Morning wrap (02.09.2025)

After yesterday’s lack of Wall Street session, U.S. index futures are slipping amid renewed uncertainty and legal turmoil surrounding Donald Trump’s tariffs (US100: -0.35%, US500: -0.3%, US30: -0.2%, US2000: -0.2%). Pessimism is also visible ahead of the European open (EU50: -0.3%).

According to U.S. Treasury Secretary Scott Bessent, reciprocal tariffs will be upheld by the Supreme Court, after a federal appeals court reaffirmed an earlier ruling that the tariffs were imposed illegally and abused presidential emergency powers. Bessent stressed that fentanyl and ballooning trade deficits are truly national threats that must be addressed.

Sentiment in Asia-Pacific is mixed. CHN.cash and HK.cash trade higher (+0.4% and +0.1% respectively), though Chinese semiconductor producers saw significant corrections on profit-taking (e.g. Hua Hong Semiconductor: -10%). JP225 and AU200.cash are down 0.25%. India’s Nifty 50 rises 0.4% despite Trump’s harsher rhetoric on trade with India.

New Zealand’s exports rose 9.9% y/y in June 2025, while imports grew 3.2% y/y. On a quarterly basis, exports fell for the first time since December 2024 (-3.7%).

Australia unexpectedly reduced its current account deficit in Q2 (-13.7bn AUD vs forecast -15.9bn, prior -14.7bn).

“Inflation in Japan is gradually accelerating toward 2% and will likely converge with the Bank of Japan’s current target,” said BOJ Governor Ryozo Himino. According to Himino, the baseline scenario assumes further rate hikes in response to economic activity, with tariffs having less of a negative impact, which further supports monetary tightening.

The dollar is rebounding against most currencies after broad weakness yesterday (USDIDX: +0.2%). The weakest currency is the Japanese yen (USDJPY: +0.5%), while the Canadian dollar (USDCAD: +0.05%) and the euro (EURUSD: -0.14% to 1.1694) show the most resilience.

Brent and WTI crude oil rise about 0.6%, extending yesterday’s gains on generally weaker dollar and supply concerns from Russia. NATGAS, meanwhile, continues to correct downward by nearly 1%.

Gold adds another 0.5%, testing a fresh record high ($3,496/oz). Silver (+0.1%), platinum (+0.8%), and palladium (+0.8%) are also climbing.