Global Market Quick Take: Asia – June 4, 2025

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Key points:

• Macro: Trump doubles steel and aluminium tariffs to 50%, effective Wednesday
• Equities: CrowdStrike fell 6.5% post-earnings; strong Q1, but weak Q2 outlook
• FX: Dollar strengthened; DXY above 99, EURUD below 1.14, USDJPY near 144
• Commodities: Oil little changed as US inventories shrank while Canadian wildfires slowed
• Fixed income: Treasury gains faded after strong US job openings data

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Trump signed a Proclamation doubling steel and aluminium tariffs to 50%, effective Wednesday. UK tariffs remain at 25% as the 0% deal wasn't implemented in time, while other countries face 50% tariffs, per Bloomberg's Wickham.
• Job openings increased by 191,000 to 7.391 million in April, showing labour market strength despite trade issues. The OECD cut its 2025 US growth forecast to 1.6% from 2.2% due to policy and tariff concerns. Beijing and Washington accused each other of breaking a trade truce, while Trump's plan to double steel and aluminium tariffs faced EU criticism.
• US manufactured goods orders fell 3.7% to $594.6 billion in April 2025, the first drop in five months, against a forecasted 3% decline. Transportation equipment orders decreased by 17.1%, with nondefense aircraft and parts plunging 51.5% as tariff concerns led airlines to reduce demand for Boeing aircraft, which received only eight orders.
• The Caixin China General Manufacturing PMI dropped to 48.3 in May 2025 from 50.4 in April, missing the forecast of 50.6. This marked the first contraction in eight months and the steepest decline since September 2022, with output and new orders shrinking at the fastest rates since 2022.
• Eurozone inflation fell to 1.9% in May 2025 from 2.2% in April, below the 2.0% forecast, marking its first dip below the ECB's target since September 2024. This supports a rate cut, with services inflation at 3.2%, its lowest since March 2022, energy prices down 3.6%, and non-energy goods inflation steady at 0.6%.

Equities: 

• US - US stocks climbed on Tuesday, driven by tech strength, positive labour data, and trade optimism. The S&P 500 rose 0.6%, the Dow added 214 points, and the Nasdaq 100 increased by 0.8%, with Nvidia leading a 2.8% rally that briefly made it the most valuable publicly traded company. Other chipmakers like Broadcom (3.3%) and Micron (4.1%) also surged. The JOLTS report showed a rise in job openings by 191,000 to 7.391 million in April, indicating labour market resilience. Investors are anticipating a possible Trump-Xi call, which could impact trade talks and market sentiment. CrowdStrike dropped 6.5% in after-hours trading, despite reporting earnings of 73c per share, surpassing expectations, with revenue matching forecasts at $1.1 billion. They gave a disappointing Q2 revenue outlook which was below an expected $1.16b.
• EU - Frankfurt's DAX rose 0.7% to a one-week high of 24,092 on Tuesday, outperforming regional peers after recovering from previous losses. Market sentiment improved due to softer Eurozone inflation data, raising hopes for a 25 basis point ECB rate cut. However, concerns over global growth and political uncertainty in the Netherlands limited gains, along with ongoing global trade tensions affecting investor confidence. Top stocks included Airbus (+2.3%), Siemens Energy (+2%), SAP (+2%), BMW (+1.9%), Vonovia (+1.9%), and Infineon Technologies (+1.6%).
• HK - HSI jumped 1.5%, to 23,512 on Tuesday, recovering from Monday's losses as all sectors showed strength. The prospect of a conversation between President Trump and China's President Xi Jinping boosted sentiment, suggesting possible easing of trade tensions. Vodafone and CK Hutchison completed their UK merger, forming VodafoneThree with plans for a £11 billion investment in a 5G network over a decade. Gains were limited by private survey data indicating China's manufacturing contracted the most in over two years in May due to U.S. tariffs. Li Auto surged 5.7% on strong May sales, Hansoh Pharma rose 1.2% on optimism over its Regeneron licensing deal. Notable movers included Laopu Gold (5.5%), Swire Properties (5.1%), and CK Hutchison (4.0%).

Earnings this week:

• 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:

• USD recovered from earlier losses prompted by data, supported by the April JOLTS report which exceeded expectations with a rise in the vacancy rate and a fall in the quits rate. Despite soft April factory orders showing a larger-than-expected contraction, the dollar's recovery continued. DXY traded above 99 level.
• EUR weakened against the dollar, dropping below the 1.1380 level following softer HICP inflation data.
• GBP performed relatively better but still slightly weakened against the USD, with comments from Bank of England officials having minimal effect on market dynamics. GBEPUSD traded around 1.3530.
• JPY faced pressure due to the dollar's strength and a positive risk sentiment, briefly pushing USDJPY back to the 144 level.
• The RBA Minutes from May showed the Board considered rate options before cutting the Cash Rate by 25bps to 3.85%, as expected. Inflation is moderating, but the outlook remains uncertain, with a focus on maintaining low and stable inflation. AUDUSD fell to 0.6460.
• SNB's Tschudin commented on Swiss inflation, noting it fell to -0.1% in May, but emphasised that this is just one data point and highlighted increased uncertainty in the Swiss economic outlook. CHF traded around 0.8230 against USD.
• Economic data – AU GDP Growth Rate, Italy HCOB Service PMI, US MBS 30-year Morgage Rate, ADP Employment Change, CA BoC Interest Rate Decision, US ISM Service PMI

Commodities:

• Oil prices steadied after gains, with US inventory declines offset by rain slowing Canadian fires. Brent was above $65, and WTI near $63. The API reported a 3.28 million barrel stockpile drop, possibly the largest since March if confirmed.
• Gold steadied after a drop due to rising US job openings, boosting risk sentiment and the dollar. Near $3,360 an ounce, gold fell 0.8%.

Fixed income:

• Treasuries initially gained but ended with losses as US stocks and oil futures climbed. The gains began to fade after the April JOLTS job openings report showed an unexpected rise in job openings and hiring. Australian bonds are trading narrowly before the first-quarter GDP data release. The Bank of Japan will buy bonds maturing in up to 5 years and between 10 and 25 years.

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