Global Market Quick Take: Asia – March 10, 2025

Key points:

• Macro: US added more jobs than expected but unemployment ticked up to 4.1%
• Equities: Broadcom gains 8.4% after positive results
• FX: DXY near four-month low at 103.7; EUR, SEK rose on European investment optimism
• Commodities: WTI dropped below $67 after seven weeks of declines
• Fixed income: 10-year yield ends its streak of weekly losses

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Disclaimer: Past performance does not indicate future performance.

Macro:

• The US economy added 151K jobs in February 2025, up from 125K in January but below the 160K forecast. Growth occurred in health care (52K), financial activities (21K), transportation and warehousing (18K), and social assistance (11K). Federal employment fell by 10K due to DOGE layoffs, with more impact expected from spending cuts and tariffs. Unemployment rate rose to 4.1% from 4% last month, below the 4% forecast. Fed Chair Powell said that the central bank is in no rush to cut interest rates, but the overall economic outlook remains clouded by trade tensions and policy uncertainty.
• China plans to implement 100% retaliatory tariffs on Canadian rapeseed oil, oil cakes, and peas, along with a 25% levy on aquatic products and pork from March 20.
• China's producer prices fell by 2.2% year-on-year in February 2025, slightly exceeding the forecasted 2.1% decline. This marked the slowest drop since August 2024, amid ongoing deflation for the 29th month, influenced by commodity price fluctuations and the Lunar break in January. Consumer prices fell 0.7% year-on-year in February, the first decline in 13 months versus an expected decline of 0.5%.
• Japan's nominal wages (labour cash earnings) rose 2.8% year-on-year in January 2025, below the 3% forecast and the lowest in three months. Real wages fell 1.8% as inflation outpaced wage growth. Unions demand a 6.09% pay hike, the largest in over 30 years. The Bank of Japan is expected to keep interest rates steady in March, seeking evidence of sustainable wage growth.

Equities: 

• US - The S&P 500 rose by 0.6%, Nasdaq 100 added 0.74%, and Dow Jones by 222 points. Stocks recovered after Fed Chair Powell stated there was no rush to cut interest rates, though trade tensions and policy uncertainty cloud the economic outlook. Mixed economic data showed nonfarm payrolls increased by 151K in February, with unemployment rising to 4.1%. Trump's trade policies added to market jitters despite temporary tariff exemptions for Canada and Mexico. Broadcom surged 8.4% on positive results, while Costco fell 7% due to weak earnings. The market had its worst week since September, with the Dow and S&P 500 down over 2% and Nasdaq down 3%.
• EU - The DAX fell 1.8% to 23,009 on Friday as traders considered the impact of Trump's unpredictable trade policy and the latest U.S. jobs report on global growth. European Union leaders reaffirmed increased military support for Ukraine during an emergency meeting on Thursday. Most stocks were down, with Bayer dropping 6.5% after announcing plans to seek shareholder approval for a potential equity offering of up to 35% to address U.S. legal issues. Rheinmetall (-7%), MTU Aero Engines (-5.7%), and Siemens Energy (-4.8%) also saw significant losses. Despite Friday's drop, the index gained 2% for the week.
• HK - HSI dropped 0.6% to 24,231 on Friday, ending a three-day rise, after China's trade data showed a slump in imports and slowing exports amid US tariff pressures. Investors were cautious ahead of China's CPI and PPI data. Losses were led by property, financial, and tech stocks, with JD Logistics down 14% due to slower Q4 profit growth. Despite Friday's decline, HSI rose 5.6% for the week, driven by AI sector optimism and China's plans for fiscal stimulus and monetary easing to support economic recovery.

Earnings this week:

• Monday: BioNTech, Oracle, NetPower, Asana, Paymentsus
• Tuesday: Kohl's, Dick's Sporting Goods, Viking, Ciena, UNFI, Casey’s, FuelCell
• Wednesday: ZIM, Adobe, UiPath, SentinelOne, Crown Castle, Tilly’s
• Thursday: D-Wave, DocuSign, Dollar General, Ulta Beauty, Semtech, Futu
• Friday: Li Auto, Gogoro, WRD, Drilling Tools International, Hudson

FX:

• USD showed mixed performance, with the DXY remained near four-month low of 103.7, experiencing its largest weekly drop since November 2022 due to EUR strength. February's NFP report slightly missed expectations, with unemployment rising to 4.1%. Trump considered sanctions on Russia and tariffs on Canada. Fed's Kugler deemed job data "solid," with steady policy anticipated.
• EUR and SEK continued to outperform, driven by optimism around Europe's investment plans, particularly in Germany. EURUSD rose above 1.0830, SEK strengthened to 10.08 against USD. CHF and GBP also gained despite minimal news.
• USDCAD rose above 1.43 after US and Canadian jobs data. Canada added fewer jobs than expected; CAD losses were due to profit-taking and limited USMCA tariff exemptions.
• JPY strengthened past 148 against dollar, reaching a five-month high amid trade tensions and BOJ's potential rate hikes, signalling a gradual exit from monetary easing.
• Major economic data: Germany Balance of Trade, Germany Export, Germany Industrial Production, ECB Nagel Speech

Commodities:

• Oil prices fell to their lowest since September due to weak Chinese economic data. Brent crude was near $70, and WTI was below $67 after seven weeks of declines. China's inflation dropped below zero for the first time in 13 months, showing deflationary pressures in the largest crude importer.
• Copper declined from a four-month high, while aluminium rose slightly, due to uncertainty over US President Trump's tariff plans. Trump mentioned possible reciprocal tariffs on Canadian lumber and dairy, with a global framework expected by April 2.

Fixed income:

• Treasuries declined, with yields reaching near weekly highs after Fed Chair Powell's comments on the strong US economy. Investors are anticipating a busy Monday for corporate deals. Yields rose with US 10-year yields at 4.32%, cheaper by 4 basis points and near the weekly peak.

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