MORNING BRIEFING - USA/Asia -2-

DJ MORNING BRIEFING - USA/Asia

The morning market overview, compiled by Dow Jones Newswires:

HOLIDAY NOTICE

MONDAY: There is no trading in Singapore due to the Vesakh holiday.

TOPIC OF THE DAY

US President Donald Trump wrote on social media that significant progress had been made in trade talks with China. "A very good meeting with China today in Switzerland. Many things discussed, much agreed upon. A total reset, negotiated in a friendly but constructive manner," he wrote, without providing further details. Chinese leader Xi Jinping decided to send his top advisers, as the Wall Street Journal previously reported. In addition to his economic right-hand man, He Lifeng, Xi's Minister of Public Security, Wang Xiaohong, is also in the Chinese entourage. The trade talks marked the beginning of a potential thaw in trade relations between the world's two largest economies. Since the beginning of his second term, Trump has imposed 145 percent tariffs on Chinese goods, while Beijing has retaliated with 125 percent tariffs on US products.

OUTLOOK COMPANY +

07:00 JP/Mazda Motor Corp, Annual Results

ECONOMIC OUTLOOK

No important release dates announced.

OVERVIEW OF INDICES

 Index last +/- %
E-Mini Future S&P-500 5,764.00 +1.5%
E-Mini Future Nasdaq-100 20,553.75 +2.1%
S&P/ASX 200 (Sydney) 8,238.10 +0.1%
Nikkei-225 (Tokyo) 37,648.48 +0.4%
Hang-Seng (Hongk.) 23,122.79 +1.1%
Shanghai-Comp. 3,358.88 +0.5%
Kospi (Seoul) 2,593.91 +0.6%

FINANCIAL MARKETS

EAST ASIA (HISTORY)

Friendly - Reports that progress was made in the US-China exploratory talks in Switzerland over the weekend are providing optimism. Details will be announced later in the day, according to the US side. Also helping the mood is the fact that a ceasefire has been reached between India and Pakistan in the recently renewed military conflict. New price data may have a slight dampening effect on the Chinese stock markets. They show that the Chinese economy remains sluggish. Producer prices fell again in April, at a somewhat faster pace. Consumer prices also fell, by 0.1 percent year-on-year. Against the backdrop of US-China progress, the winners include chip stocks such as Renesas Electronics (+3.0%) and Advantest (+6.7%). Pharmaceutical stocks, on the other hand, are trending lower after President Trump announced he would sign an executive order to reduce the cost of prescription drugs. Chugai Pharmaceutical fell by 9.9 percent, and Daiichi Sankyo by 7.5 percent. In Seoul, chip stocks SK Hynix and Samsung Electronics each rose by around 2 percent, while in Hong Kong, SMIC rose by 1.1 percent.

WALL STREET

 INDEX last +/- % absolute +/- % YTD
DJIA 41,249.38 -0.3% -119.07 -3.4%
S&P 500 5,659.91 -0.1% -4.03 -4.3%
NASDAQ Comp 17,928.92 +0.0% 0.78 -7.2%
NASDAQ 100 20,061.45 -0.0% -2.12 -4.5%

Friday Thursday
NYSE turnover (shares) 1,008 million 1,230 million
Winners 1,552 1,832
Losers 1,183,936
unchanged 91 67

Little changed - After US President Donald Trump announced a trade agreement with Great Britain the day before, China came into focus because initial talks were announced for the weekend. A tweet by Trump, in which he believed an "80 percent tariff on China" was received somewhat negatively. While this would be significantly lower tariffs than the current 145 percent on Chinese US imports, it is questionable whether tariffs of 80 percent would revive trade with the US. Among individual stocks, Expedia fell by 7.3 percent. The digital travel platform recorded weaker-than-expected demand for travel in the first quarter. CEO Ariane Gorin expects this trend to continue. The ride-hailing company and Uber competitor Lyft reached profitability thanks to higher user numbers, which helped the share price jump 26.1 percent.

US BONDS

There was little activity on the US bond market. Following the previous day's increase, the yield on 10-year US Treasury bonds rose by 1 basis point to 4.38 percent.

CURRENCY

 last +/- % 00:00 Fri, 9:10 % YTD
EUR/USD 1.1218 0.0 1.1216 1.1243 +8.7%
EUR/JPY 163.89 -0.0 163.96 163.35 +0.4%
EUR/GBP 0.8449 -0.1 0.8453 0.8486 +2.3%
GBP/USD 1.3277 0.0 1.3271 1.3249 +6.2%
USD/JPY 146.11 -0.0 146.17 145.30 -7.6%
USD/KRW 1,403.81 0.5 1,396.16 1,402.54 -5.4%
USD/CNY 7.2102 -0.1 7.2177 7.2174 +0.1%
USD/CNH 7.2225 -0.0 7.2250 7.2432 -1.2%
USD/HKD 7.7934 0.2 7.7774 7.7757 +0.1%
AUD/USD 0.6434 0.2 0.6422 0.6404 +3.6%
NZD/USD 0.5929 0.1 0.5921 0.5895 +5.6%
BTC/USD 103,978.10 -0.3 104,332.20 103,439.15 +10.4%
YTD based on the previous day's closing price

The dollar retreated from a one-month high following the US-UK trade agreement, with the dollar index losing 0.3 percent. The greenback is likely to consolidate after its recent significant depreciation, but remains vulnerable if tariff concerns resurge, according to Erste Group analysts.

++++ RAW MATERIALS +++++

OIL

 CRUDE OIL last VT closing +/- % +/- USD % YTD
WTI/Nymex 61.42 61.05 +0.6% +0.37 -15.1%
Brent/ICE 64.31 63.88 +0.7% +0.43 -14.6%
YTD based on the previous day's closing price

Oil prices rose on hopes for a resolution to the trade dispute. This would be beneficial for the global economy and thus potentially boost demand for crude oil – especially in China. Brent and WTI prices rose by around 1 percent.

METALS

 last previous day +/- % +/- USD % YTD
Gold 3,271.39 3,324.25 -1.6% -52.86 +26.7%
Silver 29.30 29.08 +0.8% +0.22 +3.9%
Platinum 893.94 891.87 +0.2% +2.07 +1.6%
Copper 4.6535 4.611 +0.9% +0.04 +14.6%
YTD based on the previous day's closing price

The weakness of the dollar supported the price of gold. The troy ounce gained 0.7 percent to $3,328, after coming under significant pressure the previous day. "Sentiment remains fragile," Swissquote said, referring to the negotiations between China and the US over the weekend, further arguing for the precious metal. In Asian-dominated trading on Monday, the price fell significantly. Traders reported that safe havens, including the precious metal, were not in demand due to hopes of an easing of the tariff dispute.

REPORTS SINCE FRIDAY, 8 PM

CHINA - Inflation

Chinese consumer prices fell again in April, indicating that Beijing's efforts to stimulate domestic consumption have not been successful. They fell by 0.1 percent year-on-year, matching the decline from the previous month and marking the third consecutive month of decline. Economists had forecast this. The producer price index fell by 2.7 percent, widening the decline from March's 2.5 percent. Economists had expected a decline of 2.8 percent.

INDIA/PAKISTAN

US President Donald Trump has announced that India and Pakistan have agreed to a complete and immediate ceasefire after a long night of US-mediated talks.

JAPAN

Japan's current account showed a non-seasonally adjusted surplus of 3.678 trillion yen for March. Economists had estimated 3.73 trillion.

UKRAINE/RUSSIA

Ukrainian President Volodymyr Zelensky has called on Vladimir Putin to meet him in Istanbul this week, after US President Donald Trump backed the Russian president's offer to begin negotiations before a ceasefire. Zelensky said he would expect Putin in Turkey on Thursday, raising the stakes in a flurry of diplomatic initiatives and political maneuvering as both sides seek to appease Trump, who is pushing for a swift end to the three-year war, without making significant concessions. Putin did not immediately respond to Zelensky's offer.

USA - Monetary policy

(MORE TO FOLLOW) Dow Jones Newswires

May 12, 2025 01:55 ET (05:55 GMT)

DJ MORNING BRIEFING - USA/Asia -2-

Kevin Warsh, a potential candidate for Federal Reserve chairman next year, believes the central bank itself is responsible for fears that tariff increases could make it harder to control inflation. When central banks "claim that external changes in the price level affect inflation... then in a sense they are admitting something that runs counter to their own interests," Warsh said.

KATE FARMS/DANONE

Danone is acquiring a majority stake in Kate Farms, a California-based manufacturer of herbal supplements. Danone did not disclose financial details.

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(END) Dow Jones Newswires

May 12, 2025 01:55 ET (05:55 GMT)

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