Morning wrap (14.05.2025)

Stock markets across the Asia-Pacific region are experiencing a mixed session. Japan, Singapore, and Australia are posting modest losses, while Chinese indices are gaining on improved U.S.–China relations. Gains range between 1.10% and 1.50%.

President Trump stated that relations with China are “excellent” and expressed readiness to work with Xi Jinping on a new agreement. He added that the U.S. is trying to regain access to the Chinese market. These comments came amid ongoing trade uncertainty. No concrete progress or new deals were announced.

Trump also reiterated his support for Iran but emphasized he will not allow it to become a nuclear power. The statement, made in a Fox interview, aligns with his previous hardline stance. No policy changes were signaled.

Trump’s economic advisor, Kevin Hassett, said that more than 25 trade agreements are currently in development. He indicated that one of the deals will be announced upon Trump’s return. The comment remained vague.

As in 2016, Trump is reportedly viewing stock market returns as a real-time barometer of political success. With the S&P 500 returning to positive territory in 2025, recession fears appear to be easing.

Japan’s Producer Price Index for April came in at +0.2% m/m and +4.0% y/y, in line with forecasts. A stronger yen helped curb import-driven inflation, though food and energy prices remain high.

The People’s Bank of China set the yuan’s midpoint at 7.1956 per USD – its highest since April 3. The move signals that Beijing is seeking to support its currency to stabilize broader market sentiment in the region.

Australian wages rose by 0.9% q/q in Q1, slightly above the 0.8% consensus and in line with RBA projections. The data is unlikely to shift expectations of a rate cut during the May 19–20 meeting, as the central bank remains focused on broader economic risks. AUD reaction was muted.

According to reports, a China-linked firm purchased $300 million worth of TRUMP Coin tokens. The news coincided with Trump’s remarks but had no impact on major assets.