Global Market Quick Take: Asia – August 7, 2025

Global Market Quick Take: Asia – August 7, 2025

Key points:

• Macro: US increases India tariffs by an additional 25%
• Equities:Apple gained 5% after $100b US investment
• FX: EUR rose over 1.1650; boosted by improving retail sales
• Commodities: Oil fell for five days, longest since January
• Fixed income: Treasuries twist steepened as the long end lagged

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Disclaimer: Past performance does not indicate future performance.

Macro:

• The White House announced a new 25% tariff on Indian imports due to India's Russian oil imports, doubling U.S. levies on India to 50%. President Trump stated this in an executive order. The tariffs start in 21 days, with an initial 25% tariff beginning Thursday. This action signals Trump's stance against nations purchasing Russian oil amid the Ukraine conflict. India called the tariffs “extremely unfortunate,” citing similar actions by other countries.
• Trump announced he'll nominate a replacement for Fed Governor Adriana Kugler by week's end and has four finalists for Fed Chair Jerome Powell's successor. Market expectations for a September rate cut have risen to 90% due to soft economic data, including stagnant services and increased prices from the latest ISM report, and just 73K payrolls added in July, indicating a labor market slowdown.
• US mortgage applications increased by 3.1% in late July, offsetting a previous 3.8% decline and marking the highest growth rate in nearly a month, per the Mortgage Bankers Association.
• India's trade deficit in June 2025 narrowed to $18.8 billion from $21 billion in June 2024, ending a three-month trend of widening deficits and beating forecasts of a $22.2 billion deficit.

Equities: 

• US - U.S. stocks rose on Wednesday, driven by strong earnings and Apple's major announcement. S&P 500 increased 0.7%, the Dow gained 82 points, and the Nasdaq climbed 1.2%, fueled by Apple's 5% jump after pledging $100 billion to boost U.S. manufacturing. McDonald's rose 3% after exceeding earnings expectations, and Arista Networks soared 17.4% on a strong revenue forecast. Although Disney and Uber posted positive results, stocks like AMD, Snap, and Super Micro Computer dropped after disappointing reports. Investor optimism was bolstered by the likelihood of a Fed rate cut in September, with odds rising to over 93% following weak labor data. However, trade tensions heightened as President Trump imposed a 25% tariff on Indian goods due to ongoing Russian oil imports.
• EU - European stocks mostly rose on Wednesday, maintaining early week gains as markets evaluated the impact of U.S. tariffs on regional growth and corporate returns. The STOXX 50 increased by 0.2% to 2,63, while the STOXX 600 fell 0.1% due to its pharmaceutical sector exposure. Pharma stocks dropped sharply after President Trump threatened a 250% tariff on imports, aiming to reduce drug prices. Sanofi and Merck fell over 2%, with Roche, AstraZeneca, and Novartis losing 1% to 3.5% outside the Eurozone. Bayer sank nearly 10% and Novo Nordisk dropped 5.5% due to poor earnings. In contrast, financials BBVA and Munich Re gained over 1.5%, and Airbus rose 1.5%.
• HK - Hang Seng ended nearly flat at 24,911 on Wednesday after minor declines earlier in the day. Traders considered President Trump's remarks about a nearing US-China trade deal and a potential meeting with President Xi this year. Consumer and tech stocks saw modest gains as US futures rose ahead of corporate earnings and Fed speeches. Financials and property sectors dipped slightly. Pop Mart Intl. (7.9%), BYD Electronics (6.7%), and Akeso Inc. (4.7%) saw gains. Meanwhile, Cathay Pacific fell 9.1% due to disappointing H1 results, with Li Auto (-5.4%) and Anta Sports (-3.2%) also experiencing declines.
• SG - Straits Times Index (STI) saw a modest gain, closing up 0.3% at 4,221.170 on Wednesday. Activity was driven by YZJ Shipbldg SGD as the most traded stock, with notable increases from Keppel (+1.43%) and DBS (+1.27%). Despite the index's overall rise, Sembcorp Ind and CapLand Ascendas REIT lagged behind, finishing at the lower end. DBS Group reported a second-quarter profit above expectations, boosted by trading and wealth fees. Net income rose 1% to S$2.82 billion ($2.2 billion), exceeding the S$2.78 billion analyst estimate.

Earnings this week:

• Thursday: DBS (D05), UOB (U11), 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:

• Dollar index declined for the fourth consecutive session, reaching 98.4, as traders anticipated news on possible leadership changes at the Federal Reserve. President Trump announced he will nominate a successor for Fed Governor Adriana Kugler by week's end and has shortlisted four candidates for replacing Fed Chair Jerome Powell.
• EUR gained from the dollar’s decline rose above 1.1650 and a rebound in Eurozone retail sales. EU retail sales grew 0.3% in June and accelerated yearly growth to 3.1%.
• GBP strengthened against USD but weakened against EUR, with EURGBP at 0.8727 amid UK budget concerns. Attention shifts to the BoE’s rate decision, expecting a 25bps cut.
• CHF modestly strengthened among G10 currencies in a weak USD scenario, limited by unsuccessful Swiss-US trade negotiations. USDCHF is currently around 0.8060, EURCHF at 0.9400.
• JPY was choppy with the downside cushioned by support at the 147 level and amid widening US-Japan yield differentials.
  
  Economic Calendar – Australia Balance of Trade, China Balance of Trade, Germany Balance of Trade, BoE Interest Rate Decision, US Initial Jobless Claims, US Nonfarm Productivity, Canada Ivey PMI

Commodities:

• Oil continued its five-day decline, the longest since January, as traders looked beyond US actions against Russian crude buyers and focused on Trump’s Ukraine diplomacy. WTI hovered below $65, Brent near $67. Trump doubled tariffs on Indian goods but hasn't targeted China yet.
• Gold held a moderate loss as traders overlooked Trump's trade threats, including 100% tariffs on chips. Bullion steadied at $3,370 after a 0.3% dip, amid Trump's push for US production.
  
  

  Fixed income:
  
  

• Treasuries experienced a twist steepening as the long end underperformed while the 7-year sector remained stable, impacted by a weak 10-year auction. Long-end yields were cheaper by up to 3bps, while the front end became richer by 1.5bps. This steepening widened the 2s10s and 5s30s spreads by 3bps and 4.5bps respectively. Focus is now on Thursday's $25 billion 30-year bond issue. A flash crash in Treasury futures drew attention, seemingly flow-driven with no clear catalyst. Japan's Ministry of Finance plans to sell ¥700 billion in June 2055 bonds.

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