Asia-Pacific markets traded mixed on Wednesday following US President Donald Trump's decision to rule out extending the 1 August deadline, the newest extended date on which tariffs are set to take effect. Trump also announced a 50% tariff on copper imports and threatened sector-specific tariffs, including up to 200% on pharmaceutical imports, which would take effect in one or more years. US stocks slipped on Tuesday as investors sorted out the newest tariff details, while European stocks saw gains. Gold prices fell, trading around USD 3290 per ounce, while bitcoin gained 0.6%, trading near USD 109,000 and hovering just below all-time highs. Treasury yields were little changed this week, with the 2-year yield at 3.9% and the 10-year yield rising slightly to 4.4%.
The newest US tariff measures could disrupt global supply chains, with Asia, particularly ASEAN countries, facing heightened economic risks due to dependency on both the US and China. Asian stocks were trading mixed on Wednesday, reflecting a lack of clarity in the ongoing tariff dispute. Japan’s Nikkei 225 was up 0.3%, while Korea’s Kospi rose 0.6%. Meanwhile, Australia’s S&P/ASX 200 dropped 0.6%, weighed down by weakness in commodity-linked sectors. Mainland China’s CSI 300 added 0.3%, but Hong Kong’s Hang Seng Index fell 1%.
China's producer prices dropped 3.6% year-on-year in June, the steepest decline since July 2023, reflecting deepening deflationary pressures amid weak consumer demand and ongoing price wars. While the consumer price index rose 0.1% during the same period, marking its first increase in five months, core inflation excluding food and energy climbed 0.7%, the highest in 14 months. Overcapacity and aggressive price competition appear to be contributing to deflation, with policymakers pledging tighter regulations.
The Reserve Bank of New Zealand (RBNZ) kept its official cash rate at 3.25% on Wednesday, following six consecutive cuts since August 2024. The central bank noted that medium-term inflation is easing as expected, with headline inflation projected to reach 2% by early 2026. However, inflation may temporarily rise toward the upper end of the 1–3% target band in mid-2025. The RBNZ also warned of uncertainties from global trade tensions and slowing economic growth, suggesting that further rate cuts could be considered if price pressures continue to decline. The move comes just one day after the Reserve Bank of Australia (RBA) unexpectedly kept its policy rate unchanged at 3.85%, citing the need for additional inflation data to ensure progress toward its 2.5% target.
US equities saw mixed performance on Tuesday as investors remained cautious over trade tensions stemming from Trump's tariff policies. The Dow Jones Industrial fell 0.4% to 44,240.76 points, while the S&P 500 declined slightly, and the Nasdaq 100 edged up 0.1%. Alternative energy stocks dropped sharply after the administration advanced plans to end tax credits for solar and wind projects, with sector leaders like SolarEdge and First Solar losing up to 11.4%.
In European macroeconomic data, German exports fell by 1.4% and imports dropped by 3.8% in May 2025 compared with April, according to the German statistics agency Destatis. Exports totalled EUR 129.4 billion, while imports reached EUR 111.1 billion, resulting in a trade surplus of EUR 18.4 billion. Year-on-year, exports rose slightly by 0.4%, and imports increased by 4.2%. Trade with EU countries saw sharper declines, with exports to euro area nations down 2.6% month-on-month, while exports to non-EU countries fell by 0.3%. The Euro Stoxx 50 rose 0.7% to 5,378.45 points on Tuesday, supported by a 0.6% increase in France’s CAC 40 and a 0.6% rise in Germany’s DAX, which closed at 24,206.91 points. Switzerland’s SMI lagged slightly, gaining just 0.1%.
Corporate news in focus: There is no major corporate news scheduled today.
Economic data in focus: Federal Open Market Committee (FOMC) meeting minutes (20:00).
Global economic and market trends at a glance
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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.