PETER’S BUSINESS & FINANCE BRIEFING – Thursday 10 July 2025, 06:00 Hong Kong
● China producer prices fall most in nearly 2 years ● Malaysia cuts rates for first time since 2020 ● Fed policymakers see risks tariffs will cause ‘persistent’ inflation
Thursday’s Opening Call
Hang Seng (Hong Kong) Projected Open: 23,890 -2 points -0.0%
Nikkei 225 (Japan) Projected Open: 39,950 +129 points +0.3%
Quick Summary - 4 Things To Know Before Asian Markets Open
China’s producer prices dropped 3.6% in June from a year earlier, marking its largest decline in nearly two years, as a deepening price war rippled through the economy. It was the 33rd straight month of falling prices and a 23-month low according to data from the National Bureau of Statistics (NBS) Wednesday. However, Consumer Price Index (CPI) inflation returned to positive year-on-year growth for the first time since January. The CPI edged 0.1% higher in June from a year ago, compared with -0.1% y/y in May.
Malaysia lowered its benchmark interest rate for the first time in five years, acting after Donald Trump increased a threatened tariff on the Southeast Asian country to 25% from 24% previously announced. Bank Negara Malaysia (BNM) cut the overnight policy rate by 25 bps to 2.75% on Wednesday, the first easing since July 2020.
Donald Trump has sowed chaos in metals markets by indicating the US would implement a higher-than-expected 50% tariff on copper imports, spurring a record spike in New York futures. Contracts on the Comex surged to an unprecedented 138% premium over London Metal Exchange prices, the global benchmark, in the aftermath of Trump’s comments. It means that US consumers could be paying around $15,000 per metric ton for copper, while the rest of the world pays around $10,000, assuming the 50% tariff rate comes into effect at the start of the month. Analysts say this huge discrepancy will start to have a major economic impact in the US.
Federal Reserve officials diverged at their June meeting about how aggressively they would be willing to cut interest rates. A majority of policymakers at their meeting last month expected they would be able to resume interest rate cuts this year but warned that Donald Trump’s tariffs would have “persistent effects” on inflation. Minutes from the June 17-18 meeting released Wednesday showed that policymakers largely held to a wait-and-see position on future rate moves. Moreover, the minutes suggested officials thought current rates might not be far above an estimated “neutral” setting that neither spurs nor slows growth. That means even if officials did resume lowering rates this year without signs of serious economic deterioration, they might only envision a fairly shallow series of reductions.
Trump Unveils More Tariff Letters
Donald Trump unveiled a new round of tariff demand letters on Wednesday with levies set to hit in August on imported goods from partners who fail to reach agreements with the US. The latest letters, revealed via Truth Social screenshots, were sent to the leaders of the Philippines (which was given a tariff rate of 20%), Brunei (25%), Moldova (25%), Algeria (30%), Iraq (30%), Libya (30%) and Sri Lanka (30%). Trump had teased the announcement, saying Tuesday evening he would provide an update to the trade status of at least seven countries on Wednesday morning, Washington time, with more to come in the afternoon. The tariff rates for the 21 countries targeted so far range from 20% to 40%. The letters note that the US will “perhaps” consider adjusting the new tariff levels, “depending on our relationship with your Country.” To that end, Trump said later Wednesday the US will slap a 50% tariff on Brazil’s imports, partly in retaliation for the ongoing prosecution of the country’s former president, Jair Bolsonaro. Trump said the new tariff, a massive jump from the 10% rate the US imposed on Brazil in early April, was also spurred by the “very unfair trade relationship” with the country, calling it “far from Reciprocal.”
Trump began notifying trading partners of the new rates on Monday ahead of what was initially a deadline this week for countries to wrap up trade negotiations with his administration. The tariff notifications sent to 14 countries on Monday largely kept in place the rates Trump had earlier said nations would face if talks did not secure agreements. Japan, South Korea and Malaysia were hit with 25% tariffs, while Laos and Myanmar were hit with 40% levies.
Commerce Secretary Howard Lutnick said he expected an additional 15-20 letters to be released in the coming two days. But the new letters, unilaterally setting duties on countries that fail to reach deals, came alongside an executive order delaying the tariff date for three weeks, effectively giving trading partners an extension for talks. But Trump stressed he would not offer additional extensions on country-specific levies set to hit on 1 August. Trump also said he would impose a 50% rate on copper products being sent into the US and could announce substantial new rates on imports of pharmaceuticals, with drug companies potentially facing a tax as high as 200% on imports.
Despite previously indicating he was close to a trade deal with India, Trump said he still planned to punish the country for its participation in the BRICS forum. Trump said the group of developing countries was “set up to hurt us.” “I can play that game too so anybody that’s in BRICS is getting a 10% tariff addition," Trump said.
Some analysts are saying Donald Trump’s latest act of trade brinkmanship risks creating a “tariff wall” around the manufacturing hubs of south-east Asia, leading to higher prices and tough choices for US consumers and industry. Economists said that, while it was hard to predict at what level duties would finally settle, the outline of a new Asian tariff wall was beginning to take shape that would warp regional and global supply chains. Mark Williams, chief Asia economist at consultancy Capital Economics, which tracks rerouting of Chinese goods through other Asian countries said that Trump’s tariff wall would have regional supply chain impacts, including potentially slowing the shift of Chinese manufacturing into the 10 countries of the Association of Southeast Asian Nations regional grouping, which accelerated during Trump’s first term. “A relatively high tariff on countries that could substitute for China in global manufacturing would probably slow the shift of firms out of China because there would be less urgency if the wedge between tariffs on China and other manufacturing economies was smaller,” Williams said. But even if tariffs settled at a relatively high rate, they would fail to achieve the administration’s stated ambition of pulling manufacturing back into the US, Williams argued. “The choice for consumers and firms in the US will be between paying more for a foreign-made product that now has an additional tariff or going without. And in many sectors US production wouldn’t be competitive with imports, even if tariffs have to be paid,” he said.
Copper Market In Turmoil As Trump Touts 50% Tariff On US Imports
Donald Trump has sowed chaos in metals markets by indicating the US would implement a higher-than-expected 50% tariff on copper imports, spurring a record spike in New York futures. The plan was announced in an off-the-cuff comment to reporters. The US president aims to encourage more mining and smelting at home. The US imports about 60% of its copper, with the rest met by domestic mines or recycled scrap. He’s already raised fees on steel and aluminium imports, while probes into flows of multiple other metals are in train. The spectre of higher tariff rates on copper set off a rush to lock in supplies and prices for the metal, which is widely used in electronics, construction and industrial equipment.
US copper prices soared to a record high Tuesday. Futures contracts for copper jumped 13% in the largest single-day price surge in records going back to 1968. On Wednesday, copper futures fell 2.5% reflecting fears that the tariffs would reduce copper consumption in the US and dent global demand. Contracts on the Comex surged to an unprecedented 138% premium over London Metal Exchange prices, the global benchmark, in the aftermath of Trump’s comments. The gap in US Comex futures over those on the LME has fluctuated between $500 and $1,500 since Trump announced a probe into copper in February. Historically, that rate has been near-zero, and was around the $150 level in 2024. London-based agency Benchmark Mineral Intelligence said that US consumers could be paying around $15,000 per metric ton for copper, while the rest of the world pays around $10,000, assuming the 50% tariff rate comes into effect at the start of the month. This huge discrepancy will start to have a major economic impact, Daan de Jonge, Benchmark’s lead analyst for copper demand and prices said.
If the tariff takes hold, it will inflict higher costs across a broad section of the US economy due to the myriads of industries and applications that rely on copper. US buyers have already warned that the measure risks undermining Trump’s core ambitions to revive manufacturing and challenge China’s industrial might. Trump’s 50% pledge comes as copper demand is expected to surge over the coming decade, with data centres, automakers, power companies and others scouring the globe for supplies. Retooling power and transportation systems to run on renewable energy will require far more copper than the companies that produce it are currently committed to deliver.
According to Marcus Garvey, Macquarie Group's head of commodities strategy, "the degree of impact will heavily depend on the details" of the tariff, including its rate and potential exemptions. Jefferies analysts wrote that "the US does not have nearly enough mine/smelter/refinery capacity to be self-sufficient in copper", and that import tariffs are likely to lead to continued significant price premiums in the US. Citigroup called it a watershed moment for copper, closing the window for significant shipments into the US market. “The longer-term aim of the Trump administration may be for the US to be fully self-sufficient in copper, but mines take too long to develop for this to be achieved in less than a 10-year time horizon,” Jefferies analysts wrote. “The US will still rely on foreign mines to meet demand for the foreseeable future.”
Vietnam Looking To Finalise Trade Deal With US
Vietnam’s negotiators are still working to finalize the details of the trade deal announced by US President Donald Trump last week. According to Trump, the agreement with Communist Party chief To Lam includes a 20% tariff on Vietnamese exports to the US and a 40% levy on any goods deemed to be transshipped through the country. Products sent from Vietnam to the US had faced a 46% levy, which was set to go into effect this week as part of Trump's "reciprocal" tariffs announced in April. Under the agreement, Vietnam will charge no tariffs on US products, Trump said in a social media post.
China, a top exporter to the US, has reportedly used Vietnam as a transshipment hub. Peter Navarro, Trump's senior counsellor on trade and manufacturing, has said that a third of all Vietnamese exports to the US were actually Chinese products shipped through Vietnam. One of the biggest sticking points throughout negotiations was Vietnam’s trade relationship with China. The US demanded more action from Hanoi to prevent Chinese goods being rerouted and repackaged through Vietnam to skirt higher tariffs. Beijing said it was examining the trade deal and would retaliate if its interests were hurt.
Although Trump shared the broad contours of the agreement, the White House has not yet released a term sheet or published any kind of proclamation codifying the arrangement. It was unclear from Trump’s post when the deal will take effect, or if it has been officially signed by both parties. And some of the details could still be in development. Vietnam’s negotiators are still working to finalize the details of the deal. The 20% tariff is a significant reduction from the previously threatened 46% rate and puts it ahead of regional rivals such as Thailand, Malaysia and Indonesia, who were sent letters Monday setting out tariffs from 25% upwards.
Vietnam aims to sign more free trade agreements, improve supply chains, and diversify its export markets as it grapples with global uncertainty posed by the US tariff offensive. “The global economy is being impacted by geopolitical competition, climate change, digital transformation, and especially tariff policies from major markets such as the United States,” deputy trade minister Phan Thi Thang said at an investment summit in Hanoi Wednesday. “However, Vietnam still has many opportunities to break through.” The nation’s trade ministry is working with businesses to respond to tariffs, including improving product quality, Thang said. “This is an opportunity to increase added-value and to shift to high-tech products.” The nation is keeping its target of at least 8% GDP growth this year and will continue to strive for economic expansion of 10% or above in 2026-2030, Deputy Prime Minister Ho Duc Phoc said at the same investment summit Wednesday.
Vietnam, whose exports to the US comprised 30% of its GDP last year, is especially vulnerable to Trump’s tariffs. Vietnam was the sixth-biggest supplier of US imports last year, sending goods worth almost US$137 billion, according to Census Bureau data. Its trade surplus with the US was the third largest globally on a country basis behind only China and Mexico. Shipments in May jumped 35% as firms sought to get goods onto vessels as quickly as possible ahead of the deadline. US exports to Vietnam were worth just US$15 billion last year.
Taiwan Signals Cautious Optimism After Avoiding US Tariff Letter
Taiwan is cautiously optimistic about talks with the US after avoiding a letter from the Trump administration notifying trading partners of new tariff rates. A national security official in Taipei said it would have been more favourable not to receive one of the letters, and getting one suggests a more difficult position in the talks. Taiwan officials are eager to secure a deal with the Trump administration to maintain economic growth and ensure US military backing remains in place as China ramps up its threats. Taiwan was one of the relatively few parties that’s been making steady progress in its negotiations with the US, the official added on Tuesday. Last month, Taiwan said it was making “constructive progress” in a second round of talks with the US, and officials from Taipei were in Washington this week for a third session. Still, the official said a final verdict on the talks would have to wait until the two sides produced concrete results.
China Producer Prices Fall Most In Nearly 2 Years
China’s producer prices dropped 3.6% in June from a year earlier, marking its largest decline in nearly two years, as a deepening price war rippled through the economy. It was the 33rd straight month of falling prices and a 23-month low according to data from the National Bureau of Statistics (NBS) Wednesday. The drop in the Producer Price Index (PPI) came in worse than the expected 3.2% in a Reuters poll and marked its biggest fall since July 2023. The PPI has been mired in a multi-year deflationary streak since September 2022. Monthly, PPI fell 0.4% in June, matching the pace of March, April, and May.
However, Consumer Price Index (CPI) inflation returned to positive year-on-year growth for the first time since January. The CPI edged 0.1% higher in June from a year ago, compared with -0.1% y/y in May, returning to growth after four consecutive months of declines. Economists had forecast a flat reading compared to the same period a year earlier, according to a Reuters poll. On a month-on-month basis, though, downward price pressures persist. The CPI fell 0.1% m/m, after May's 0.2% drop, pointing to the fourth monthly decline this year.
By subcategory, food remained in deflationary territory at -0.3% y/y, the fifth straight month of negative food prices. Most food products remained stuck in deflation, with the biggest drags from pork (-8.5% vs. 3.1% in May) and eggs (-7.7%). Non-food inflation fared better on the month with a 0.1% y/y rise, helping to offset the drag from food prices.
Core CPI, stripping out food and energy prices, rose 0.7% from a year ago, the biggest increase in 14 months, according to the NBS and following a 0.6% gain in May.
Through the first half of the year, China's CPI inflation remains slightly in deflation at -0.1% y/y, while PPI deflation is well entrenched at -2.8% y/y. Deflation remains a concern in China with the economy facing heavy price competition as well as pay freezes and pay cuts. Last week, Chinese policymakers, in a top economic policy meeting chaired by President Xi Jinping, criticized the excessive price competition by Chinese companies to entice consumers and clear excess inventory. They have recently shifted attention toward addressing the problem, encouraging consolidation and restructuring, and addressing non-market practices resulting in excessive price competition.
“It is too early to call the end of deflation at this stage as the momentum in the property sector is still weakening and the ‘anti-involution’ campaign is still at its early phase,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. Involution, known colloquially as “neijuan” in China, refers to the price wars plaguing some consumer sectors.
“Without a strong policy stimulus, it’s hard to escape the ongoing deflationary spiral,” said Larry Hu, chief China economist at Macquarie, adding that the momentum in China’s exports in recent months has partly pared back Beijing’s desire to stimulate consumption in any meaningful way.
Fed Minutes Show Policymakers Divided On Number Of Rate Cuts
Federal Reserve officials diverged at their June meeting about how aggressively they would be willing to cut interest rates. A majority of policymakers at their meeting last month expected they would be able to resume interest rate cuts this year, but only two of them voiced support for a rate cut as soon as the central bank’s next gathering later this month. Minutes from the June 17-18 meeting released Wednesday showed that policymakers largely held to a wait-and-see position on future rate moves. “Participants agreed that although uncertainty about inflation and the economic outlook had decreased, it remained appropriate to take a careful approach in adjusting monetary policy,” the document stated. “While a few participants noted that tariffs would lead to a one-time increase in prices and would not affect longer-term inflation expectations, most participants noted the risk that tariffs could have more persistent effects,” the minutes said. The meeting ended with Federal Open Market Committee members voting unanimously to hold the central bank’s key borrowing rate in a range between 4.25%-4.5%, where it has been since December 2024.
The minutes showed officials were split between concerns over tariff-fuelled inflation and signs of labour market weakness. But the minutes noted that a meaningful minority of officials thought inflation had not made enough progress toward the Fed’s 2% goal, even before any larger effects from tariffs in the months ahead, to justify lowering rates. Moreover, the minutes suggested officials, potentially from both camps, thought current rates might not be far above an estimated “neutral” setting that neither spurs nor slows growth. That means even if officials did resume lowering rates this year without signs of serious economic deterioration, they might only envision a fairly shallow series of reductions. Opinions ranged from a “couple” of officials who said the next cut could come as soon as this month to “some” who thought no reductions this year would be appropriate. Though the minutes do not mention names, Fed Governors Michelle Bowman and Christopher Waller have gone on record saying they could see their way to cutting rates as soon as the July 29-30 Fed meeting if inflation stays under control.
Trump Says Powell Should ‘Resign Immediately’
Donald Trump said yesterday Jerome Powell should "resign immediately" if allegations that the Federal Reserve chair misled lawmakers prove true. Trump called Powell "terrible" and told reporters that if the allegations about deceiving Congress over renovations to the Federal Reserve's headquarters are true, it would be grounds for a swift exit. We should get somebody in there that’s going to lower interest rates.” Trump accused Powell of "whining like a baby about non-existent inflation for months and refusing to do the right thing" in a social media post and wrote "CUT INTEREST RATES JEROME — NOW IS THE TIME!"
Trump has repeatedly attacked Powell over the bank’s decisions to hold rates steady this year, saying last month that he would choose a successor who will cut borrowing costs. Powell’s term as chair expires in May 2026.
Trump’s trade advisor Peter Navarro, in an interview with Fox Business on Tuesday, suggested other governors should intervene if Powell is disinclined to lower rates at the next Federal Open Market Committee meeting. “The problem is we’ve got a partisan Fed with Jay Powell, and what I’m calling for on July 29th and 30th, if Powell can’t get religion on Trumponomics, it’s the Board of Governors to rein him in,” Navarro said. “I don’t know why, I mean, you’ve got some intelligent people on that board, why are they letting Jay Powell lead them around by the nose?”
New Zealand Pauses Rate Cuts
The Reserve Bank of New Zealand (RBNZ) paused its interest rate cutting campaign at its latest monetary policy meeting on Wednesday. The central bank held its official cash rate (OCR) steady at 3.25% as widely expected, following six consecutive cuts since August 2024, when it rolled out its first rate reduction since March 2020. It leaves the OCR at its lowest level since August 2022. The central bank has taken a more cautious stance amid lingering concerns about domestic inflation, which is currently at 2.5%, and rising risks that global trade tensions could add to inflationary pressures. Inflation remains within the MPC’s 1–3% target range. Policymakers said they expect to continue lowering rates in line with the May forecasts, assuming medium-term inflation continues to ease. Markets anticipate ongoing economic weakness will give the RBNZ room to deliver at least one more rate cut later this year.
Meanwhile, New Zealand's economy contracted by 0.7% year-on-year in Q1, slightly better than the expected 0.8% decline and an improvement from the 1.3% contraction in Q4 2024. Despite this modest recovery, the MPC expressed concern about the pace of the rebound, noting that ongoing uncertainty could prompt more cautious behaviour from households and businesses.
Malaysia Cuts Rate For First Time Since 2020
Malaysia lowered its benchmark interest rate for the first time in five years, acting after Donald Trump increased a threatened tariff on the Southeast Asian country to 25% from 24% previously announced. Bank Negara Malaysia (BNM) cut the overnight policy rate by 25 bps to 2.75% on Wednesday, the first easing since July 2020.
BNM said in a statement, “the balance of risks to the growth outlook remains tilted to the downside, stemming mainly from a slower global trade, weaker sentiment, as well as lower-than-expected commodity production. The reduction in the OPR is, therefore, a pre-emptive measure aimed at preserving Malaysia’s steady growth path amid moderate inflation prospects.”
A pause on the higher 25% reciprocal tariff remains in effect until August 1, though most exports to the US are already subject to a 10% tariff. The Malaysian government on Tuesday said it is “committed to continuing engagement with the US” over a trade deal.
Malaysia’s inflation is expected to remain moderate this year. Price pressures from global commodity prices will likely be limited, while domestic reforms are expected to have a “contained” impact, BNM said. The BNM previously said it expects inflation to average below 3% in 2025, from 1.8% last year.
The ringgit fell 0.3% versus the dollar, following BNM’s policy decision. The currency has strengthened 5.7% in the past three months. The central bank also reiterated its view for the currency, saying the ringgit performance will continue to be primarily driven by external factors. “Malaysia’s favourable economic prospects and domestic structural reforms, complemented by ongoing initiatives to encourage flows, will continue to provide enduring support to the ringgit,” the central bank added.
Indonesia Retail Sales Rebound In May
Retail sales in Indonesia grew by 1.9% year-on-year in May, rebounding from a 0.3% decline in April. The recovery was mainly driven by increased sales of food, beverages, and tobacco (4.0% vs 1.2% in April), as well as cultural and recreational goods (4.7% vs 3.6%). On a monthly basis, however, retail sales fell 1.3% in May, following a sharper 5.1% decline in April. The softer monthly contraction was partly due to increased spending during several holidays in May.
Trump Looks To Ban Chinese Groups From Buying US Farmland
The Trump administration plans to ban Chinese groups from buying farmland in the US, particularly near military bases, out of rising concern that their purchases are undermining national security, the FT reported. US agriculture secretary Brooke Rollins on Tuesday said the administration would work with state and local governments to take “swift legislative and executive action to ban the purchase of American farmland by Chinese nationals and other foreign adversaries”. “American agriculture is not just about feeding our families but about protecting our nation and standing up to foreign adversaries who are buying our farmland, stealing our research and creating dangerous vulnerabilities in the very systems that sustain us,” said Rollins as she unveiled what she called the National Farm Security Action Plan. Speaking alongside Rollins, US defence secretary Pete Hegseth said that “foreign ownership of land near strategic bases and US military installations poses a serious threat to our national security”.
According to 2023 agriculture department figures, Chinese entities owned 277,336 acres of American farmland, just under 1% of the total owned by foreign groups. The Chinese purchases were concentrated in Texas, North Carolina, Missouri, Utah and Florida.
China’s embassy in Washington criticised the move, saying the investment had created jobs and contributed to economic growth in the US. “Overstretching the concept of national security and politicising economic and trade investment issues violates the principles of market economy and international trade norms, only to undercut international confidence in the US market environment,” said Liu Pengyu, the embassy spokesperson.
China Is Building 74% Of All Current Solar & Wind Projects Globally
Almost three-quarters of all solar and wind power projects being built globally are in China, says a new report that highlights the country’s rapid expansion of renewable energy sources. China is building 510 gigawatts of utility-scale solar and wind projects, according to data from the Global Energy Monitor, a non-governmental organisation based in San Francisco. That compares with about 689GW under construction globally, GEM said. A rough rule of thumb is that a gigawatt can potentially supply electricity for about 1mn homes.
“China is leading the world in global renewable energy build-out,” the report said. “It continues to add solar and wind power at a record pace.” China’s expansion of clean energy sources is important for efforts to fight climate change, given the country’s dominant role in global manufacturing. China is responsible for about one-third of global greenhouse gas emissions but is finalising details of new climate change targets which it says it will announce before this year’s UN Climate Change Conference in Belém, Brazil.
Indonesia Hit As Global Nickel Prices Tumble
Indonesia’s big bet on nickel is at risk of turning sour, as plunging prices and a supply crunch of ore force refiners to reduce output and lay off workers, the Financial Times said in a report Wednesday. The country, which boasts the world’s largest nickel reserves, invested heavily to meet surging demand for the metal, which is critical to stainless steel and electric vehicle batteries. But the resulting swell of supply has sent nickel prices to five-year lows on the London Metal Exchange, hurting global competitors, and in recent months, Indonesia itself.
Nickel is one of Indonesia’s main economic drivers and is central to President Prabowo Subianto’s plans to boost growth. Jakarta says nickel accounts for about 10% of the country’s annual exports, equivalent to more than US$30bn, and the industry employs tens of thousands of people. “What Indonesia has done is they have overexpanded,” said Jim Lennon, an analyst at Macquarie. He estimated that Indonesia had 1.5mn tonnes of refined nickel production in the pipeline, in addition to the 2.2mn tonnes it produced last year.
Indonesia rapidly seized a dominant position in the nickel processing market, controlling almost two-thirds of the global supply of the refined metal, up from just 6% a decade ago, according to Macquarie. That was mainly thanks to Prabowo’s predecessor Joko Widodo’s move to block exports of nickel ore in 2020, prompting companies to set up onshore processing plants. But now, Indonesia cannot keep up with demand for ore from the growing number of refiners who rushed in to take advantage of the country’s vast reserves. While Indonesia’s overall refined nickel output is still expanding, with Jakarta expected to control three-fourths of the global supply by the end of the decade, some producers are shutting refineries and cutting output, industry participants said.
Hong Kong Jockey Club To Unload $1bn In US Funds
The Hong Kong Jockey Club is divesting as much as US$1 billion in funds held with Blackstone and other buyout firms, offloading US assets amid escalating trade tensions, Bloomberg News reported Wednesday. The sales come as other Asia funds and wealthy investors dial back investments in the US, concerned that trade wars have made the world’s largest economy much less predictable. The Jockey Club’s assets are being sold through different vehicles, with one containing some US$700 million of assets, according to the Bloomberg report.
The jockey club, which operates the finance hub’s horse racing monopoly and is one of the city’s biggest asset allocators, is selling mostly US assets held with firms that also include TA Associates Management, Warburg Pincus, and Clayton Dubilier & Rice. It’s unusual for the Jockey Club to sell such a large chunk of assets in the secondary market. Investors in private equity funds often turn to the secondary market to unload assets before the fund expires to access capital sooner. In exchange for providing this liquidity, buyers often demand discounts.
Temasek Divestments Hit Record
Singapore’s state-owned investor, Temasek, reported divestments worth S$42 billion (US$33bn) for its last fiscal year, its largest annual disposal on record, and its net portfolio value hit a new high of S$434 billion (US$339bn). The firm's one-year total shareholder return was 11.8%, and its holdings in public securities made up more than half the value of its total portfolio, with unlisted assets comprising 49% of its holdings. Temasek invested S$52 billion, resulting in net investments of S$10 billion, and took stakes in companies including French renewable energy company Neoen, Chinese Internet giant Tencent, and Indian snacks maker Haldiram Snacks Food. Temasek’s returns, along with those from sovereign wealth fund GIC and the Monetary Authority of Singapore, are one of the biggest sources of funding for the country’s national budget.
Temasek’s Singapore-listed companies were responsible for much of its gain. DBS Group Holdings climbed 42% during fiscal year 2025, Singapore Telecommunications rose more than a third, and weapons maker ST Engineering increased 69%. Despite China’s stock market experiencing a rebound and Temasek’s assets in the country growing in dollar terms, the firm’s exposure to the world’s second-largest economy shrank to 18% of its portfolio. China had made up 29% of the portfolio in March 2020. In contrast, its allocation to the Americas rose to 24%, while India increased to 8%. The US continues to be the largest foreign destination for Temasek’s capital.
New World To Sell China Property Assets After Loan Deal
New World Development is seeking to divest real estate projects in mainland China after pulling off a US$11bn refinancing deal, according to Bloomberg News. The company is planning to sell property assets in China, including landmarks like its K11 buildings, and favours buyers such as investment funds or private firms that can make swift decisions. New World remains in the spotlight as it continues to face liquidity stress and is seeking to raise as much as US$2 billion through a new loan that would be backed by its crown jewel asset, Victoria Dockside in Hong Kong. Jeff Zhang, an analyst with Morningstar said, "the prior refinancing has only eased the liquidity strains but not reduced overall debt balance".
New World had HK$50 billion (US$6.4bn) in completed investment properties in mainland China as of December 31, according to Bloomberg Intelligence. Its prospects for selling the assets are clouded by the country’s ongoing real estate downturn and slowing economy. In Shanghai, the company is seeking 2.85 billion yuan (US$397mn) for its K11 tower, according to a property agent brochure.
Controlled by the family empire of Hong Kong tycoon Henry Cheng, New World has one of the highest debt burdens of any big developer in the city. Its net debt reached 95.5% of shareholders’ equity as of December. The firm reported its first annual loss in 20 years for the 12 months ended June 2024.
Asia-Pacific Stocks Mixed As Tariff Uncertainty Weighs
Asia-Pacific shares closed mixed Wednesday as investors gauged the impact of escalating trade tensions. Vishnu Varathan, head of Macro Research, Asia ex-Japan at Mizuho Securities said, “Asia generally is more vulnerable, given dependence on both US and China, casting a shadow on sustained AXJ [Asia-ex Japan] buoyancy through further tariff shifts. ASEAN in particular may feel a more acute squeeze between China and the US.”
Japan’s Nikkei 225 added 0.3% to close at 39,821. South Korea’s Kospi index increased by 0.6%. South Korea has staged an impressive comeback in 2025, posting a rally of over 30% year-to-date and making it the best performer in the region. At the bottom of the regional league table is Thailand where the stock market has slumped over 13% since the start of the year amid political turmoil, corruption scandals, economic woes and the drag of US auto tariffs on its crucial auto parts export sector. Australia’s S&P/ASX 200 benchmark ended the day 0.6% lower. Indian stocks fell by the close on Wednesday. The BSE Sensex was 0.2% lower at 83,536.
South Korean defence stocks rallied Wednesday following Donald Trump’s comments that the country should be paying for its own military protection. “South Korea is making a lot of money, and they’re very good. They’re very good, but, you know, they should be paying for their own military,” Trump reportedly told the media at a meeting of his Cabinet at the White House. “It’s very unfair. We supply the militaries to many very successful countries,” he added. Gains were led by SNT Dynamics (+9.5%) and LIG Nex1 (+8.6%). Strong moves were also seen in Poongsan (+4.6%), Firstec (+5.2%) and Hyundai Rotem (+6.1%).
Australian gold mining stocks saw substantial declines Wednesday over Donald Trump’s tariff plans. Losses among Australian miners were led by Evolution Mining, which plunged 7.0%. Declines were also seen in Kingsgate Consolidated (-5.2%), Bellevue Gold, (-5.2%), and Newmont Corporation (-5.4%).
An Indonesian stock surged 35% in its first day of trading in Jakarta on optimism it will follow the stellar gains made by other companies linked with billionaire Prajogo Pangestu. Shares of Chandra Daya Investasi, the infrastructure unit of petrochemical giant Chandra Asri Pacific, closed at 256 rupiah Wednesday, versus the price of 190 rupiah in its initial public offering.
China Stocks Fall As Producer Price Deflation Persists
Chinese stocks initially climbed to multi-month highs following the release of key inflation data before relinquishing gains. Consumer prices in China edged up 0.1% year-over-year in June, marking the first positive reading in five months and signalling tentative signs of stabilizing demand. However, producer prices plunged 3.6%, the steepest drop since July 2023, as intensified price competition continued to weigh on the industrial sector amid weak domestic consumption.
The mainland’s CSI 300 closed down 0.2% at 3,991, near the low of the day. The index was up 0.5% earlier in the session.
In Hong Kong, the Hang Seng Index closed 256 points lower, or 1.1%, at 23,892, the biggest fall in three weeks. At the high of the day, the city’s benchmark index was up 1.3%. The Hang Seng Tech Index tumbled 1.8%. Henderson Land Development slumped 8.6% after raising HK$8 billion (US$1bn) from a sale of convertible bonds.
Shares of Zijin Mining, China’s largest copper miner, dropped on Wednesday following Trump’s threat of 50% tariffs on the metal. The Hong Kong-listed shares of Zijin fell 3.4%, making it among the worst performers on the Hang Seng index on Wednesday.
European Defence Stocks Hit Record High
European markets rose to an almost one-month high on Wednesday. The pan-European Stoxx 600 closed with gains of 0.8%, with all major bourses in positive territory. The DAX extended its gains on Wednesday, climbing 1.4% and surpassing the 24,500 level to reach a fresh all-time high. London’s FTSE 100 was 0.2% higher.
The European Stoxx Aerospace and Defense index rose 1.4% to a new record high. So far this year, the index has surged more than 53%. Top performers in the sector on Wednesday include Germany’s Renk, which jumped 5.0% after Bloomberg reported the military vehicle parts maker was considering expanding to offer a civilian business. Poland’s Lubawa closed 1.7% higher, while Airbus was up 1.9%.
The Stoxx Europe 600 Banks index rose 2.0% to its highest level since 2008. Top gainers in the banking sector include UniCredit (+4.6%) Societe Generale (+4.0%), and Deutsche Bank (+3.4%).
Global markets have been seesawing this week, as traders digest the latest trade tariff news. No new tariffs targeting the European Union have been announced, with many seeing the lack of a letter from the Trump administration to the bloc as a sign that a trade agreement will be struck before the looming deadline of August 1. An EU diplomat told CNBC that any framework deal is likely to include a 10% baseline tariff and may see certain goods, such as aircraft and spirits, given exceptions. Brussels is aiming for a framework deal, after which talks would continue.
Most British companies would withstand sharply higher tariffs even if their earnings fell 10% and their borrowing costs surged, according to the Bank of England’s assessment of risks from US President Donald Trump’s trade war. “Despite some pockets of vulnerability, UK corporates would, in aggregate, be able to service their debts even in the face of further global shocks such as lower global demand and supply,” the bank said in its financial stability report published on Wednesday.
There were nine new listings on the London Stock Exchange in the first half of the year, according to professional services firm EY. In a new report released Wednesday, EY said those listings raised £182.8 million (US$248.5mn), marking a 64% year-on-year decline in deal value. The UK downturn was part of a wider trend seen across Europe, where IPO proceeds fell 60% year-on-year to US$5.9 billion. However, Europe was an outlier. The global IPO market raised US$62 billion from an estimated 540 deals in the first half, according to EY, which reflected a 17% jump in total proceeds from the same period a year earlier.
Nvidia Leads Big Tech Rally On Wall Street
US shares followed European stock markets higher as investors grew optimistic that US and EU negotiators were closing in on a trade deal. The EU said on Wednesday it was aiming to strike a deal with the US in the coming days. Some analysts said the muted reaction to Trump’s latest tariff announcements was justified. “The tariff letters have been well publicised, and the tariffs remain around the same levels announced in April,” said analysts from UBS in a note on Wednesday. “We believe the US effective tariff rate should end the year at around 15%. This would be a headwind to growth but not enough to trigger a recession,” the note added.
The S&P 500 climbed 0.6%, ending the session at 6,263. The Nasdaq Composite advanced 1.0% to a record close of 20,611. The Dow added 218 points, or 0.5%, ending at 44,458. Wall Street’s fear gauge fell, the Cboe Volatility Index, or VIX, fell below 16 for the first time since February.
Nvidia shares jumped 1.8% on Wednesday and the company briefly achieved a US$4 trillion market cap for the first time ever. The chipmaker is the first company to achieve this milestone and has benefitted from the generative AI boom. The California-based company, which was founded in 1993, first passed the US$2 trillion mark in February 2024, and surpassed US$3 trillion in June. It ended Wednesday’s session with a market cap of US$3.972 trillion. Nvidia now accounts for 7.5% of the S&P 500 Index. Other major tech names also rose, including Meta Platforms (+1.7%), Microsoft (+1.4%) and Alphabet (+1.3%), boosted by a rekindling in appetite for the artificial intelligence theme.
Starbucks rose 0.3%. The coffee-chain operator has received proposals from prospective investors in its China business, most of whom are eyeing a controlling stake in the operation. The company may consider selling a larger holding based on valuation and other factors, although its preferred option was to sell a minority stake to a partner, Bloomberg reported. Starbucks said it sees "significant long-term potential in China" and wants to "retain a meaningful stake in the business", according to a statement.
Boeing delivered 60 aircraft in June, its best showing in eighteen months, thanks in part to the resumption of US jet exports to China. The June surge put Boeing back in the race with arch-rival Airbus, which handed over 63 aircraft in the month. Shares of Boeing rose 3.7%.
Shares of WK Kellogg soared 50% in after-hours trading on Wednesday following a report that chocolate maker Ferrero is close to a roughly US$3 billion deal to buy the cereal company. The Italian company known for its circular hazelnut chocolates could finalize an acquisition of the legacy breakfast foods business as soon as this week, The Wall Street Journal reported, citing people familiar with the matter.
Treasury Yields Fall After Bond Auctions
Bond yields declined after a Treasury auction of US$39 billion in 10-year notes in the afternoon garnered strong demand. The 10-year yield finished the day 7 bps lower at 4.34%. Until Wednesday’s session, the 10-year yield had risen almost 20 bps over the past week. Yields have been rising as investors pare bets on Fed interest-rate cuts by year-end following a report last week that showed a surprisingly resilient US labour market.
There will be a Treasury auction of US$22 billion of 30-year bonds tomorrow, which will test investor sentiment. The supply of new securities is a particular focus, given that Trump’s tax-and-spending bill is projected to widen the deficit, meaning more borrowing. “A poorly received auction will only serve to re-ignite concerns over the unsustainable path of US borrowing,” said Michael Brown, senior research strategist at Pepperstone Group.
US Dollar Higher
The US dollar index edged above 97.5 on Wednesday, extending recent gains as investors weighed the latest tariff actions announced by Donald Trump. The index of the dollar’s value against a basket of six major currencies rose 0.1% to 97.57.
The offshore yuan fell 0.1% to around Rmb 7.18 per dollar on Wednesday, as investors reacted to the latest inflation data from China. The persistent decline in producer prices highlights mounting economic pressures as China struggles with weak domestic demand and uncertainty stemming from escalating global trade tensions.
The Japanese yen slipped past ¥147 per dollar at one stage Wednesday as trade negotiations between the US and Japan showed signs of strain, particularly over Japan’s rice market protections. It recovered in New York trading to close 0.1% firmer at ¥146.47.
Gold Rebounds
Gold rose 0.3% to $3,313 per ounce on Wednesday, recovering from a more than 1% loss in the previous session.
Oil Rises To 2-Week High
Brent crude oil futures rose above $70 per barrel on Wednesday, reaching a more than two-week high, supported by emerging risks of supply disruptions and a downward revision in US production forecasts. Brent crude oil settled at $70.12 a barrel.
Bitcoin Hits Record High
Bitcoin rose to a new record, hitting a high of $112,052. It closed the day 2.0% higher at $110,900.
Peter Lewis’ Money Talk Podcast
On Thursday’s “Peter Lewis’ Money Talk” podcast, I’ll be joined by Andrew Freris, the CEO of Ecognosis Advisory, and Hong Kong based macro strategist, Patrick Bennett. With a view from Taiwan is Ross Feingold, Director of Research, Caerus Consulting, Taiwan.
The podcast is also available on Apple Podcasts, YouTube Studio and Spotify.
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https://www.youtube.com/playlist?list=PLnwqOJD9ie5gHH29bNfuG1Nscy8rdJo6O
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