced bets on central bank rate cuts, reflecting optimism about US progress in trade deals with the EU and China.

For a global look at markets – go to Inspiration.