Asian Markets Hold Steady Amid Global Bond Jitters and US-EU Trade Hopes
Asian stock markets showed little movement on Wednesday, as investors remained cautious despite positive signs emerging in global trade talks and ahead of tech giant Nvidia's earnings. This follows a mixed session in Asia last week, where Hong Kong's Hang Seng ticked slightly higher, but Chinese blue chips slipped as concerns about the stock market weighed on risk-taking.
The focus is now shifting to tax signals from major economies and what they might mean for markets in Asia.
MSCI's broadest index of Asia-Pacific shares outside Japan barely budged, while Japan's Nikkei eased 0.04% after three straight days of gains. China's CSI300 slumped 0.1%, and Hong Kong's Hang Seng weakened 0.6%, pointing to rising anxiety over overseas bond yields and lingering trade tensions. Market observers in Asia are looking for signals from the U.S. and Europe for clues about what comes next.
Comments from U.S. President Donald Trump soothed nerves. He commended the European Union for being willing to sit down for talks, and he stepped back from an earlier threat to slap a 50% tariff on imports from the EU. Analysts say that this muted stance is providing some relief for investors, even if the uncertainty is still ahead.
George Lagarias, chief economist of auditing and advisory firm Forvis Mazars, said an agreement may be reached between the U.S. and EU because the two trading partners have vast trade in goods.
European markets benefited from a similar burst of optimism. Germany's DAX added 0.3% to its record, led by defense shares. Britain's FTSE and France's CAC 40 rose 0.2 percent. The broader STOXX 600 rose 0.1 percent, as market climbing has been consistent across Europe.
U.S. investors are waiting for Nvidia's earnings report. Nvidia, one of the "Magnificent 7" tech firms, may set the tone for tech stocks more broadly. Analysts are upbeat about the performance, forecasting that revenue will have surged more than 66% to $43.28 billion. Should those expectations be met, it could touch off a market rally.
Yet there are fears over global debt that are darkening the outlook. Yields on bonds rose again, and Japan's 40-year bonds met tepid demand. That lifted the yield 9 basis points to 3.375%. U.S. long-dated bonds also saw some action, with 30-year yields rising to almost 4.98% and 10-year yields rising to 4.47%.
Rising bond yields have raised fresh concerns about the financial health of major economies like the U.S., Japan, and the U.K. Market confidence has also taken a hit after Moody's lowered its outlook on U.S. credit. At the same time, debates continue over new tax laws. "We're seeing whether the U.S. can solve its budget problems by borrowing more than any country ever has," said Lagarias. He warned that if borrowing goes too far, it could have lasting effects on global markets.
The dollar was stable in currency markets, following a 0.6% increase earlier. The euro was unchanged, at $1.1329. The Reserve Bank of New Zealand cut its rates 25 basis points, driving the kiwi dollar 0.3% higher to $0.5969.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
33 minutes ago
- CNA
Shein working towards Hong Kong listing after London IPO stalls: Sources
HONG KONG: Shein is working towards a listing in Hong Kong after the online fast-fashion retailer's proposed initial public offering (IPO) in London failed to secure the green light from Chinese regulators, said three sources with knowledge of the matter. The China-founded company aims to file a draft prospectus with Hong Kong's stock exchange in the coming weeks, one of the sources said. Shein plans to go public in the Asian financial hub within the year, two of the sources said. Shein plans to change the listing venue as it has not yet received approval for its London IPO from Chinese regulators, notably the China Securities Regulatory Commission (CSRC), the two sources said. The company, which sells products including US$5 bike shorts and US$18 sundresses, in March secured approval from Britain's Financial Conduct Authority (FCA) for its IPO in London, and soon informed the CSRC, one of the sources said. The company initially expected the green light from Chinese regulators to follow swiftly after the FCA but has since experienced an unexpected delay and limited communication from the CSRC, said the source. Details about Shein's Hong Kong listing plan have not been reported previously. All the sources spoke to Reuters on the condition of anonymity as they were not authorised to speak to the media. Shein and CSRC did not immediately respond to Reuters' request for comment. A spokesperson for Hong Kong Exchanges and Clearing Ltd (HKEX) declined to comment on individual companies. Before its attempt to list in London, Shein had pursued a listing in New York, as part of its efforts to gain legitimacy as a global, rather than a Chinese company, and access to a wide pool of large Western investors. A listing in Hong Kong would go against that strategy and could hurt its global credentials. Allegations that Shein's products contain cotton from China's Xinjiang region and a planned legal challenge to the London IPO by a non-governmental organisation campaigning against forced labour in China have complicated the London listing and risk embarrassment for the Chinese government, a separate source with direct knowledge of the matter said. Tensions with the US over trade only exacerbate the wariness of Beijing and the CSRC, the source said. The US and non-governmental organisations accuse China of human rights abuses in the Xinjiang Uyghur Autonomous Region, where they say Uyghur people are forced to work producing cotton and other goods. Beijing has denied any abuses. Shein, founded by China-born entrepreneur Sky Xu, says it has a zero tolerance policy for forced labour and child labour in its supply chain. The company moved its headquarters from Nanjing, China, to Singapore in 2022. As it awaited a response from the CSRC, Shein earlier this month dropped the communications firms Brunswick and FGS it had hired to help with public relations ahead of the London listing. "MORE TO DO WITH CHINA THAN LONDON" Reuters could not determine if Shein had sought or received a nod from the CSRC for the Hong Kong listing. The company had sought Chinese regulatory approval to go ahead with processes to list in New York and later in London. Shein's filings with the CSRC make it subject to Beijing's listing rules for Chinese firms going public offshore, two sources have said. The rules are applied on "a substance over form" basis, giving the CSRC discretion on when and how to implement them, the sources added. Shein does not own or operate any factories, instead sourcing its products from 7,000 third-party suppliers in China as well as some factories in other countries like Brazil and Türkiye. The company had aimed to go public in London in the first half of this year. "Shein's listing would have been a boost to the market," said Alasdair Steele, corporate partner with law firm CMS. "However, there was never any guarantee that a single large listing would reignite the IPO market." "The Shein news is much more to do with China than London," said Lisa Gordon, chair of investment bank Cavendish and a member of the Capital Markets Industry Taskforce (CMIT) - a group dedicated to the revival of Britain's markets. "The London market is in a very good position." This is not the United Kingdom capital's first major IPO loss this year. In February, Unilever said it had chosen Amsterdam for the main listing of its ice cream business. That follows a string of London-listed companies moving, such as online betting company Flutter. Others, such as Shell, are considering leaving as well. BUSINESS MODEL DISRUPTION Shein's business model of sending products straight from factories to shoppers around the world was disrupted by the Trump administration ending duty-free access and slapping steep tariffs on e-commerce packages from China. The "de minimis" exemption allowed e-commerce packages from China worth less than US$800 to enter the US duty-free and helped Shein, Temu and Amazon Haul sell clothes, gadgets and accessories extremely cheaply. Now, those parcels are subject to a minimum tariff of 30 per cent. Regardless of where Shein lists, its eventual IPO valuation will hinge on the impact of the removal of the de minimis exemption, the sources have said. The US exemption is still in place for goods that are not from China or Hong Kong. The European Union has also proposed changes to its duty exemption on parcels under €150, adding to pressure on the business model. Reuters reported in February that Shein was set to cut its valuation in a potential London listing to around US$50 billion, nearly a quarter less than the US$66 billion valuation it had achieved in a US$2 billion private fundraising in 2023. A revival in Hong Kong's capital market, with sizable recent listings including Chinese electric vehicle battery giant CATL's US$5.3 billion float, the world's largest listing this year, augurs well for a potential Shein IPO in the city. Companies have raised US$9.7 billion in Hong Kong through IPOs and second listings so far in 2025, compared to US$1.05 billion at the same time last year, according to LSEG data.
CNA
33 minutes ago
- CNA
Asian markets reverse as appeals court gives Trump tariffs reprieve
HONG KONG: Asian shares fell Friday (May 30) after a US appeal court gave Donald Trump's sweeping tariffs a temporary reprieve, fanning uncertainty a day after judges had ruled the controversial measures were unconstitutional. The losses reversed a rally across world markets the previous day as analysts warned that the legal wrangling could compound volatility and throw trade talks between Washington and other governments. While the tariffs have been stalled and are set to go through the courts - and possibly end up at the Supreme Court - there are expectations that the US president will find other means to implement them. The US Court of International Trade's ruling on Wednesday barred most of the tariffs announced since Trump took office, ruling that he had overstepped his authority - a decision he labelled "horrible" and should be "quickly and decisively" reversed for good. "Backroom 'hustlers' must not be allowed to destroy our Nation!" he wrote on his Truth Social platform. A separate ruling by a federal district judge in Washington, DC also found some levies unlawful as well, giving the administration 14 days to appeal. Observers said the latest developments have led to speculation about trade negotiations, including those between the United States and European Union, and a deal it has already struck with Britain. But Kevin Hassett, director of the National Economic Council, told Fox Business that "hiccups" sparked by the decisions of "activist judges" would not affect negotiations and that three agreements were close to finalisation. National Australia Bank's Rodrigo Catril said after the appeal court decision that "Trump's trade agenda remains alive and kicking with the legal battle adding yet another layer of uncertainty". He added that the judges could still rule against the White House. "But it is probably worth emphasising that the president has other avenues to impose tariffs, so our view here is that the court case is just another layer of uncertainty/complication but it does not derail Trump's tariff agenda," Catril said. "The ongoing shift in US trade policy is creating a cloud of uncertainty and now the legal battles are making the outlook even cloudier. "The only thing that looks more certain is more uncertainty, which is set to lead to a further pullback in investment decision and hiring." Meanwhile, US Treasury Secretary Scott Bessent told Fox News on Thursday that negotiations with China were "a bit stalled" and Trump might need to speak to President Xi Jinping, weeks after the economic superpowers agreed a detente in their trade war. He added that "given the magnitude of the talks, given the complexity, that this is going to require both leaders to weigh in with each other". Hong Kong and Tokyo were off more than one per cent each, while Shanghai, Sydney and Seoul also sank into the red, though Wellington and Manila edged up. The weak performance followed a tepid day on Wall Street, where all three main indexes ended just slightly higher, with sentiment also dented by data showing the US economy contracted in January to March, albeit at a slower pace than first thought. Disappointing readings on jobless benefits and pending home sales added to the more downbeat mood, with investors also on edge over elevated bond yields and Trump's plans to ramp up the budget deficit. On currency markets, the yen strengthened after figures showed inflation in Tokyo - a barometer for the rest of Japan - came in above forecasts this month, ramping up expectations the country's central bank will hike interest rates in July.
Straits Times
41 minutes ago
- Straits Times
China sets up international mediation body in Hong Kong
The International Organisation for Mediation headquarters, a China-initiated body, is seen under construction for global dispute resolution, in Hong Kong, China, on 29 May. PHOTO: REUTERS HONG KONG - Chinese Foreign Minister Wang Yi signed a convention setting up an international organisation for mediation in Hong Kong on May 30 that Beijing hopes will be on par with the International Court of Justice and bolster the financial hub's international credentials. The inauguration comes amid growing geopolitical tensions which have been exacerbated by US President Donald Trump's global trade war and fuelled risks of a sharp worldwide economic downturn. Escalating trade tensions between China and the US have been a focal point for investors and markets in recent months, with the trade war leading to significant impacts on global commerce and supply chains. The mediation body aims to cement Hong Kong's presence as a top centre to resolve disputes between countries, leader John Lee said earlier this week, adding that it's status would be on par with the International Court of Justice and the Permanent Court of Arbitration of the United Nations in The Hague. It would help bring 'substantial' economic benefits and job opportunities and stimulate various sectors including hospitality and transport, Mr Lee said. Indonesia, Pakistan, Laos, Cambodia and Serbia are among the countries attending the ceremony. Representatives from 20 international bodies including the United Nations were also expected to join, public broadcaster RTHK said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
