Morning Wrap (25.04.2025)

Asian tech stocks gained on strong Alphabet earnings with Japan's Nikkei 225 leading gains at 0.4%, followed by Hong Kong's Hang Seng and South Korea's KOSPI advancing 0.3%. China's Shanghai Composite and CSI 300 indexes remained flat to slightly lower amid ongoing trade war concerns. Markets were buoyed by Alphabet's stellar Q1 results showing $90.23 billion revenue (up 12% YoY) and record quarterly profit, driving a 4% jump in its shares aftermarket.

Tokyo inflation jumps higher than expected with core CPI rising to 3.4% YoY in April, up sharply from 2.4% in March and above the 3.2% consensus. The broad-based price gains in services and housing complicate next week's Bank of Japan policy decision amid global trade uncertainties, though markets expect rates to remain unchanged until the tariff situation clarifies.

US-China trade tensions show mixed signals as both sides consider tariff exemptions. China is weighing exemptions on U.S. medical equipment and industrial chemicals from its 125% tariffs according to Bloomberg, while President Trump has hinted at "substantial" tariff reductions in potential trade talks, though adding they "won't be zero." Beijing officially denies that negotiations have begun despite Trump's claims to the contrary.

Apple plans complete shift of US iPhone production to India by end-2026 according to Financial Times, aiming to source all 60+ million iPhones sold annually in the U.S. from India to avoid Chinese tariff exposure. The accelerated timeline would require doubling India's iPhone output in just over a year, significantly faster than Apple's decades-long development of Chinese manufacturing infrastructure.

Oil prices edge higher but remain on track for weekly losses with Brent gaining 0.75% to $66.09 and WTI up 0.8% to $63.38. Both benchmarks are set to decline nearly 2% this week amid OPEC+ output hike expectations and lingering trade war concerns. Several OPEC+ nations are reportedly pushing to accelerate production increases in June, following May's surprise 411,000 bpd boost.

Japan announces emergency economic package to counter U.S. tariff impacts, including support for corporate financing, subsidies to lower gasoline prices by ¥10 per liter, and partial coverage of electricity bills for three months starting July. Prime Minister Ishiba instructed cabinet members to aid firms worried about tariff impacts while Economy Minister Akazawa prepares for next week's second round of trade talks in Washington.

Intel reports older-gen chip demand surge amid trade war with CEO Michelle Johnston Holthaus noting strong demand for previous generation PC and server processors as economic concerns and tariff uncertainties prompt customers to "hedge their bets" with more affordable options. Despite beating Q1 sales estimates as customers stockpiled chips ahead of tariffs, Intel forecast disappointing Q2 results, sending shares down 5% in extended trading.

Rising tensions in Ukraine conflict impact markets following Russia's deadliest missile and drone assault on Kyiv in nearly a year, killing at least 12 people. President Trump issued a direct rebuke to Russian President Putin on social media, stating "Vladimir, STOP!" and warning that the strikes jeopardize ongoing peace negotiations. The escalation added to market anxiety and supported oil prices on fears of potential energy supply disruptions.

Asian currencies weaken amid trade uncertainty with the Japanese yen leading losses, dropping 0.7% against the dollar following the stronger-than-expected Tokyo inflation data. The U.S. Dollar Index jumped 0.5% after declining in the previous session, reflecting significant volatility amid President Trump's comments on the Federal Reserve and China tariffs. Most regional currencies including the Korean won, Singapore dollar, and Malaysian ringgit also weakened against the greenback.