PETER’S BUSINESS & FINANCE BRIEFING – Wednesday 28 May 2025, 06:00 Hong Kong

● Chinese EV shares continue to tumble after ‘rat race’ price cuts ● China’s industrial profit growth picks up ● China & EU to hold fresh trade talks amid global headwinds

BYD cut the price of its cheapest model, the Seagull hatchback, to as low as $7,770 © Aly Song/Reuters

Wednesday’s Opening Call

Hang Seng (Hong Kong) Projected Open: 23,347 -35 points -0.2%

Nikkei 225 (Japan) Projected Open: 38,300 +576 points +1.5%

Quick Summary - 4 Things To Know Before Asian Markets Open

1. China’s industrial firms saw their profits increase at a faster pace in April, as a government trade-in program drove demand for manufactured products in the face of pressure from higher US tariffs. Profits at China’s industrial firms rose by 1.4% y/y to 2,117 billion yuan (US$294bn) in the first four months of 2025, picking up from 0.8% growth in the January–March period. Industrial profits climbed 3% last month from a year earlier, stronger than a 2.6% gain in March.
   
   

2. Chinese Commerce Minister Wang Wentao and EU Trade Commissioner Maros Sefcovic are set to hold another round of talks in early June on the sidelines of a WTO meeting in Paris, according to the Global Times. “The two sides will conduct in-depth exchanges on the important topic of China-EU economic and trade cooperation,” a source said, adding the talks will help prepare for future high-level exchanges. This meeting marks the third between the two in 2025, reflecting a notable increase in China-EU engagement amid the global trade uncertainty.
   
   

3. US consumer confidence data released Tuesday for May came in stronger than economists predicted. The Conference Board’s measure came in at 98, an increase of more than 12 points from the prior month. That’s higher than the estimate of 86 from economists polled by Dow Jones. May’s rebound followed five straight months of declines. Much of the positive sentiment, according to board officials, came from developments in the US-China trade impasse, most notably President Donald Trump’s halting of the most severe tariffs on May 12. “The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards,” said Stephanie Guichard, the Conference Board’s senior economist for global indicators.
   
   

4. Shares in BYD and other Chinese carmakers continued to tumble on Tuesday after the Chinese electric-vehicle giant’s latest price cuts. The company announced on May 23 on the Chinese social media platform Weibo that it was reducing the prices on 22 electric and plug-in hybrid models by as much as 35% until the end of June. It brings the price tag of its cheapest model, the pure battery-powered Seagull hatchback, to as low as US$7,770. Citi analysts said, “BYD is able to register Rmb 9,000 (US$1,252) net profit per vehicle in the second quarter.” China’s development commission, the top national economic planning agency, warned against a “rat race” last week following two years of a bruising price war between companies in the world’s largest automarket.
   
   

Chinese EV Shares Continue To Tumble After ‘Rat Race’ Price Cuts

Shares in BYD and other Chinese carmakers continued to tumble on Tuesday after the Chinese electric-vehicle giant’s latest price cuts. The company announced on May 23 on the Chinese social media platform Weibo that it was reducing the prices on 22 electric and plug-in hybrid models by as much as 35% until the end of June. It brings the price tag of its cheapest model, the pure battery-powered Seagull hatchback, to as low as US$7,770. Following BYD’s move, state-owned Changan and Stellantis-backed Leapmotor unveiled price cuts of their own.

The “fixed price” campaign, with cuts effective until the end of June, is expected to help BYD’s second-quarter shipments grow 20 to 30% from the previous quarter, Citi analysts said. “BYD is able to register Rmb 9,000 (US$1,252) net profit per vehicle in the second quarter,” they said in a research note. The estimate is below the full-year net income per unit guidance of Rmb10,000 that BYD management gave to analysts last month.

Shares in BYD, which tumbled 8.6% Monday, fell another 1.7% Tuesday. BYD’s stock had hit a record high last week on news that it had outsold Tesla in Europe for the first time. Shares of other Chinese automakers also declined Monday and Tuesday on worries that intense competition would lead to a price war. Geely Automobile closed 1.7% lower Tuesday, after tumbling 9.5% Monday. Great Wall Motor lost 0.7% Tuesday and 5.5% Monday. Li Auto fell 3.2% Monday, while Shares in Xpeng were down 4.4%. “BYD holds significant pricing power in the market, so each round of its price cuts is set to prompt other car brands to follow suit, which will further intensify market competition,” said Li Yanwei, a member of the China Automobile Dealers Association.

China’s development commission, the top national economic planning agency, warned against a “rat race” last week following two years of a bruising price war between companies in the world’s largest automarket. “Some companies have adopted an ultra-low pricing strategy, even selling below costs,” Li Chao, a spokesperson for the agency, said at a press briefing. “These practices exceed the boundaries and bottom lines of market competition, distort market mechanisms, and disrupt fair competition, which requires corrective action.”

China’s Industrial Profit Growth Picks Up

China’s industrial firms saw their profits increase at a faster pace in April, as a government trade-in program drove demand for manufactured products in the face of pressure from higher US tariffs. Profits at China’s industrial firms rose by 1.4% y/y to 2,117.02 billion yuan in the first four months of 2025, picking up from 0.8% growth in the January–March period. Industrial profits climbed 3% last month from a year earlier, stronger than a 2.6% gain in March, according to data released Tuesday by the National Bureau of Statistics (NBS). Economists had forecast industrial profits would drop 1.5% y/y in April.

Manufacturing continued to lead the profit gains among industrial firms. Earnings of manufacturers rose 8.6% in the first four months of the year, versus a 26.8% drop at miners and a 4.4% rise at utilities, NBS data showed.

Improving earnings are crucial to bolstering business confidence so that companies become more willing to invest and hire. Stronger corporate balance sheets could reduce the urgency of additional stimulus by Beijing to ensure meeting its annual growth target of around 5%. China’s industrial companies have been benefiting from the government’s programme to subsidize upgrades of equipment and consumer goods by businesses and households. Thanks to the programme, growth in investment in purchases of equipment and instruments jumped in the first four months of 2025 to the highest in more than four years, likely boosting demand for industrial products.

South Korea Consumer Confidence Reaches 7-Month High

South Korea’s Composite Consumer Sentiment Index surged to 101.8 in May, up from 93.8 in April, marking its highest level since October 2024 when it last reached the same reading. The sharp rebound was fuelled by easing political uncertainty and growing optimism over a potential tariff agreement with the US. The jump in sentiment comes ahead of South Korea’s presidential election next week, following the ousting of former President Yoon Suk Yeol. Yoon was impeached in December after briefly imposing martial law and was officially removed from office in April. All major components of the sentiment index posted strong gains, including perceptions of living standards, household income, consumer spending, and domestic economic conditions. The expected inflation rate for the year ahead eased to 2.6%, adding further support to consumer confidence.

US Consumer Confidence Beats Expectations In May

US consumer confidence data released Tuesday for May came in stronger than economists predicted. The Conference Board’s measure came in at 98, an increase of more than 12 points from the prior month. That’s higher than the estimate of 86 from economists polled by Dow Jones. May’s rebound followed five straight months of declines. Much of the positive sentiment, according to board officials, came from developments in the US-China trade impasse, most notably President Donald Trump’s halting of the most severe tariffs on May 12. “The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards,” said Stephanie Guichard, the Conference Board’s senior economist for global indicators.

Other board sentiment indicators also increased. The present situation index increased to 135.9, up 4.8 points, and the expectations index posted a major surge to 72.8, a 17.4-point gain. Investors also showed more optimism, with 44% now expecting stocks to be higher over the next 12 months, up 6.4 percentage points from April. Views on the labour market also improved, with 19.2% of respondents expecting more jobs to be available in the next six months, compared with 13.9% in April.

US Durable Goods Plunge In April

Orders for long-lasting goods such as airplanes, appliances and computers fell in April on a steep slide in transportation equipment. New orders for manufactured goods in the US plunged by 6.3% from the previous month to US$296.3 billion in April, the sharpest drop since January 2024, but slightly softer than market expectations of a 7.8% decline. The previous month saw a revised 7.6% m/m surge following the front-loading of orders at the start of the blanket 10% reciprocal tariffs. Orders sank for transportation equipment (-17.1%), mainly on non-defence aircraft and parts (-51.5%) as tariff concerns drove airlines to halt demand for Boeing aircraft, which only received eight orders. Excluding transportation, orders rose 0.2%, the Commerce Department reported Tuesday.

US House Prices Post First Monthly Decline In 2 Years

The S&P CoreLogic Case-Shiller 20-City Home Price Index rose 4.1% from the previous year in March, decelerating from a 4.5% percent increase in February and contrasting sharply with expectations of a 4.5% increase to log the softest rise since September of 2023. The slower increase took place despite other data reflecting lower mortgage rates and recent gauges of low housing supply, potentially reflecting lower purchasing power for homebuyers. On a monthly basis, US home prices fell 0.3% in March from February, the first monthly decline on a seasonally adjusted basis since January 2023.

Trump Hails 'Positive' Step In US-EU Trade Negotiations

Donald Trump said Tuesday he was monitoring “positive” steps in trade talks with the European Union, after he agreed to delay a 50% tariff on goods from the bloc until July 9. “I have just been informed that the EU has called to quickly establish meeting dates,” Trump wrote in a post on the Truth Social platform. “This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America.” Trump also said Tuesday that the EU had been “slow walking” in negotiations with the White House over a trade deal.

Trump on Sunday said that he would push back the 50% levy deadline on the EU to July 9 following a request from Ursula von der Leyen, the president of the European Commission. That comes after Trump last week proposed an import tax of 50% on the EU beginning June 1. National Economic Council director Kevin Hassett told CNBC that he expects to “see a few more deals even this week.”

China & EU To Hold Fresh Trade Talks Amid Global Headwinds

Chinese Commerce Minister Wang Wentao and EU Trade Commissioner Maros Sefcovic are set to hold another round of talks in early June on the sidelines of a WTO meeting in Paris, according to the Global Times. “The two sides will conduct in-depth exchanges on the important topic of China-EU economic and trade cooperation,” a source said, adding the talks will help prepare for future high-level exchanges. This meeting marks the third between the two in 2025, reflecting a notable increase in China-EU engagement amid the global trade uncertainty. Recent initiatives include the China-EU Working Group on Financial Cooperation meeting in Brussels (May 13–14) and the 10th China-France High-Level Economic and Financial Dialogue in France on May 15.

The meeting comes after President Trump agreed to extend the deadline for the EU to face 50% tariffs until July 9, following a phone call with Commission President Ursula von der Leyen. That’s the same month European leaders will travel to Beijing for a summit with their Chinese counterparts. The Chinese government has sought to shore up ties globally to resist Trump’s tariff regime, including by offering European groups rare access to senior policymakers and vowing to improve China’s business environment for foreign companies. Despite the outreach, European trade officials remain sceptical, citing “promise fatigue” and ongoing disputes over issues such as state support for Chinese companies and trade barriers.

BOJ's Ueda Calls For Vigilance Over Food Inflation Risks

The Bank of Japan (BOJ) must be vigilant to the risk that rising food prices could push up underlying inflation that is already near its 2% target, Governor Kazuo Ueda said, signalling the central bank's readiness to continue its rate hikes. The BOJ has kept interest rates low as inflation expectations, or the public's perception on future price moves, stand between 1.5% and 2%, the highest in 30 years though still below its 2% target, Ueda said in a speech at a BOJ-hosted conference. But a renewed rise in food prices, particularly a 90% spike in the price of rice, is pushing up not just headline but underlying inflation, which is typically influenced mostly by improvements in the economy and a tight job market, Ueda said. "Our baseline view is that the effects of food price inflation are expected to wane," he said. "However, given that underlying inflation is closer to 2% than a few years ago, we need to be careful about how food price inflation will impact underlying inflation," he added.

Although the BOJ downgraded its forecasts due to trade policy uncertainties, it expects underlying inflation to gradually move toward its 2% target over the second half of its forecast horizon running through fiscal 2027, Ueda said. "To the extent that incoming data allows us to gain more confidence in the baseline scenario, as economic activity and prices improve, we will adjust the degree of monetary easing as needed" by raising rates, he said. Japan's core inflation hit 3.5% in April, accelerating at its fastest annual pace in more than two years due largely to a 7% surge in food costs, raising the odds of another rate hike this year.

Japan Loses Top Creditor Status For First Time In 34 Years

Japan lost its position as the world’s largest creditor nation for the first time in 34 years, despite posting a record amount of overseas assets. Japan’s net external assets reached ¥533.05 trillion (US$3.7tn) at the end of 2024, rising about 13% from the previous year, according to data released Tuesday by the Ministry of Finance. While the figure marked an all-time high, it was overtaken by Germany, whose net external assets totalled ¥569.7 trillion. China remained in third place with net assets of ¥516.3 trillion. Germany’s ascent reflects its substantial current account surplus, which reached €248.7 billion in 2024 thanks largely to a strong trade performance. Japan’s surplus in turn was ¥29.4 trillion according to the finance ministry, equivalent to around €180 billion. Last year the euro-yen rate rose around 5%, exaggerating the increase in German assets versus Japanese in yen terms. For Japan, a weaker yen contributed to increases in both foreign assets and liabilities, but assets grew at a faster pace, driven in part by expanded business investment abroad.

Indian Cricket Gives Disney-Ambani Almost As Many Users As Netflix

Indian streaming platform JioHotstar has amassed more than 280 million subscribers in recent months driven by the popularity of Indian Premier League cricket, according to the company, almost as many as the world’s largest streamer Netflix has globally. “It has been the biggest season of IPL till now. Both in terms of viewership as well as monetisation,” Sanjog Gupta, JioStar’s chief executive for sports, told the FT.

JioStar, the six-month-old product of a merger of a unit from Mukesh Ambani’s Reliance media empire with Disney in India that is also backed by James Murdoch, now owns the digital and television rights for the tournament, previously split between the two rivals. Fans used to be able to watch matches on Reliance’s Jio for free, but since the merger, cricket fans have had to subscribe to JioStar’s service. Subscriptions to JioHotstar, the streaming platform, have jumped from 50mn in March to 280mn this month, just shy of the 300mn claimed by Netflix globally. Since the tournament began on March 22, some 450mn people have watched cricket on TV and the same number again on digital platforms, Gupta said, although there has been some overlap.

EU Tells Shein To Tackle Consumer Law Breaches Or Face Fines

Shein Group, the Singapore-based e-commerce firm, has been warned by European Union regulators it could face fines unless it clamps down on consumer protection violations on its platform. Fake discounts, pressure selling, and other practices on its fast-fashion website breach the law, the European Union (EU) has said. The bloc said it has given Shein one month to respond to its findings or face fines based on its sales in the EU countries where it says it has breached the law. The European Commission and consumer watchdogs from Belgium, France, Ireland and the Netherlands flagged several breaches of consumer law, the regulators said in a statement Monday. The list of grievances against Shein includes touting fake discounts, using digital cues to pressure users into buying, featuring misleading and deceptive product information, and hiding the details to contact the company’s customer service.

The step, known as a “common position,” is the next move in a probe into Shein’s compliance with rules on product safety and consumer law that opened in February. If Shein fails to address the violations, regulators could levy fines of at least 4% of its yearly sales in affected member states. Temu and Apple faced similar actions back in November from the commission, which is increasingly leaning on a mechanism known as the Consumer Protection Cooperation Network, a body focused on tackling platforms that breach rules.

Asian Markets Mixed Ahead Of Rate Decisions

Asian stocks were mixed Tuesday in the absence of guidance from Wall Street, which was closed for Memorial Day on Monday, and ahead of interest rates decisions from New Zealand (Wednesday) and South Korea (Thursday). Japan’s Nikkei 225 rebounded from losses in the morning session to close 0.5% higher at 37,724. In South Korea, the Kospi index declined 0.3%, reversing course from the three-month high in Monday’s session. In Australia, the benchmark S&P/ASX 200 added 0.6%. India’s BSE Sensex Index fell 0.8% to 81,552.

Yields on super-long Japanese government bonds (JGBs) fell Tuesday, following reports by Reuters that the country’s finance ministry may reduce the issuance of those bonds. The government took the rare step of canvassing primary dealers and other market participants for their views on issuance, raising speculation it may scale back supply. Reuters reported that the ministry may consider tweaking the composition of its bond programme for the current fiscal years, which could involve trimming the issuance of super-long bonds. The move comes after last week’s 20-year bond auction drew the weakest demand in over a decade, heightening concerns ahead of the upcoming 40-year debt sale. The yield on 30-year JGBs fell 6 bps to 2.86%, its lowest since May 14, while the 20-year JGB yield fell 7 bps to 2.35%.

China Markets Volatile As EV Stocks Decline

Stocks in Hong Kong and the mainland were hurt for a second day by weakness in Chinese EV manufacturers as a vicious price war breaks out in the sector. Mainland China’s CSI 300 index retreated 0.5% in choppy trade to 3,839. Hong Kong’s Hang Seng Index was up 100 points, or 0.4%, at 23,382, recovering from a loss of 0.5% earlier in the day. The latest government data showed China’s industrial profits rose a better-than-expected 1.4% in April, compared to 0.8% the month before. The Hang Seng Tech Index rose 0.5%.

Shares of Chinese bubble tea companies listed in Hong Kong gained sharply. Strong moves were seen in Mixue which jumped 10.0% Tuesday, reversing course from four consecutive days of decline. The company, which is known for its milk tea, fruit drinks, ice cream and coffee, has seen substantial investor interest given its popularity among GEN Z consumers and strong international expansion plans. Its shares have more than doubled since its listing on March 3. Other Chinese bubble tea companies listed in Hong Kong also traded higher with Nayuki up 4.6%, while Sichuan Baicha Baidao surged 9.0% and Guming rose 7.3%.

Shares in Meituan fell as much as 5.5% on Tuesday, hitting an eight-month low earlier in the session, after reporting Q1 results after the market closed Monday. The Beijing-based firm warned that global expansion efforts and intensifying competition at home may hurt short-term profitability. Longer term, CEO Wang Xing said its international push “represents a very good, very promising growth opportunity.” But he said it was “impossible” to give accurate financial guidance for the rest of the year amid stiffer competition. Meituan has been involved in a heated price war with new industry players, including JD.com as well as Taobao-backed Flash Sale, which entered the market to challenge Meituan's dominance at home. Shares of Meituan rebounded in the afternoon session to close 2.1% higher Tuesday.

Hong Kong Bourse Plans To Start Zero-Day Options Trading In 2026

Hong Kong's stock exchange is planning to launch options that expire within a day, known as "zero-days to expiry" contracts, on the Hang Seng Index as early as the first half of 2026. The exchange has been consulting with market participants and received positive feedback, with HKEX's managing director citing "great demand" for shorter-dated contracts. HKEX has been expanding its options offerings, including weekly contracts on the Hang Seng Tech Index and 10 single stocks, with derivatives trading in Hong Kong growing strongly this year.

European Stocks Rise On ‘Positive’ Steps In Trade Talks

European stocks rose Tuesday as US-EU trade tensions eased. The Stoxx Europe 600 index closed 0.3% higher, extending gains slightly after Trump’s comments on ‘positive’ steps in trade talks between the two economies. The Stoxx has risen 1.3% this week, more than wiping out its decline on Friday after Trump’s first suggestion of the 50% tariff. Germany’s DAX rose 0.8% to a record high. The FTSE 100 in London posted a gain of 0.7%.

“Everyone has become convinced that Trump’s tariff talk is all sound and fury that signifies nothing,” said Peter Tchir, head of macro strategy at Academy Securities. “There will be tariffs, but we’re not going to set up these massive tariffs that are going to be disastrous to the economy. We are not going to see 50% levels.”

Yields on government bonds ticked lower across the board in Europe on Tuesday, as investors continued to digest Donald Trump’s pause on 50% tariffs on the European Union. The yield on German 10-year bunds was 3 bps lower at 2.53%. The UK’s 10-year gilt yield dropped 2 bps to 4.67%.

On the economic front, France’s inflation rate dropped further below the European Central Bank’s 2% target, reaching a more than four-year low and adding to arguments that borrowing costs can be cut further. French annualised harmonised inflation cooled to 0.6% in May. It marked a slowdown from April, when French inflation rose by 0.9% on an annual basis. Food inflation in the UK rose by 2.8% year-on-year in May, according to the British Retail Consortium, marking the fourth consecutive month of price rises. The figure was up from 2.6% year-on-year growth in April, and above the three-month average of 2.6%. In Germany, consumer sentiment improved in May, the GfK Consumer Climate report showed on Tuesday, but US tariffs policies were found to be dampening willingness to spend. The report marked the third consecutive month in which the index moved higher, driven in part by slowing inflation and “good wage settlements” but despite the improvement, sentiment remained low, and consumers were hesitant to make discretionary purchases.

US Stocks Surge On Hopes For A US-EU Trade Deal

On Wall Street Tuesday, traders returned from a long holiday weekend and bid stocks higher following positive developments between the US and EU in their trade negotiations. The prospect of even greater tariffs on the US’ biggest trade partner rattled markets when it was threatened by Trump last Friday. But sentiment improved yesterday after European Commission President Ursula von der Leyen said in a post on X over the weekend that the EU was “ready to advance talks swiftly and decisively,” while European Trade Commissioner Maros Sefcovic said Monday that he had “good calls” with US Commerce Secretary Howard Lutnick. Stocks were also boosted as data released after the market open showed US consumer confidence rebounded in May after five consecutive months of declines.

The S&P 500 rose 2.1% to 5,922. All 11 of the benchmark index’s sectors ended the session in positive territory. The Dow gained 741 points, or 1.8%, to finish at 42,344. Both snapped four-day losing streaks. The Nasdaq Composite jumped 2.5% to 19,199 boosted by technology names. Traders are eagerly awaiting the earnings report from Nvidia after the close today. Nvidia closed 3.2% higher ahead of that report. More than 95% of S&P 500 companies have reported this earnings season and almost 78% have surpassed analyst expectations, according to FactSet.

European sales of Tesla vehicles plunged in April, as the electric carmaker continues to face reputational damage regionally and rising competition. Tesla sold 7,261 cars in Europe in April, down 49% year-on-year, according to the European Automobile Manufacturers’ Association (ACEA). That drop came even as overall electric car sales rose 34.1% annually in April. Tesla has faced brand damage over the past few months because of CEO Elon Musk’s political involvement with US President Donald Trump, with protests erupting at Tesla dealerships across Europe in March. Tesla sales plunged nearly 40% year-on-year over the January-April period. However, shares of Tesla jumped 6.9% after Musk said he was shifting his focus away from politics and back into his companies.

US Steel shares advanced 2.0% after CNBC reported that Japan’s Nippon Steel is expected to close its acquisition for $55 per share. The $55 per share bid for US Steel is the offer that Nippon Steel originally made for the company before the deal was blocked in January. Trump said Friday Nippon Steel will invest US$14 billion over the next 14 months in a “partnership” with US Steel. Bloomberg News reported Tuesday that the partnership would involve the US government receiving a so-called golden share in United States Steel Corp. as a condition for approving Nippon Steel’s proposed acquisition of the American company. The plan, which would give the government de facto veto rights on certain company decisions, is part of ongoing talks between authorities and the companies, according to Bloomberg.

Shares of Temu owner PDD Holdings plunged 13.6% in US trading after its quarterly sales and profit missed estimates, highlighting the impact of trade tensions between Beijing and Washington on its business. PDD's revenue for the March quarter was 95.7 billion yuan, falling short of the average analyst estimate of 101.6 billion yuan, with net income totalling 14.7 billion yuan, below the expected 25.7 billion yuan. The company faces intensifying competition in the domestic China market and shifting trade policies that have hurt Temu, and will have to make pricey investments to adjust its business model, which will likely weigh on its profitability in the short term.

US Treasuries Boosted By Rally In JGBs

The rally in Japanese bonds spilled over to US Treasuries with long-dated Treasury yields retreating as Japan signalled it may pull back on long-curve issuance. The yield on the 30-year Treasury, which has risen sharply over the past month amid fears about a ballooning US deficit, fell by 8 bps to 4.96% on Tuesday. The 10-year yield was 6 bps lower at 4.45%.

Asian Currencies Continue To Rally As Dollar Weakens

The US Dollar Index rebounded from losses in Asian trading closing 0.6% higher at 99.6. On Friday, it settled at its weakest level since September with Donald Trump’s tax bill threatening to increase the US$37 trillion debt burden. It’s down more than 7% since the start of the year as enthusiasm fades for the world’s reserve currency.

Asia-Pacific currencies continued to rally. The Australian dollar hit its highest level since last December. The Taiwanese dollar advanced for the sixth consecutive day and was last seen 0.1% stronger against the greenback. The Taiwanese dollar is approaching its peak set earlier this month, when it had the biggest single-day gain since the 1980s and is less than 1% shy of reaching this month's strongest level. The Japanese yen initially strengthened against the dollar after Bank of Japan Governor Kazuo Ueda indicated his intention to continue to raise interest rates if the economy improves. But it gave up gains to close the US session 1.1% lower at ¥144.35. In Southeast Asia, the Singapore dollar strengthened to an eight-month high. The Malaysian ringgit appreciated by 0.2% against the dollar after hitting its highest level in nearly three weeks earlier in the session. The Thai baht was trading at an eight-month high. However, the offshore Chinese yuan slipped 0.1% to Rmb 7.16, after hitting the highest level since early November 2024 the previous day.

Gold Loses Shine After US-EU Trade Deal

Spot gold fell 1.9% Tuesday as investors bet on a recovery in stocks and riskier assets after the US extended its 50% tariff deadline on the European Union. Bullion settled at $3,330 per troy ounce after a 0.7% decline Monday following the announcement of the trade deal.

Oil Falls On Higher OPEC+ Output Prospects

Brent crude oil futures fell 0.7% to $64.30 per barrel on Tuesday, weighed down by concerns over a further increase in OPEC+ supply. The group is set to meet later this week and will likely finalize July production targets, with reports indicating a potential output rise of 411,000 bpd.

Bitcoin Trades Close To Record High

Bitcoin traded around $110,000, close to record highs and up slightly over the past 24 hours.

Peter Lewis’ Money Talk Podcast

On Wednesday’s “Peter Lewis’ Money Talk” podcast, I’ll be joined by Asian Investment Strategist, Kenny Wen and Hong Kong based macro strategist, Patrick Bennett. With a view from Japan is Nick Smith, Japan strategist at CLSA.

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