Global Market Quick Take: Asia – April 23, 2025

Key points:  

• Macro: Bessent expects de-escalation with China and Trump will not remove Powell 
• Equities: Tesla's stock rose 5% as Musk's focus on the company is seen positively
• FX: USD rebounds, DXY near 99.5; EUR drops below 1.14
• Commodities: Gold pulled back after hitting $3,500
• Fixed income: Yield curve flattens notably around the stable 5-year sector

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Disclaimer: Past performance does not indicate future performance.  

 Macro:  

• Bloomberg reported Treasury Secretary Bessent expects de-escalation in the China tariff standoff, though FBN's Gasparino suggested his comments were overstated. Politico noted the White House is close to trade deals with Japan and India, with details to be finalized later. 
• Trump confirmed he won't remove Federal Reserve Chair Jerome Powell, easing investor concerns about central bank independence and policy stability. 
• IMF warned that rising US tariffs are slowing global growth, reducing its 2024 forecast to 2.8%. The US will be heavily impacted, with 2025 growth cut to 1.8%. Mexico, China, and the Eurozone will also be affected. 
• Canada's industrial producer prices rose by 0.5% in March 2025, surpassing the 0.3% forecast. Non-ferrous metals, wood products, and meat, fish, and dairy drove the increase, while energy and petroleum prices fell, particularly diesel fuel. 

Equities:  

• US - Stocks surged as optimistic White House messages on tariffs raised hopes for US trade deals with key partners. The S&P 500 climbed 2.5%, the Nasdaq 100 rose 2.6%, and the Dow increased by 1,000 points, rebounding from a previous drop. The Cboe VIX Index hovered around 31. Treasury Secretary Scott Bessent described the tariff standoff with China as unsustainable, while Press Secretary Karoline Leavitt highlighted progress in trade negotiations. 3M Co. surged after reaffirming its full-year guidance despite recognising new risks from the ongoing trade war. Boeing Co. gained after agreeing to sell parts of its digital aviation solutions business to Thoma Bravo. Tesla's stock increased by 5.1% despite first-quarter results falling short of analyst estimates, with Musk's focus on the company seen as a positive step for brand recovery.
• HK- HSI rose 167 points, or 0.8%, to 21,562 on Tuesday, reversing earlier losses due to rising U.S. futures. Sentiment improved as China's "national team" and retail investors supported mainland equities, with property, financials, and consumer stocks leading gains.
• JP - Nikkei 225 and Topix Index surged over 2% on Wednesday morning as Japanese shares hit a three-week high, following Wall Street's rebound. US-China trade dispute easing signals and Trump's support for Fed Chair Powell boosted market sentiment. Japan's private sector growth added optimism.

Earnings this week: 
Wednesday: BA, T, IBM, NEE, TXN 
Thursday: INTC, GOOGL, TMUS, LRCX, PEP 
Friday: ABBV, CL, PSX, POR, CNC

FX: 

• USD rebounded as risk appetite returned, supported by Treasury Secretary Bessent's comments on the unsustainable tariff standoff with China and potential de-escalation. A source clarified that an imminent trade deal is overstated, depending on China's compromise. The White House has 18 trade proposals but deals with Japan and India may take months despite being "close”. DXY traded near 99.5.
• EUR was pressured by the dollar's resurgence, dropping below the 1.14 level, further impacted by weak EU consumer confidence data.
• GBP lost the previous day's gains, falling below 1.33 against the dollar, with comments from BoE's Greene indicating that US tariffs pose more of a disinflationary risk than an inflationary one for the UK, although wage growth remains "pretty high."
• JPY weakened due to improved risk sentiment and a stronger dollar, leading to a rebound in USDJPY to above 142 level after briefly testing the 140 level downward.
• Major economic data: Eurozone HCOB Manufacturing PMI Flash, Eurozone HCOB Composite PMI Flash, Eurozone Services PMI Flash, US MBA 30-years Mortgage Rate, Fed Speech, US S&P Global Manufacturing PMI Flash, US New Home Sales

Commodities:

• Copper hit a two-week high as London Metal Exchange trading resumed post-Easter, benefiting from the dollar's decline. A weaker dollar makes industrial commodities cheaper for foreign buyers. Copper increased by 2% to $9,369 per ton on the LME.
• Gold fell after exceeding $3,500 an ounce, as traders took profits from a 10% monthly rally. It declined by 1.5% during US trading as equities rebounded. The metal is overbought, with a 14-day relative-strength index of 78.
• Oil increased after Trump confirmed he wouldn't fire Fed Chair Powell, and a report showed a significant drop in US crude stockpiles. WTI topped $64 a barrel.

Fixed income:  

• Treasury yields were mixed, with the curve flattening notably around the stable 5-year sector. This partially reversed Monday’s curve steepening and aligned with a rebound in US stock benchmarks. US trade negotiations continue to affect risk sentiment, and Treasury Secretary Bessent privately told investors he expects de-escalation with China.

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