Morning wrap (12.05.2025)

U.S. indices retreated on Friday amid expectations for trade negotiations between China and the U.S. (DJIA: -0.3%, S&P 500: -0.07%, Russell 2000: -0.16%, Nasdaq unchanged).

After a weekend of talks in Geneva, neither side announced any concrete decisions. Nevertheless, comments about an "important first step" from China’s PM and "significant progress" from the U.S. Treasury Secretary are fueling early trading optimism. Scott Bessent announced a joint statement on the matter will be released today.

Vladimir Putin proposed resuming peace talks with Ukraine without preconditions on May 15 in Istanbul. Volodymyr Zelensky responded that he would personally wait for the Russian president in the Turkish capital.

Indices in the Asia-Pacific region are starting the week in the green.Gains were seen in the Chinese HSCEI (+0.8%), Japanese Nikkei 225 (+0.2%), Korean Kospi (+0.7%), and Australian S&P/ASX 200 (+0.15%).

India’s blue-chip Nifty 50 index rebounded nearly 3% following the announcement of a ceasefire between India and Pakistan. The peace talks were mediated by the U.S. administration.

April CPI inflation in China held steady at -0.1% as forecast. PPI fell more than expected from -2.5% to -2.7% (forecast: -2.6%).

Pharmaceutical companies in the Asia-Pacific region are seeing losses after Donald Trump announced he would sign an executive order mandating that drugs in the U.S. be sold at the lowest price offered by any country or supplier. The president estimated drug price reductions of 30–80%, though experts question the feasibility (legal scope) of implementing such a measure.

In the forex market: the U.S. dollar is strengthening against "safe haven" currencies like the yen and franc (USDJPY: +0.45%, USDCHF: +0.38%). The euro is under pressure due to optimism in U.S. index futures (EURUSD: -0.22% to 1.1225), and the pound is also retreating (GBPUSD: -0.2%). Antipodean currencies are appreciating (AUDUSD, NZDUSD: +0.25%).

Gold is slipping in response to signs of geopolitical stabilization and increased risk appetite (-1.5% to $3,275 per ounce),f ollowed by silver (-1.05% to $38.82 per ounce).

Brent and WTI crude oil are gaining 0.6% and 0.65%, respectively, on hopes of a de-escalation in the China-U.S. trade war.

Cryptocurrencies are undergoing a correction: Bitcoin is down 0.5% to $103,780, and Ethereum is down 0.6% to $2,495.