Quick Take Asia

Global Market Quick Take: Asia – August 4, 2025

Macro 6 minutes to read
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APAC Research

Key points:

  • Macro: NFP revised lower for previous months and Trump fires labour commissioner
  • Equities: S&P 500 down 1.6% after jobs data miss
  • FX: USD dropped as weak NFP and ISM data lowered DXY
  • Commodities: Gold recorded its biggest gain in two months
  • Fixed income: Yield curve bull steepened as short-term Treasuries surge most since 2023

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0804

Disclaimer: Past performance does not indicate future performance.

Macro:

  • US nonfarm payrolls rose by 73K, falling short of the 104K forecast. Significant revisions lowered June's figure from 147K to 14K and May's by 125K, indicating employment in May and June was 258K less than reported, suggesting a faster labor market cooldown. The unemployment rate increased to 4.2% from 4.1%, with 221,000 more unemployed at 7.236 million, while employment decreased by 260,000 to 163.106 million.
  • The ISM Manufacturing PMI fell to 48 in July 2025 from 49 in June, below the expected 49.5, marking five straight months of contraction and the weakest since last October. Declines in supplier deliveries (45.7 vs. 46.7) and employment (43.4 vs. 45.0) led the downturn. Despite increased production, companies remain cautious with hiring.
  • Trump claimed a Biden appointee falsified US jobs numbers before the election to help Kamala Harris and ordered her immediate dismissal.
  • Indian officials will keep buying Russian oil despite threats of extra tariffs from Trump's administration.

Equities: 

  • US - S&P 500 and Nasdaq dropped 1.6% and 2.2%, their biggest declines since April, while the Dow fell 542 points. Payrolls increased by only 73,000 in July, missing expectations, and previous months were revised sharply downward, indicating labor market weakness. Treasury yields fell, and the likelihood of a September Fed rate cut rose above 80%. Sentiment worsened after 10% to 41% tariffs were imposed on imports from Canada, India, and Taiwan. Amazon sank nearly 8% on disappointing cloud forecasts, pulling tech lower, while Apple dipped 2.9% despite strong results. Exxon (-1.8%) and Chevron (-0.1%) beat expectations, Eli Lilly (+3%) rose on drug coverage hopes, and Moderna fell 6.6% due to vaccine concerns.
  • EU - STOXX 50 dropped 2.7% to 5,176, down 3.3% for the week, and the STOXX 600 fell 1.8% to 536, a 2.2% weekly decrease. Tariffs remained at 10% baseline but rose significantly for India (25%), Canada (35%), and Switzerland (39%). Pharmaceutical stocks, including Roche, AstraZeneca, Novartis, and Novo Nordisk, fell 1-3% after President Trump demanded lower prices from 17 drugmakers. Banks and industrials, such as Siemens, Intesa Sanpaolo, ING, BNP Paribas, and Schneider, dropped over 4% due to weak U.S. labor data. AXA plunged 8% following a decline in net income, while Eurozone inflation slightly increased in July.
  • HK - Hang Seng fell 1.1% to 24,508, its lowest in two weeks, marking a fourth consecutive decline. Risk sentiment faded due to new U.S. tariffs on many trading partners and sharp drops in U.S. futures following June inflation data, raising fears of further inflation pressures. U.S.-China trade talks ended without progress, leaving tariff decisions to President Trump. However, Hong Kong's GDP grew 3.1% year-on-year in Q2, the strongest since Q4 2023, driven by robust exports and domestic demand. Smoore Holdings (-5.7%), Prada Spa (-5.5%), Innovent Biologics (-5.3%), and Swire Properties (-3.1%) were notable losers, while Xpeng dipped 0.4% despite strong July deliveries.

Earnings this week:

  • Monday: Palantir (PLTR), Hims & Hers (HIMS)
  • Tuesday: Pfizer (PFE), Amgen (AMGN), AMD (AMD), Super Micro (SMCI)
  • Wednesday: DoorDash (DASH), Instacart (CART), Uber (UBER), Lyft (LYFT), Walt Disney (DIS), Airbnb (ABNB), DraftKings (DKNG), Global Payments (GPN), Honda (7267), Novo Nordisk (NOVO), UOB (U11)
  • Thursday: DBS (D05), Eli Lilly (LLY), Kenvue (KVUE), Warner Bros (WBD), Block (XYZ), US Foods (USFD), Semiconductor Manufacturing (SMIC), SoftBank (9984), Sony (6758), Toyota (7203)
  • Friday: Wendy’s (WEN), McDonald's (MCD), Restaurant Brands (QSR)

FX:

  • USD weakened due to reduced US NFP figures and disappointing ISM PMI, causing the DXY to drop below 99. Trump raised tariffs, increasing average rates to 15.2%.
  • USDJPY moved sharply, peaking at 150.90 and dropping to 147.60 as the US jobs report spurred Yen recovery from earlier losses.
  • EURUSD climbed above 1.1570, bolstered by firmer-than-expected Eurozone inflation despite muted reactions. The ECB remains confident in its policy position amid economic uncertainties.
  • GBP, NZD and AUD gained slightly, taking advantage of Dollar weakness and US market downturns.
  • Economic Calendar – US June Factory Orders and Durable Goods Orders

Commodities:

  • Oil prices fell as OPEC+ agreed to a major output increase, raising oversupply concerns amid the US-led trade war. Brent approached $69, and WTI near $67, with 547,000 barrels per day added from September. A further 1.66 million barrels daily may be released, but details are unclear.
  • Copper fell for the second week in London after President Trump's surprise exemption of refined copper from US import tariffs. It steadied on Friday but was down 1.4% for the week.
  • Gold remained stable after its largest two-month gain on Friday, as traders evaluated weak US job data and its potential impact on Federal Reserve interest rates. It traded around $3,360 an ounce, following a 2.2% rise while equities declined.

Fixed income:

  • Treasury bonds surged, especially at the short end, after disappointing July jobs data and downward revisions to the previous month's figures. This prompted Treasuries to rally, with short-term yields seeing their largest drop since late 2023. After the jobs report, 2-year yields fell about 25 basis points, with limited demand to reverse the move. The market began pricing in more rate cuts for the year, solidifying expectations for a reduction at the September FOMC meeting. Fed-dated OIS indicated 58 basis points of easing across the remaining meetings, up from 32 basis points previously, with around 23 basis points anticipated for September.

 

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