Morning wrap (03.09.2025)

Wall Street closed lower yesterday, reflecting market concerns over renewed trade uncertainty and a weaker-than-expected ISM manufacturing report. Futures indicate continued pessimism for today’s session (US500: -0.3%, EU50: -0.3%).

Donald Trump announced he will ask the Supreme Court for an expedited review of an appeals court ruling that declared most of his tariffs illegal. He warned their removal would hurt the U.S. economy, blaming the ruling for stock market declines. Enforcement has been delayed until October 14 to allow time for the Supreme Court’s decision.

U.S. LNG exports hit a record 9.33 million tons in August thanks to rising production at Plaquemines. Europe remained the main buyer, importing 6.16 million tons (66%), up from July. Demand declined in Asia and Latin America.

In the Asia-Pacific region, declines dominate, driven by trade uncertainty, mixed Chinese PMI data, and profit-taking. AU200.cash traded in the red for the 4th session in a row (-1.25%), while CHN.cash (-1.1%), HK.cash (-0.9%), and Japan’s Nikkei 225 (JP225: -0.55%) also fell, though Japanese losses were cushioned by gains amid some exporters (e.g. Canon: +0.5%).

Australia’s GDP grew above expectations in Q2 at 0.6% q/q (forecast 0.5%, prior 0.3%). Growth was driven by private consumption (both essentials and discretionary items such as recreation, culture, cafes) and government spending (0.2 pp). Net exports remained positive despite tariffs, while investments declined as many infrastructure projects neared completion.

South Korea’s GDP also beat expectations in Q2, growing 0.7% q/q (forecast and prior: 0.6%).

China’s Caixin services PMI unexpectedly rose to a 15-month high (53 vs forecast 52.4, prior 52.6), driven mainly by new business growth. However, margins remain under pressure from rising wages and material costs, prompting companies to cut jobs.

The U.S. dollar strengthened against most currencies for the second straight session, with the biggest gains versus emerging market currencies (e.g. USDPLN: +0.2%). Pressure on the pound continues after yesterday’s sell-off of UK 30-year bonds (GBPUSD: -0.2% to 1.336). The yen extended losses (USDJPY: +0.2%), while the Australian dollar (AUDUSD: -0.1%) and euro (EURUSD: -0.1% to 1.1628) showed the most resistance.

OIL saw a correction after recent gains (Brent and WTI down about -0.4%), NATGAS fell 0.5%, moving near yesterday’s open.

Gold slowed its sharp rally but held above the record $3,500/oz (-0.05% to $3,530/oz). Silver also corrected (-0.5% to $40.69/oz).