PETER’S BUSINESS & FINANCE BRIEFING – Thursday 6 February 2025, 06:00 Hong Kong
● US Postal Service resumes accepting China & HK parcels ● Honda & Nissan’s $58bn merger close to collapse ● Gold surges to another record high
Thursday’s Opening Call
Hang Seng (Hong Kong) Projected Open: 20,649 +52 points +0.3%
Nikkei 225 (Japan) Projected Open: 38,940 +109 points +0.3%
Quick Summary - 4 Things To Know Before Asian Markets Open
The US Postal Service (USPS) said Wednesday it will resume accepting inbound mail and packages from China and Hong Kong, just hours after it suspended service from those regions. “The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery,” the agency wrote in a notice posted to its website. The USPS said late Tuesday it was halting all inbound packages from China and Hong Kong “until further notice” in a move that highlighted the risks of an escalating trade war and potentially delaying or blocking shipments from retailers like Shein and PDD’s Temu.
China’s services activity growth slowed in January, as employment contracted further, according to a private sector survey on Wednesday. China’s Caixin/S&P Global seasonally adjusted Services PMI came in at 51.0 in January, compared with December’s 52.2 reading, which was a seven-month high.
A proposed US$58bn merger to create the world’s fourth-largest carmaker appears on the verge of collapse. Japanese media reported Wednesday that Honda and Nissan have failed to reach a consensus on a deal in which Honda would offer Nissan a lifeline and bring the two brands under a single holding company slated to list shares in August 2026. They were hoping that by combining, they could gain economies of scale and fight off the growing competitive threat of Chinese newcomers led by BYD. However, Honda demanded that Nissan implement a restructuring plan, while Nissan struggled to find ways to cut staff at various factories.
China’s antitrust watchdog is laying the groundwork for a potential probe into Apple’s policies and the fees it charges app developers, part of a broader push by Beijing that risks becoming another flashpoint in the country’s trade war with the US. The regulator is examining policies that include a cut of as much as 30% on in-app spending and barring external payment services and stores, Bloomberg News reported Wednesday. The State Administration for Market Regulation is examining Apple’s policies, according to the report.
Extra US Tariffs On Chinese Imports Also Cover Hong Kong
The additional 10% tariffs imposed on Chinese imports by US President Donald Trump which came into effect on Tuesday (4 February) also apply to Hong Kong, officials said on Wednesday. The confirmation came in a notice from US Customs and Border Protection. The Hong Kong Trade Development Council (HKTDC) on Wednesday said the vast majority of goods from the SAR are now subject to the extra 10% tariffs, on top of regular and other potential extra duties. It noted that the US imported US$4.1 billion worth of goods from Hong Kong in 2023, with the duties paid totalling US$58 million. "With the additional 10% duty in place, Hong Kong products would have faced US$411.6 million in additional duty liability in 2023, while mainland Chinese products would have faced US$42,081 million in additional duty liability," the HKTDC said.
US Postal Service Resumes Inbound Parcels From China & Hong Kong
The US Postal Service (USPS) said Wednesday it will resume accepting inbound mail and packages from China and Hong Kong, just hours after it suspended service from those regions. “The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery,” the agency wrote in a notice posted to its website.
The USPS said late Tuesday it was halting all inbound packages from China and Hong Kong “until further notice” in a move that highlighted the risks of an escalating trade war and potentially delaying or blocking shipments from retailers like Shein and PDD’s Temu. USPS said letters and flat mail from China and Hong Kong would not be affected, according to a statement on its website.
While it’s not clear what prompted the USPS move, it comes after President Donald Trump revoked a “de minimis” rule for China, which previously allowed small packages under US$800 to enter the US duty-free. This exemption, often used by Chinese-linked e-commerce companies, was removed as part of a new 10% tariff on goods from China and Hong Kong, which took effect just after midnight Tuesday Washington time. Beijing denounced the move, calling it "unreasonable suppression".
Any change would particularly impact China’s e-commerce retailers including Alibaba, JD.com, PDD Holdings’ Temu and fashion-focused Shein, who ship often cheaper wares directly to consumers in the US. American shoppers and companies imported about US$48 billion worth of shipments from the world under that loophole in the first nine months of last year, according to US Customs and Border Protection estimates. Temu in particular exploded in the US by offering steep discounts on a variety of products for people willing to wait a week or so for delivery. By sending individual orders direct to customers from China, they avoid tariffs through the de minimis exemption while large retail chains that buy inventory wholesale imported on ships generally pass the tariff costs along to customers. New research estimates it could cost consumers more than US$10 billion if the loophole is eliminated entirely.
Panama Considers Cancelling CK Hutchison Port Deal
Panama is considering cancelling its port deal with a Hong Kong-based firm, a potential concession to defuse Donald Trump’s threats about countering China’s influence around the Panama Canal, according to Bloomberg News. By cancelling the contracts held by Hutchison Ports PPC, a subsidiary of CK Hutchison Holdings, President Jose Raul Mulino’s government would be granting a major gift to Trump, who says he believes China has too much control over the canal.
Trump Proposes USA Takes Over Gaza
Donald Trump proposed the US take over Gaza, relocate Palestinians to other countries and create a new “Riviera.” Israeli Prime Minister Benjamin Netanyahu, standing beside Trump, described that plan as “a different idea” from his own but one “worth paying attention to.” Speaking at the White House on Tuesday, Trump said “all” Palestinians in Gaza should “be resettled”. “The US will take over the Gaza Strip, and we will do a job with it, too. We’ll own it and be responsible for dismantling all of the dangerous unexploded bombs and other weapons on the site,” he said. He imagined Gaza could be “the Riviera of the Middle East” and said it was time to “clean out” the enclave. Trump has previously indicated he wants the 2.2mn population resettled in countries such as Egypt and Jordan. Asked whether he would send troops to Gaza, Trump said, “we’ll do what is necessary”.
His comments sparked scepticism within the US and were rejected by Saudi Arabia, a key ally of Washington. Egypt and Jordan have already rejected Trump’s plans to resettle Palestinians outside Gaza. Jordan’s King Abdullah II will visit Trump in the US next week.
Fed’s Goolsbee Warns It Would Be ‘Mistake’ To Ignore Trump’s Tariffs
Austan Goolsbee, president of the Chicago Fed, on Wednesday said central banks’ tendency to follow “pure economic theory” and ignore supply shocks such as tariffs was “dangerous”. The US faced a “series” of challenges to the supply chain, Goolsbee said, including strikes and natural disasters. The economy also faced “the threat of large tariffs and the potential for an escalating trade war”, he added. “These threats are not of the scale of what occurred during the pandemic but passing over their potential consequences would be a mistake,” he said. The comments from a member of the central bank’s rate-setting panel, come just days after the president threatened to impose 25% tariffs on two of the US’s biggest trade partners, Mexico and Canada and a day after 10% tariffs on imports from China took effect, prompting Beijing to announce tariffs of its own on some US imports.
Goolsbee’s remarks contrast with Fed chair Jay Powell, who last week said rate-setters would need to “wait and see” the impact of tariffs before deciding how they would affect their interest rate decisions. Following the decision to hold interest rates in a range from 4.25% to 4.5%, Powell said, “we don’t know what’s going to be tariffed, we don’t know for how long or how much, what countries, we don’t know about retaliation, we don’t know how it’s going to transmit through the economy to consumers. That really does remain to be seen.”
Chinese Consumers Record Travel & Movie Attendance Over Holidays
Chinese consumers shattered records for travel and movie attendance during the Lunar New Year holidays. But that has yet to translate into a turnaround for the consumer economy. Box office receipts soared to US$1.3 billion, up 18% from the previous year, dominated by sequels to local fan favourite franchises. In another positive sign, people made about 7% more journeys by rail since holiday travel began, compared with a year ago. But given the broader macroeconomic and geopolitical uncertainties, economists were cautious on the outlook. “We remain cautious on if the holiday spirit can translate into more sustainable consumption growth momentum without further stimulus,” HSBC economists said in a report.
China Services Activity Slows In January
China’s services activity growth slowed to a four-month low in January, as employment contracted further, according to a private sector survey on Wednesday. China’s Caixin/S&P Global seasonally adjusted Services PMI came in at 51.0 in January, compared with December’s 52.2 reading, which was a seven-month high. A PMI reading above 50 suggests expansion while below that points to a contraction in activity. New business growth eased to a four-month low, employment fell the most since April 2024, and selling price inflation slowed.
The findings broadly align with China’s official PMI released last week, which indicated non-manufacturing activity grew but at a slower pace than the previous month. Employment in the services sector shrank for a second consecutive month, as companies continued to cut costs, the report said. The Caixin general composite PMI, which combines both the manufacturing and services sectors, fell to 51.1 in January from 51.4 in December.
Japan Wage Growth Fastest Since 1997
Nominal wages in Japan rose 4.8% year-on-year in December, up from 3.9% in November, driven by a significant increase in winter bonuses. This exceeded economists’ expectations of a 3.8% growth and marked the highest wage growth in nearly three decades. Inflation-adjusted real wages, which reflect consumer purchasing power, also increased by 0.6% in December, marking the second consecutive month of positive growth. The surge was largely attributed to a 6.8% rise in special payments, primarily from companies' winter bonuses. The Bank of Japan has emphasized the need for broad-based wage hikes to support higher borrowing costs. However, a labour ministry official noted, "although monthly wages and base salaries are rising compared to the past, they are not keeping pace with prices."
Japan Services PMI Revised Upward
The au Jibun Bank Japan Services PMI was revised higher to 53.0 in January, up from the preliminary reading of 52.7, after a final reading of 50.9 in the prior month. The latest reading marked the third consecutive month of expansion in the service sector and the strongest pace since September. New orders increased solidly, with growth strengthening for the second straight month, and the rate of growth was the most pronounced in six months. Additionally, overseas sales grew for the first time in four months, at the strongest rate since last August. Moreover, employment continued to increase, extending the current streak of job creation to 16 months. On the price front, average input costs rose at the steepest pace since last August, due to higher wages, fuel, and material prices. As a result, output price inflation accelerated to an eight-month high.
The au Jibun Bank Japan Composite PMI stood at 51.1 in January, in line with flash data and up from December's reading of 50.5. This marked the third consecutive month of growth in private sector activity and the fastest pace since September.
South Korea Inflation Hits 6-Month High In January
The country’s consumer price index for January rose 0.7% month-on-month and 2.2% annually, surpassing Reuters’ 2.0% estimate and the highest annual rate in six months, driven by a weaker currency that increased import costs. Inflation was led by a year-on-year rise in the indices for furnishings, household equipment, routine maintenance, food and non-alcoholic beverages and clothing and water, data released by Statistics Korea Wednesday showed. The data supported the Bank of Korea’s recent decision to keep interest rates at 3%, despite expectations for a 25 bps cut.
Hong Kong Private Sector Grows For Fourth Month
The S&P Global Hong Kong PMI stood at 51.0 in January, barely changing from 51.1 in December. It was the fourth straight month of expansion, as new orders rose marginally, growing much softer than the 18-month peak last October. Meanwhile, export sales fell for the third month as new demand from the mainland shrank the most since April 2022. On the cost side, input price inflation hit a 3-month high on a solid rise in raw material prices. Efforts to stimulate demand led to another slight fall in prices charged. Sentiment remained downbeat despite the reading edging up from a 13-month low in November.
Singapore Private Sector Contracts For First Time In 2 Years
The S&P Global Singapore PMI fell to 49.9 in January, down from 51.5 in December, marking the first private sector contraction in nearly two years. Output and new orders both declined for the first time in over two years. Employment declined for the second month, with part-time workers most affected. On prices, input costs rose sharply, though inflation eased to a four-month low due to higher shipping, transport, and labour costs. Selling prices also increased but at a slower pace. Looking ahead, business confidence fell to a two-year low.
Singapore Retail Sales Fall At Faster Pace
Retail sales in Singapore dropped by 2.9% year-on-year in December, slipping further from a downwardly revised 0.5% fall in the previous month. This marked the second consecutive month of falling retail trade. On a seasonally adjusted monthly basis, retail sales decreased 1.5% in December, slowing from a 2.8% fall in the previous month.
Philippines Inflation Rate Steady In January
The annual inflation rate in the Philippines stood at 2.9% in January, unchanged from the previous month and surpassing economists’ expectations of 2.7%. This marked the highest reading since August, driven by price increases in food and non-alcoholic beverages (3.6% vs 3.1% in December) and alcoholic beverages and tobacco (3.6% vs 3.2%). Core inflation, which excludes selected food and energy items, eased to 2.6% from 2.8% in the preceding month. On a monthly basis, consumer prices rose by 0.5% in January, following a 0.6% gain in the prior period.
Indonesia’s Economy Grows Faster Than Expected In 2024
Indonesia’s economy expanded by 5.03% in 2024, beating Reuters’ poll estimate of 4.98%. The growth slowed marginally from the 5.05% seen in the previous year, missing the official target of 5.2% and marking the lowest reading in three years. The Southeast Asian country’s economy grew 5.02% year-on-year in the fourth quarter, boosted by exports of goods and services, according to data released Wednesday from Statistics Indonesia. For 2025, the GDP growth target remains at 5.2%. However, the central bank recently cut its growth forecast for this year to 4.7%-5.5% from 4.8%-5.6%, citing US tariff disruptions.
India Services PMI Revised Downward
The HSBC India Services PMI was revised lower to 56.5 in January, down from 56.8 in the preliminary estimates and declining from the highest reading in four months in December of 59.3. Still, the latest figure marked the 42nd consecutive month of growth in services activity and the softest pace since November 2022. New business rose the least since November 2023. New orders grew, with foreign sales rising faster, mainly from Asia, Europe, the Middle East, and the Americas.
The HSBC India Composite PMI stood at 57.7 in January, below the flash reading of 57.9 and December's figure of 59.2. This was the lowest print in 14 months despite marking the 42nd consecutive month of expansion in private sector activity.
Race To Beat Trump Tariffs Sends US Imports Soaring
US imports hit their highest on record in December as businesses responded to the threat of tariffs made by President Donald Trump by racing to secure foreign-made toys, mobile phones and computers. The value of goods brought into the US jumped 4% from November to US$293.1bn, the highest since records began in 1992, the Commerce Department said on Wednesday. The rise also contributed to the widest trade deficit in nearly two years. The US trade deficit widened to US$98.4 billion in December, following a revised US$78.9 billion gap in November and above forecasts of a US$96.6 billion shortfall. It is the highest trade deficit since a record in March 2022.
For the whole of 2024, the deficit increased 17% from 2023 to US$918.4 billion. The largest trade gaps were recorded with China (-US295.4bn), the EU (-US$235.6bn), Mexico (-US$171.8bn) and Vietnam (-US$123.5bn). The trade gap with Canada was -US$63.34 billion. For 2024, exports were US$3,191.6 billion, up US$119.8 billion from 2023, while imports increased US$253.3 billion or 6.6% to US$4,110 billion.
US Private Employment Tops Forecasts
Private businesses in the US added 183,000 workers to their payrolls in January, higher than an upwardly revised 176,000 in December and above forecasts of 150,000. Hiring momentum from Q4 carried into January with some exceptions, including manufacturing. "We had a strong start to 2025 but it masked a dichotomy in the labour market. Consumer-facing industries drove hiring, while job growth was weaker in business services and production", Nela Richardson, Chief Economist, ADP, said. The service-producing sector added 190,000 jobs, while the goods-producing sector lost 6,000 jobs, largely due to manufacturing (-13,000). Meanwhile, annual pay growth for job-stayers was 4.7% and pay growth for job-changers was 6.8%.
US Services Growth Unexpectedly Slows
The ISM Services PMI for the US declined to 52.8 in January from a downwardly revised 54 in December, and well below forecasts of 54.3. The reading pointed to a slower expansion in the services sector, due to smaller increases in business activity (54.5 vs 58) and new orders (51.3 vs 54.4). Employment (52.3 vs 51.3) and new export orders (52 vs 50.1) increased faster and price pressures eased (60.4 vs 64.4). "Poor weather conditions were highlighted by many respondents as impacting business levels and production. Like last month, many panellists also mentioned preparations or concerns related to potential US government tariff actions; however, there was little mention of current business impacts as a result”, Steve Miller, Chair of the ISM Services Business Survey Committee said.
China Weighs Probe Into Apple
China’s antitrust watchdog is laying the groundwork for a potential probe into Apple’s policies and the fees it charges app developers, part of a broader push by Beijing that risks becoming another flashpoint in the country’s trade war with the US. The regulator is examining policies that include a cut of as much as 30% on in-app spending and barring external payment services and stores, Bloomberg News reported Wednesday. The State Administration for Market Regulation is examining Apple’s policies, according to the report. Agency officials have spoken with Apple executives and app developers since last year, said the report.
The conversations stem from long-running disputes between Apple and developers such as Tencent and ByteDance over iOS store policies, a source of tension between the US company and regulators worldwide. While Beijing has since 2024 targeted the practices of US tech firms from Nvidia to Alphabet's Google, regulators may not formally move against Apple if the current conversations go well.
Though the examination of Apple’s practices began before US President Donald Trump took office, they’re now colliding with a series of tit-for-tat moves between Beijing and the Trump administration, which is threatening to ignite a global trade war. On Tuesday, the watchdog announced a formal probe into Google and allegations of anti-competitive behaviour just moments after new US tariffs on China came into effect.
Honda & Nissan’s $58bn Merger Close To Collapse
A proposed US$58bn merger to create the world’s fourth-largest carmaker appears on the verge of collapse. Japanese media reported Wednesday that Honda and Nissan have failed to reach a consensus on a deal in which Honda would offer Nissan a lifeline and bring the two brands under a single holding company slated to list shares in August 2026. They were hoping that by combining, they could gain economies of scale and fight off the growing competitive threat of Chinese newcomers led by BYD. However, Honda demanded that Nissan implement a restructuring plan, while Nissan struggled to find ways to cut staff at various factories.
According to the Financial Times, Honda made an unexpected proposal to turn Nissan into a fully owned subsidiary. The latest proposal, delivered to Nissan at the weekend, deviates from initial plans to bring the two companies under a jointly owned holding company, a structure that would have provided room to retain Nissan’s brand and decision-making powers. Nissan executives were taken aback by the new proposal, delivered as a “take it or leave it” offer, but the company has not finalised its response, the FT reported. One person close to Nissan said they thought Honda’s sudden “aggressive” change of posture suggested it was looking for a way out of merger talks.
Toyota Raises Profit Forecast & Aims To Double Down On China
The world’s largest automaker, Toyota, upgraded its full-year profit forecast on Wednesday and unveiled plans to invest in a new battery and EV plant in Shanghai that will start producing Lexus models in 2027. The new plant will be fully owned by Toyota, following in the footsteps of Tesla’s Shanghai gigafactory and VW’s electric vehicle plant in Hefei. It will be able to produce 100,000 units a year initially, but no financial details were disclosed. Toyota itself already has two joint ventures with FAW and GAC, selling almost 1.8mn vehicles in China in 2024, although that was down 6.9% on the previous year. The new Shanghai factory could help Toyota to catch up on electric car technology after being perceived by many to have been slow to invest in the new propulsion technology given its focus on hybrid cars.
The automaker raised its full-year profit forecast to ¥4.7tn (US$31bn), up by ¥400bn, despite recording a second consecutive quarterly drop in profit, as sales growth driven by a hybrid boom cooled off. Operating profit was down 27% to ¥1.2tn for the three months ending in December, its fiscal third quarter, which was short of analysts’ forecasts. The full-year upgrade was made due to efforts to improve product competitiveness, lower discounts on its cars and reductions in supply chain costs.
Toyota has pledged US$10bn in investment in US manufacturing in 2017 following criticism from Trump for investing in a new Mexican factory. It said on Wednesday it was ready to ship initial products from its battery plant in North Carolina, its first outside Japan and costing almost US$14bn to build.
China Keeps Renminbi Steady In First Fix Since Trump’s Tariffs
China has kept the renminbi’s exchange rate with the dollar steady in its first official currency fix since US President Donald Trump hit the country with tariffs. The People’s Bank of China on Wednesday set the rate at Rmb 7.169 a dollar, close to the level before a more than weeklong lunar new year holiday. During the market closure, Trump announced an extra 10% tariff on Chinese exports, and Beijing retaliated with duties on US energy exports and other goods due to come into effect next week.
This fix is seen by analysts as an important policy reaction to those tariffs. The People’s Bank of China sets a reference rate each trading day at 9:15 a.m. Beijing time, around which the yuan is allowed to move 2% in either direction. A reference rate that’s significantly stronger or weaker than the market’s expectations is typically considered a signal from Beijing. The reference rate was last fixed at Rmb 7.1698 on 27 January just before the start of the Lunar New Year holidays.
During the last trade war under Trump’s first term, Beijing allowed the renminbi to depreciate to cushion the blow of US tariffs on its exports. Global banks had anticipated the PBoC would weaken the renminbi in response to Trump’s latest round of tariffs and a stronger dollar. The onshore renminbi is trading at Rmb 7.272 a dollar, close to the top of the 2% band. It has depreciated almost 3 per cent since the eve of Trump’s election victory in November.
Wednesday’s fix can be interpreted as a signal that China is prepared to defend the renminbi’s value against the dollar. “This is a signal to the market that they will hold the renminbi, for now,” said Ju Wang, head of foreign exchange and rates for greater China at BNP Paribas. “For now, China doesn’t want a currency war,” wrote former US treasury official and economist Brad Setser on X. Analysts at Goldman Sachs forecast the renminbi would fall to 7.50 to the dollar in the event of a 20% rise in the effective US tariff regime.
Chinese Stocks Weaken On First Trading Day Of New Lunar Year
Mainland Chinese markets opened in positive territory in their first trading session since the lunar new year break but gave up gains to close lower. The sentiment around Chinese assets has improved since Chinese AI company DeepSeek took Silicon Valley by surprise with its progress in large language models. But the threat of tariffs weighed on the equity markets. The CSI 300 index of mainland-listed companies closed down 0.6%, at 3,795. Hong Kong’s Hang Seng declined 193 points, or 0.9%, to 20,597, led by Chinese companies listed in the territory. The Hang Seng China Enterprises Index fell 1.0%. The Tech Index closed 1.0% lower. Shares sank soon after the US Postal Service said it’s halting all inbound packages from China and Hong Kong. Shares of Alibaba fell as much as 2.4% at one stage in Hong Kong and JD.com tumbled more than 5% before paring losses.
In a note published on Tuesday, analysts at Goldman Sachs forecast that the MSCI China index would rise 14% in 2025. “This is a high-volatility market and a labour-intensive job for currency traders this year,” said Wang, who warned that the threat of further tariffs would “continue to weigh on the currency and equity markets”.
The troupe of dancing, AI-trained robots from a closely held company called Unitree that featured prominently in the Spring Festival Gala, perhaps one of the most-watched shows in China, reignited excitement in anything connected to robotics. Zhejiang Changsheng, which provides components for Unitree, jumped as much as 10%. AI product partner Shengtong Printing also gained 10%, while Wolong Electric, which indirectly holds shares in Unitree, rallied 10% in Shanghai.
Asian Stocks Higher
Other Asia-Pacific markets mostly rose Wednesday after Wall Street rose overnight, shrugging off Trump tariffs and China’s retaliatory measures.
Japan’s benchmark Nikkei 225 rose 0.1% to close at 38,831. Local media reported Wednesday that Nissan plans to reject Honda’s terms for a US$58bn combination of the two automakers, endangering a plan announced less than two months ago. Shares in Nissan fell 4.9% in Tokyo, while Honda stock rallied 8.2%, reflecting investors' views that Nissan was more likely to benefit from a merger.
South Korea’s Kospi rose 1.1%. KakaoPay, the mobile payment and digital wallet arm of South Korean platform Kakao Corp, surged 9.2% Wednesday, following a 5.8% gain Tuesday. The company on Monday reported a 25% year-on-year increase in its revenue to 766.2 billion won, led by its digital finance and digital payment segments.
In Australia, the S&P/ASX 200 rose 0.5% led by outperformance in the resources, tech and mining sectors. The Australian Services and Composite PMI figures were revised higher from the preliminary release.
Indian stocks were lower as the Reserve Bank of India starts its first monetary policy meeting under the new central bank governor, with investors expecting a 25 bps rate cut when the meeting concludes on Friday. The BSE Sensex index slipped 0.4% to 78,271.
European Stocks Higher
European markets traded higher on Wednesday, driven by corporate earnings coming out of the region. The pan-European Stoxx 600 closed 0.5% firmer. London’s FTSE 100 was up 0.6%.
Danish pharmaceutical behemoth Novo Nordisk on Wednesday reported better-than-expected net profit in the fourth quarter, amid soaring demand for its Wegovy obesity drugs. The drug maker posted a 107% year-on-year increase in Wegovy sales to 19.87 billion Danish kroner (US$2.8bn) in the three months to the end of December, slightly missing estimates. Its shares rose 4.5% in Copenhagen.
Shares of Spanish bank Santander jumped 8.3% after the lender reported record quarterly profit and announced a 10 billion euro buyback. Its full-year profit reached 12.6 billion euros (US$13.1bn) in 2024. It marked the third consecutive year of record financial results.
Pharma giant GSK closed 7.6% higher after raising its long-term sales guidance and posting higher full-year core operating profit.
US Shares Edge Higher
On Wall Street Wednesday, the three major US indices logged modest gains, despite the escalating US-China trade war. The Dow rose 317 points, or 0.7%, to 44,873. The Dow was led by gains in Nvidia, which jumped 4.3% after the server maker Super Micro Computer announced full production availability of its AI data centre with Nvidia’s Blackwell platform. Super Micro shares also rose 8.0% following the announcement. The S&P 500 index climbed 0.4%, to 6,061, putting its week-to-date gains into positive territory at 0.3%. Meanwhile, the Nasdaq Composite rose by 0.2%. The Nasdaq was held back by disappointing earnings reports from Google parent Alphabet and chip maker Advanced Micro Devices.
Alphabet stock dropped 7.8%, after the company's results highlighted a slowdown in Google's cloud-computing sales. Advanced Micro Devices shares fell 6.3% after the chipmaker reported data centre revenue that was weaker than expected, indicating that it’s struggling to catch up with AI computing leader Nvidia. Apple shares fell 0.6% following reports that China is considering an anti-monopoly probe into App Store practices.
PDD, the Chinese company behind the low-cost online shopping platform Temu, saw its Nasdaq-listed shares drop 3.2% Wednesday. President Trump has moved to close a loophole that lets companies avoid tariffs on packages sent directly to US consumers and worth less than US$800. So-called de minimis shipments have become wildly popular in recent years, fuelled partly by the growth of Chinese ecommerce company Temu and Shein, its China-founded, Singapore-based rival.
US 10-Year Yield Falls To 7-Week Low
The yield on the 10-year US Treasury note fell 9bps to below the 4.5% mark on Wednesday, hitting 4.42%, the lowest in seven weeks, supported by demand for safe assets and bets of multiple rate cuts by the Fed this year, despite fresh evidence of a strong labour market. The 2-year yield dropped 3 bps to 4.19%. New data showed that the US added over 180,000 private sector jobs in January, above expectations of 150,000. The Treasury said it wasn't planning to step up debt issuance anytime soon.
Dollar Lower For Third Session
The US Dollar Index was lower for a third consecutive session as markets continue to price in a more constructive trade environment after Trump's concessions to Mexico and Canada earlier in the week. The index fell 0.3% against a basket of currencies to 107.61. The easing of North American trade tensions has helped the euro gain a footing above the $1.04 mark, compared to the $1.0209 trough seen at the start of the week. Sterling was 0.1% firmer at $1.2496 ahead of today’s Bank of England rate decision. The UK central bank is widely expected to deliver a 25 bps rate cut. The yen was 1.0% firmer at ¥152.68 after data showed the fastest pace of wage growth in Japan since 1997.
Gold Hits New Record High
Gold rose 0.7% to a record high, after advancing by almost 1% in the previous session, as the start of a new US-China trade war stoked haven demand. Bullion settled at an all-time peak of $2,862 an ounce on Thursday. Gold prices have climbed more than 9% this year on fears of a global trade war, setting multiple record highs.
A gold rush into the US, where inventories on the New York Comex have risen 88% since November’s election, has drained the market in London and Hong Kong, as traders try to get ahead of potential tariffs threatened by President Donald Trump. Users report bottlenecks of several weeks to withdraw gold from the vaults at the Bank of England. The rate to lend gold for a week has risen to about 10% on an annualised basis this year, compared with 2-3% previously, according to the World Gold Council. “There is more gold in the US than there should be under normal circumstances, and there is less gold in London than there should be,” said John Reade, chief market strategist at the WGC. “That is causing disruption to the gold market and has increased the cost of borrowing gold.” Borrowers of gold are typically other commercial banks and consumers such as refineries, jewellers or industrial manufacturers, who require the precious metal but find it cheaper to temporarily borrow it rather than buy and store it.
Oil Lower As Stockpiles Rise More Than Expected
The crude complex was lower despite the weak dollar but after the US and Chinese presidents failed to conduct a call yesterday to discuss tariffs. In addition, crude stockpiles grew more than anticipated and by the most in almost a year. Brent crude oil settled 1.8% lower at $74. a69 barrel.
Bitcoin Falls Below $97,000
Bitcoin has fallen every day this week from $102,000 to below $97,000. Over the past 24 hours, it has lost 1.3% to $96,970.
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 Andrew Sullivan, founder of Asian Market Sense. With a view from Taiwan is Ross Feingold, Director of Research, Caerus Consulting, Taipei.
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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This podcast is sponsored by Surfin Group, which is headquartered in Singapore and offers online financial services to 60 million customers across 10 countries. You can find out more about them by going to their website www.surfin.sg
