Morning wrap (25.08.2025)

Wall Street ended last week with a strong rebound (S&P 500: +1.5%, Nasdaq: +1.9%, DJIA: +1.9%, Russell: +3.86%) in response to dovish remarks by Fed Chair Jerome Powell, who, citing greater risks to the labor market, opened the door to a potential rate cut in September. Currently, U.S. index futures are trading slightly lower (US500: -0.05%), while the EU50 is down 0.2%.

In the Asia-Pacific region, prospects of U.S. rate cuts are fueling broad optimism. The MSCI Asia Pacific Index is up more than 1.1%, driven mainly by gains in China (HSCEI: +1.8%, Hang Seng: +1.7%). Japan’s Nikkei 225 (+0.3%), Shanghai SE Composite (+0.72%), South Korea’s Kospi (+1%), and India’s Nifty 50 (+0.3%) are also in the green. Australia’s S&P/ASX 200 is trading flat.

China may potentially engage in government-funded renovation projects to support its still-struggling real estate market, according to Securities Daily citing industry experts. Chinese developers are seeing strong rallies (e.g., Vanke: +15%).

Retail sales in New Zealand unexpectedly rose in Q2 2025 (+0.5%, forecast -0.3%, previous +0.8%). The biggest gain was seen in electronics (+4.6% q/q), while the sharpest decline was in pharmaceuticals and “other” (-1.2% q/q).

On the forex market: the dollar index is slightly rebounding after Friday’s Powell-induced selloff (USDIDX: +0.15%). Safe-haven currencies are correcting the most, namely the Japanese yen (USDJPY: +0.25%) and the Swiss franc (USDCHF: +0.2%). EURUSD is down 0.14%, holding at 1.17. The biggest resistance to the dollar is coming from Antipodean currencies (AUDUSD: +0.05%, NZDUSD: +0.03%), which are gaining on risk appetite.

Precious metals are also pulling back: gold is down 0.2% to $3,364, silver -0.15% to $38.82, palladium -0.3%, with platinum being the exception, up 0.2%.

Energy commodities are also in decline: NATGAS is down 1.8%, while Brent and WTI crude are both lower (about -0.2%) despite Donald Trump’s threats that “massive sanctions” would be imposed on Russia if no war agreement can be reached within about two weeks.

Cryptocurrencies are extending losses after a volatile Sunday trading. Bitcoin is down 0.25% to $112,500, Ethereum -1.35% to $4,722, with contracts for Dogecoin (-2.2%), Sushi (-1.9%), and Chainlink (-0.4%) also in the red.