Global Market Quick Take: Asia – March 13, 2025

Key points:  

• Macro: US headline and Core CPI were cooler than expected 
• Equities: Intel gains over 10% post market after announcing new CEO.
• FX: Canadian dollar increased following the anticipated rate cut 
• Commodities: Gold approached a record high, continuing its upward trend
• Fixed income: Treasuries decreased, led by front-end tenor losses 

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Disclaimer: Past performance does not indicate future performance.  

 Macro:  

• US headline CPI dropped to 2.8% from January's 3% yoy, below the forecast. Energy costs fell 0.2%, gasoline dropped 3.1%, fuel oil decreased 5.1%, while natural gas rose 6%. Inflation slowed for shelter, used cars, and transportation, with new vehicle prices down 0.3%. 
• US core CPI fell to 3.1% from January's 3.3% yoy, below forecasts, marking the lowest since April 2021. The shelter index rose 4.2%, the lowest since December 2021, down from 4.4% in January. 
• Following Trump's 25% tariffs on US steel and aluminum imports, both the EU and Canada retaliated by imposing a 25% tariff on US-made products. Canada targeted goods worth $20 billion while the EU tariffed goods worth , matching previous tariffs on US goods. 
• BoC cut its key interest rate by 25bps to 2.75%, marking 225bps in cuts since June 2024. The economy grew more than expected in Q4, aided by earlier rate cuts, but growth is expected to slow due to rising trade conflict with the US. 
• The US budget deficit was $307 billion, exceeding last year's $296.2 billion and surpassing the $303.2 billion forecast. Receipts rose 9% to a record $296 billion, while expenditures increased 6% to $603 billion. 

Equities:  

• US - US stock futures rose on Thursday, continuing the previous day's tech-led rally. Intel jumped over 10% in after-hours trading after announcing Lip-Bu Tan as its new CEO, while Adobe fell 4% due to a weaker earnings forecast. S&P 500 climbed 0.49% and Nasdaq 100 gained 1.1%, ending a two-day losing streak, while the Dow fell 0.2% for its third consecutive drop. Tech stocks, including Nvidia (+6.4%), Tesla (+7.6%), Meta Platforms (+2.3%), Palantir Technologies (+7.2%), and Netflix (+2.8%), led the rebound.
• EU - The DAX rose 1.6% to 22,676 on Wednesday, ending a three-day decline, supported by a soft US inflation report and hopes for a Ukraine ceasefire. EU and Canadian retaliatory tariffs against Trump’s metal duties escalated trade tensions. Rheinmetall led gains with a near 10% rise on strong Q4 results. Other top performers included Siemens Energy (+9%), Sartorius AG (+5.1%), MTU Aero Engines (+3.9%), and Heidelberg Materials (+3.9%). Meanwhile, Puma dropped 20% due to weak forecasts, and Porsche fell 0.8% on lower sales and profits.
• HK - The Hang Seng dropped 182 points or 0.8% to 23,600 on Wednesday, reversing the previous session's quiet close, due to widespread losses. Concerns about China's deflation risks and global trade tensions dampened sentiment, though the losses were cushioned by a 34.4% year-on-year increase in China's car sales in February.

Earnings this week: 

• Thursday: D-Wave, DocuSign, Dollar General, Ulta Beauty, Semtech, Futu 
• Friday: Li Auto, Gogoro, WRD, Drilling Tools International, Hudson 

FX: 

• The Canadian dollar advanced following the Bank of Canada's expected quarter-point rate cut, emphasising US tariff risks. USDCAD fell 0.5% to 1.4359, with the loonie leading G-10 gains. The Bank of Canada noted, "Heightened trade tensions and tariffs imposed by the United States will likely slow economic activity and increase inflationary pressures in Canada."
• USDJPY gained 0.4% to 148.64, with the yen underperforming G-10 peers. Bank of Japan Governor Kazuo Ueda showed little concern over rising bond yields, signalling no immediate counteraction.
• EURUSD fell 0.3% to 1.0883 as the European Commission launched countermeasures against US tariffs on EU steel and aluminium.
•  Sweden's krona lagged G-10 currencies as USDSEK rose 0.8% to 10.0907, marking its strongest intraday performance since February 27.

Commodities: 

• Gold neared a record high after cooler US inflation data suggested further Fed easing this year. Its 12% rise in 2023 is driven by global trade war dynamics. Spot gold held steady at $2,938.26 an ounce. 
• Oil steadied after its largest two-week gain, with easing US inflation improving market sentiment. WTI remained below $68 after a 2.2% rise, while Brent crude neared $71.  

Fixed income:

• Treasuries fell with front-end tenors leading the losses after an initial positive response to cooler February CPI data dissipated. The yield curve flattened as futures anticipated less Fed easing this year. Front-end yields were cheaper by ~5bp, long-end rates less than 4bp, flattening the 2s10s curve by ~2bp.

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