Global Market Quick Take: Asia – April 25, 2025

Key points:  

• Macro: Trump hints at talks with China but China denies 
• Equities: Alphabet surges as its revenue and profit surpass expectations
• FX: USD weakens as China refutes any ongoing negotiations with US
• Commodities: Gold is poised for a weekly advance
• Fixed income: Treasuries advanced following a successful seven-year note auction

------------------------------------------------------------------  

Disclaimer: Past performance does not indicate future performance.  

 Macro:  

• US stocks rose on trade optimism after President Trump hinted at talks with China, despite China's denial. The administration considered exceptions for Chinese auto parts, and reports indicated positive talks with India and faster progress with South Korea. 
• Tokyo's Core CPI increased by 3.4%, surpassing March's 2.4% and market expectations of 3.2%. This is the sixth month with inflation at or above the Bank of Japan's 2% target, suggesting a shift towards monetary policy normalization. However, the Bank of Japan is expected to keep its 0.5% policy rate due to uncertainty over new U.S. tariffs. 
• US durable goods orders rose 9.2% to $315.7 billion, exceeding the expected 2% increase, mainly due to a surge in commercial aircraft orders. Transportation equipment orders increased 27%, with nondefense aircraft and parts up 139% and motor vehicles and parts up 2.3%. Excluding transportation, orders were stable. 
• US initial jobless claims increased by 6,000 to 222,000, meeting expectations and staying near a two-month low. Outstanding claims fell by 37,000 to 1,841,000, below the expected 1,880,000, indicating a tight labor market. Federal employee claims rose by 87 to 629, amid scrutiny from Department of Government Efficiency firings. 
• US existing home sales fell 5.6% to an annual rate of 4.02 million units, below the expected 4.13 million, marking the steepest decline in over two years. This occurred despite a slight decrease in borrowing costs, which boosted mortgage applications. 

Equities:  

• US stocks rose for the third consecutive session, led by technology shares, as investors evaluated US-China trade updates and Federal Reserve comments on interest-rate cuts. The S&P 500 increased by 2.0%, and the Nasdaq 100 climbed 2.8%, marking the longest streak of gains since 1974. The Cboe VIX Index remained around 26. International Business Machines Corp. fell 6.6% due to disappointing earnings. Major indexes gained as President Trump appeared to reconsider aggressive trade measures. Investors reviewed earnings reports reflecting unease, with PepsiCo Inc. lowering its profit outlook due to trade uncertainty. 
• Not all stock reactions were negative; Chipotle Mexican Grill Inc. gained despite lowering its outlook, and American Airlines Group Inc. rose despite withdrawing its annual earnings outlook. Google parent Alphabet Inc. reported revenue and profit exceeding expectations, driven by strong search advertising, with shares rising over 5% in extended trading.
• Intel drops 5.7% following a weak forecast for the current period and announcing workforce reductions to align costs with the company's reduced size.
• BYD Co. shares have surged 46% this year, outperforming Tesla Inc., which fell over 35% due to sales declines and trade war concerns. Options traders expect a 4% one-day move in BYD's stock after Friday's results, above the average 3.1% swing. BYD forecasts March-quarter profits of 8.5 to 10 billion yuan ($1.2 billion), showing 86% to 119% growth, with sales up 47% to 183.17 billion yuan, according to Bloomberg estimates.

Earnings this week: 
Friday: ABBV, CL, PSX, POR, CNC

FX: 

• The US dollar weakened against all its G10 counterparts as China refuted claims of ongoing trade deal negotiations with the US, with the Canadian loonie showing the smallest gain. The Bloomberg Dollar Spot Index declined by 0.4%.
• USDJPY dropped 0.6% to 142.60, following a 1.3% increase on Wednesday, its best gain this year.
• EURUSD rose 0.7% to 1.1393. European Central Bank Governing Council member Olli Rehn indicated that further interest rate cuts are likely and a larger reduction shouldn't be dismissed.
• USDCHF decreased 0.4% to 0.8274, while USDCAD was 0.2% weaker at 1.3848.
• Major economic data: UK Retail Sales, Canada Retail Sales, US Michigan Consumer Sentiment

Commodities:

• Oil is set for a weekly decline due to conflicting US-China trade signals. WTI remained below $63 a barrel, down nearly 3% this week, while Brent closed above $66. Trump claimed trade talks with China, despite Beijing's denial.
• Gold is on track for a weekly gain amid volatile trading, with bullion steady near $3,360 an ounce, up 1% this week. President Trump claims ongoing trade talks with China, despite Beijing's denial.

Fixed income:  

• Treasuries rose during the US session, with yields hitting their lowest levels of the day after a strong seven-year note auction with a small tail. Support came from Cleveland Fed President Hammack's comments on CNBC, suggesting potential FOMC action in June with clear data, driving bids at the curve's front-end and middle. Swap spreads widened for the third session amid calmer trading.

For a global look at markets – go to Inspiration.