The US dollar has dropped more than 10 per cent in the first half of 2025, marking its sharpest six-month decline since 1973, and sparking fresh warnings from economists and currency experts about the potential for heightened financial market volatility.Despite a full rebound in US stock markets, with the S&P 500 and Nasdaq recently hitting record highs, the falling dollar and surging long-term treasury yields point to growing investor concerns over the stability of US financial assets. Analysts link the selloff to US President Donald Trump’s unpredictable economic policies and weakening confidence in the federal reserve.“It’s US exceptionalism basically falling by the wayside and the rest of the world playing catch-up,” said Erik Nelson, macro strategist at Wells Fargo, predicting continued dollar depreciation as other global economies catch up, according to AFP.The ICE US dollar index, which measures the greenback against a basket of major currencies, fell 10.7 per cent through June, its worst start to a year in over five decades.The euro has been a major beneficiary, gaining over 13 per cent this year thanks to Germany’s fiscal spending and ECB rate cuts.
Dollar weakness raises red flags
Economists say global investors are rethinking their reliance on the dollar as a safe haven currency. Joseph Brusuelas, chief economist at RSM US, called the current retreat the start of a “multi-year unwinding” of the dollar’s 14-year bull run.Harvard economist Kenneth Rogoff, author of Our Dollar Your Problem, pointed to a growing trend among central banks in China and other nations to diversify away from the dollar, a trend accelerated by Trump’s policies.“I think we’ll see a period of a lot of financial volatility, largely centered around the chaos in the United States,” Rogoff said, citing threats to central bank independence and the rise of populism.
Trump’s actions adds to uncertainty
The Trump administration has added to the volatility with conflicting signals on monetary and trade policy. Trump has publicly attacked fed chair Jerome Powell, demanding interest rates “at least two to three points lower,” and called Powell “a stupid person.”While treasury secretary Scott Bessent denied aiming for a weak dollar, analysts say the trend fits with the administration’s manufacturing and onshoring strategy.“Lower interest rates and a weaker dollar would enable the US to strengthen its economic self-sufficiency and increase onshoring,” reported AFP quoting Jason Schenker of Prestige Economics.In April, Trump reversed new tariffs announced just a week earlier after a surge in Treasury yields caused a stock market dip. He later said he had no plans to remove Powell, walking back earlier threats.So far, US equities remain strong, seemingly unaffected by the dollar’s drop. But some experts warn the situation could shift quickly.
(Bloomberg) — India has temporarily barred Jane Street Group LLC from accessing the local securities market for alleged index manipulation, dealing a severe hit to the US firm that made $4.3 billion in trading gains there in less than two years.
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The Securities and Exchange Board of India said it would seize 48.4 billion rupees ($570 million) from Jane Street, which it claimed is the total amount of “unlawful gains” made by the firm, according to a 105-page interim order by Ananth Narayan, a board member at the regulator, on its website. Jane Street said it disputes the findings.
Jane Street is one of the most active foreign players in India, the world’s largest derivatives market by contracts traded, and one that has become a magnet for high-frequency trading firms amid a retail investing boom sparked by the pandemic. SEBI’s order marks a rare instance of such an action against a foreign entity.
The US-based market maker’s operations in India came under a global spotlight last year after a court battle with Millennium Management revealed it earned $1 billion trading in Indian equity derivatives. Other details disclosed in the case helped trigger SEBI’s investigation, which continued even as the National Stock Exchange of India Ltd. earlier this year closed a separate probe into irregular trades by the firm.
Jane Street made about 365 billion rupees ($4.3 billion) in overall gain from trading in Indian derivatives and cash market during the period between January 2023 and March 2025, according to the SEBI order.
“SEBI is sending a message to global HFT giants that you are welcome to trade here but if you undertake unfair practices then we also hold a stick,” said Tejas Shah, head of derivatives at Equirus Securities Pvt. “I would expect some temporary impact on volumes as other HFTs sit back a little.”
Shares of Nuvama Wealth Management Ltd., Jane Street’s local trading partner, plunged 11% in Mumbai trading, the most in over three months. India’s benchmark NSE Nifty 50 Index was down 0.2% while a broader gauge of Asian equities fell 0.3%.
SEBI alleged that on weekly index options expiry days, Jane Street used a large amount of funds to influence price action in the futures as well as the cash market — where volumes are relatively low. That allowed it “to put on significantly larger and profitable positions in the highly liquid index options market by misleading and enticing a large number of smaller individual traders.”
The regulator had warned Jane Street to avoid such trading practices as early as January this year, according to a person familiar with the matter, who asked not to be identified discussing private information. The investigation found that the trading strategy continued to be used in May, the person said.
Curbs Imposed
Pending detailed investigation, Jane Street Group entities are immediately “restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly,” SEBI said. Banks have been directed to ensure no debits are made without SEBI’s permission in respect of the accounts held individually or jointly by the entities, according to the interim order.
SEBI also said the restrictions can be lifted if Jane Street deposits the said amount in an escrow account at a designated bank in India.
Jane Street disputes the findings of the SEBI interim order and will further engage with the regulator, a representative for the US-based market maker said in a statement. SEBI said the firm can contest the regulator’s “prima facie observations” within 21 days of the receipt of the order.
“This may signal SEBI’s growing vigilance and willingness to assert control over foreign institutional activity making hefty gains in its derivatives market —particularly where such strategies blur the line between smart trading and market distortion,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore.
Derivatives Boom
Global high-frequency trading and market-making firms from Ken Griffin’s Citadel Securities LLC to Optiver have rushed to expand operations in India in recent years as the retail investor-led boom saw options premiums surge 11-fold in the five years to March 2025.
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The retail frenzy has helped foreign funds and local proprietary firms that use algorithms as they pocketed $7 billion in gross profits in the 12 months ended in March 2024, according to a SEBI study. Retail investors, meanwhile, lost an equivalent of $21 billion from trading futures and options in the three years to March 2024., according to the regulator.
To protect them, SEBI has since November imposed several restrictions on trading options including higher minimum investment limits and an increase in lot sizes to protect retail traders. The measures have helped cool trading this year.
The regulator’s action “will also create a level playing field for everyone especially the local players who were losing a lot of money,” said Shah of Equirus.
SEBI also directed Jane Street entities to close out or square off any open positions they may have in exchange-traded derivative contracts within three months from the date of order or at the expiry of such contracts, whichever is earlier.
Jane Street is “committed to operating in compliance with all regulations” in the regions it operates in around the world, the firm said in its statement.
“This is a good move by SEBI, but we need more corrective measures to protect market integrity,” said Deven Choksey, managing director at DRChoksey FinServ Pvt. “Mechanisms like Algos, HFTs are creating inequalities in the markets. Institutions have an edge.”
–With assistance from Lianting Tu, Kurt Schussler, Alex Gabriel Simon, Ashutosh Joshi, Ruchi Bhatia and Russell Ward.
(Updates prices in the seventh paragraph as Nuvama extended losses.)
KARIYA, Japan (July.4, 2025)－DENSO CORPORATION announced that it has acquired Axia Vegetable Seeds, a vegetable seed breeding company headquartered in the Netherlands and focused on developing high-quality tomato seeds for greenhouses globally. The acquisition marks a step forward in DENSO’s strategic expansion into the AgriTech sector.
In recent years, food shortages caused by climate change and population growth have become global challenges, and the companies have recognized the growing need to develop stable agricultural production capable of reliably producing and supplying food to meet demand.
By integrating its industrial technologies developed for automobiles with the specialized cultivation expertise of various partners, DENSO accelerates the development of innovative cultivation methods, such as data-driven cultivation.
Founded in the heart of the Dutch greenhouse industry, Axia Vegetable Seeds develops a wide range of high-performing tomato seeds known for their high disease resistance, good taste, quality and high yield, and distributes them on a global scale .
Moving forward, DENSO and Axia Vegetable Seeds will collaborate to combine industrial technology with seed development to create high-quality seeds suitable for automated farming approaches and climate adaptation. Additionally, by leveraging DENSO’s image recognition and AI technologies, the two companies aim to shorten the development period of new seeds and bring higher value-added seeds to market more quickly.
Through these initiatives, the companies will build cultivation solutions that enable stable and planned production from seed to harvest, meet producers’ diverse needs, help workforces to prioritize high-value work, and aim to achieve sustainable agriculture worldwide.
DENSO CORPORATION Food Value Chain Business Development Division Executive Officer Yasushi Mukai “We are delighted to welcome Axia Vegetable Seeds, with its outstanding development capabilities and know-how in the seed industry, as a member of the DENSO Group. By integrating the technologies and expertise of both the DENSO Group and Axia, we will create new value and realize our vision of providing safe and delicious food anytime, anywhere, and for everyone.”
AXIA VEGETABLE SEEDS CEO & COO Alois van Vliet & Sandor van Vliet “Joining DENSO allows us to accelerate our mission of delivering the best quality tomato seeds globally boosted by exciting opportunities with controlled environment automation and AI technologies. Together with our talented employees and partners, we continue to bring transformative innovations to growers worldwide – making agriculture smarter, more sustainable, and more productive. Our mission is to become the world leader in tomato seeds for the greenhouse industry. We are grateful for our shareholders such as Temasek, Kleiner Perkins, WP Global Partners, and other shareholders.”
From the glow of blue LEDs to the ‘miracle’ of IVF, the Nobel Prize celebrates individuals whose discoveries have changed the world. These six innovations and discoveries not only improve our daily lives, but save them and help create new ones.
At a glance
The discovery of blood groups enabled safe transfusions
IVF helped millions struggling with infertility
The invention of lithium-ion batteries transformed energy storage
Blue LEDs led to long-lasting, eco-friendly white light.
Synthetic indigo dye made affordable denim possible
The CCD sensor sparked the digital photography era
Enabling safe blood transfusions
Close up of A positive blood in bag. Credit: ER Productions Limited/Getty Images
It is likely you know someone who has donated or received blood. However, life-saving blood transfusions were once so unpredictable, that using them risked triggering a potentially fatal reaction.
This risk was reduced once Karl Landsteiner discovered the existence of human blood groups. He tested blood samples to see whether one person’s red blood cells clumped together when mixed with blood serum from another’s. His experiments showed that adverse reactions occurred when a recipient possessed natural antibodies to a donor’s blood cells. In these cases, he found that the red blood cells from the donated blood began to clump, or agglutinate.
In the recipient these agglutinated red cells could clog blood vessels and stop the circulation of the blood to various parts of the body, or crack open, leaking toxic contents out in the body, which could eventually be fatal.
From his research, Landsteiner classified people and their blood into groups.
Today, blood transfusions are routinely used when dealing with trauma or major surgery, ensuring that patients receive blood that matches their own to reduce the risk of life-threatening reactions caused by incompatible blood.
Read more about blood transfusions and Karl Landsteiner
Making affordable denim possible
Credit: RuslanDashinsky via Getty Images
Do you have a favourite pair of jeans? Adolf von Baeyer played a role in putting affordable denim in millions of wardrobes, by helping to make it possible to produce indigo’s distinctive blue colour industrially instead of extracting dye from the indigo plant.
It took almost two decades for Baeyer to progress from the approximate structure of indigo to calculating its precise chemical formula, but within that time he already had enough information to produce the dye synthetically in three ways from different sets of raw materials rich in carbon atoms. In 1897 the first synthetic indigo went on sale, prompting a boom.
It is estimated that more than 4.5 billion pairs of jeans are sold worldwide every year, and most of them are dyed with synthetic indigo.
Inventing a sensor for capturing images electronically
The CCD image sensor is at the heart of a solid state video camera. A flat chip of oxidized silicon covered with a complicated array of metal electrodes is the image sensor at the heart of the solid state video camera built by Bell Lab engineers. Photo: Alcatel-Lucent/Bell Labs
From preserving precious family moments to documenting dinners, we take more photos now than ever before.
Willard Boyle and George Smith were colleagues at the famous Bell Laboratories outside New York, and made it possible to capture images electronically. They sketched an image sensor based on Albert Einstein’s photoelectric effect – in which arrays of photocells would emit electrons in amounts proportional to the intensity of incoming light – during a brain-storming session for a new type of information storage.
The charge-coupled device (CCD) they invented gave rise to an explosion in digital imaging. In addition to being used in digital cameras, CCDs play a crucial role for the scientific world, including in medicine and astronomy. Without CCDs we would not have seen the astonishing images of space taken by the Hubble space telescope.
Creating white light for energy-efficient lamps
The blue LED: an energy- efficient, environmentally-friendly light source Photo: Public domain
Light-emitting diodes (LEDs) illuminate everything from Christmas trees to football stadiums, but long-lasting, energy efficient white LED lamps would not be possible without the work of three laureates.
Isamu Akasaki, Hiroshi Amano and Shuji Nakamura produced bright blue light beams from their semi-conductors in the early 1990s, adding to existing red and green diode technology, to create a fundamental transformation of lighting technology.
LEDs are far more energy-efficient than older light sources, and therefore have much lower environmental impact. They use at least 75% less energy and last around 25 times longer than incandescent bulbs. With 15% of global power consumption and 5% of worldwide greenhouse gas emissions created by electricity for lighting, a global shift to energy efficient bulbs such as LEDs is urgently needed, and could slash these emissions by more than one third.
Enabling a rechargeable world
Credit: shisheng ling via Getty Images
Electric vehicles are considered to be the key technology to decarbonise road transport, which is responsible for one-sixth of emissions. Many electric vehicles rely on lithium-ion batteries, which are also used to power small portable electronic devices like phones, and to store energy from solar and wind power, making a fossil fuel-free society a possibility.
The foundation of the lithium-ion battery was laid during the oil crisis in the 1970s. Stanley Whittingham created a two-volt battery with great potential, but it was too explosive to be viable. John Goodenough refined the materials used to make a breakthrough that would lead to more powerful batteries, helping Akira Yoshino to create the first commercially viable lithium-ion battery in 1985.
Lightweight, hardwearing lithium-ion batteries can be charged hundreds of times without their performance deteriorating, and have revolutionised our lives since they first entered the market in 1991, paving the way for a wireless, fossil fuel-free society.
Developing a treatment for infertility
Credit: Catherine Delahaye via Getty Images
In the 1950s, Robert Edwards came up with the radical idea of helping childless couples to conceive by fertilising the mothers’ eggs outside the body and then replacing them in the womb.
He first demonstrated human in vitro fertilisation (IVF) in 1969, but the fertilised eggs never underwent more than a single cell division. He teamed up with gynaecologist Patrick Steptoe, who worked out how to remove suitable eggs directly from women’s ovaries to overcome this challenge, and the nurse and embryologist Jean Purdy. Together, they also overcame some societal resistance to their research. Their resilience and determination led to the birth of Louise Brown, the world’s first ‘test tube baby’, in 1978.
Worldwide, there are over 500,000 IVF deliveries every year. IVF has become a familiar and, for many, easily-accessible option to turn to when problems are encountered in conceiving a child.
The transaction is unprecedented in its scale, complexity and speed at which it was executed—setting a new benchmark. It is the largest refinancing of its kind to have taken place in the Hong Kong market.
New World Development’s core business areas include property development, property investment, and other strategic operations in Greater China, especially the Greater Bay Area.
The financial institutions supporting the transaction form a significant part of Hong Kong’s real estate finance banking community. A&O Shearman guided the wide range of financiers in the group through a complex structure over a short execution timetable, working closely with New World Development and the company’s counsel.
Partner Roger Lui commented “We are grateful to the bank group for placing their trust and confidence in A&O Shearman in supporting them and New World Development in taking this historic and significant financing to a close.”
“The mandate required us to address, at a senior level, queries from various stakeholders within each financial institution, explain the thesis of the proposed financing structure, as well as the need to process a large volume of documentation. Given the size of the company group and the number of banks involved, this was a complex undertaking. We are proud to have played a part in contributing towards the stability and vibrancy of the Hong Kong markets through this transaction.”
A&O Shearman deployed a host of advanced delivery tools including a global project management team across three time zones, an offsite legal support team, two data sharing platforms, and document automation.
The A&O Shearman team advising the lenders was led by partner Roger Lui, with support from of counsel, Welber Yim, partner Patrick Wong, senior associate Antonia Ma, partner Viola Jing and associate Joshua Chan, as well as partner Agnes Tsang.
The team was further supported by associate Zoe Lau, trainee Chelsea Leung, and wider team members in several locations, including Peerpoint conveyancing specialists Kylie Wong and Karen So. Partner Yvonne Ho, senior associate Tianyi Xu, and associate Peggy Zeng advised existing lenders. Partner Cindy Lo and senior associate Adrian Chiang advised a group of agents.
An exhibition room at Pop Mart’s theme park, Pop Land, in Beijing, on June 18, 2025.
Pedro Pardo | Afp | Getty Images
Beijing may have warned against “blind box” toys, but analysts are betting that Pop Mart International — the company behind Labubu dolls — will remain one of China’s hottest consumer brands this year.
In an editorial on June 20, China’s state media People’s Daily called for tighter regulations around selling blind-boxed toys and trading cards to children under the age of eight, such as verifying buyers’ age upon payment and requiring parental approval in online transactions.
Without naming Beijing-headquartered Pop Mart, the paper slammed businesses for enticing young children to spend heavily on “blind cards” and “mystery boxes” — a model central to Pop Mart’s appeal. The company often sells its dolls in a blind box to buyers who don’t know what character is inside until they open it.
Sequentially, Pop Mart’s share price plunged 12.1% for the week ending June 20, marking its steepest fall since late 2023, denting a massive rally that sent its shares over 600% higher over the last 12 months.
Its stock has regained some ground since then, hovering near the all-time high levels hit in mid-June.
The state media commentary on blind-box toys is reminiscent of Beijing’s regulations on video games in recent years, which were aimed at curbing gaming addiction and unsupervised in-game purchases by minors.
That led to restrictions on how long minors can play video games, as part of a sector-wide crackdown that wiped out billions of dollars in value from China’s gaming giants.
A boy playing a video game with a headset during the 2019 NetEase Future Conference at Hangzhou International Expo Center on Nov. 23, 2019, in Hangzhou, China.
Visual China Group | Getty Images
“The magnitude of Chinese policymakers’ impact [on businesses] is way higher than that in other countries,” said Alfredo Montufar-Helu, senior advisor for the China Center at The Conference Board, a think tank.
That said, analysts view the fears of regulatory headwinds as overblown as Gen Zers and millennials, rather than young children, are Pop Mart’s main consumer demographic.
Pop Mart will largely be insulated from intensifying regulatory scrutiny as it targets younger adults with adequate purchasing power, Montufar-Helu said.
Local peers that focus on minors, however, will likely be “heavily impacted,” said Jeff Zhang, equity analyst at Morningstar.
There’s another factor that could cushion the regulatory impact on Pop Mart. It’s increasingly driven by overseas sales, especially in Southeast Asia, Zhang said. And the share of its China revenue will fall to about 30% in the next 10 years, he projected. Pop Mart’s overseas sales in 2024 have already surpassed the company’s overall sales in 2021.
Pop Mart derived about 61% of its revenue from mainland China in 2024, according to its annual report, drawing the rest mainly from Southeast Asia and East Asia, as well as Hong Kong, Macau and Taiwan.
Its sales in North America grew more than 550% last year from a year earlier, and the company has 90 physical stores and vending machine spots across the United States.
HSBC Bank expects Pop Mart’s overseas revenue in 2025 to more than double to 14 billion yuan ($1.95 billion) from 2024 on strong sales momentum from “Labubu 3.0,” released in April. This figure would account for more than half of its entire projected revenue this year, up from 39% in 2024.
That just builds on the meteoric growth that the company enjoyed last year, when revenue more than doubled to 13.04 billion yuan, while profits nearly tripled.
Dopamine economy
The rapidly growing popularity of the ugly-cute toys contrasts with otherwise sluggish consumption in the country, as many become increasingly frugal in the face of an economic slowdown.
Younger Chinese consumers want to build toy collections for the sense of “affordable exclusivity” it gives them, said Montufar-Helu, as it can be satisfying to be “one of the lucky ones to get the special edition” at a reasonable price.
Pop Mart sells blind-boxed toys with prices ranging from about 59 yuan to 5,999 yuan. Collectors often spend hundreds or thousands of yuan, and rare models can fetch six-figure sums at secondThe state media commentary on blind-box toys is reminiscent of Beijing’s regulations on video games a few years ago,hand auctions.
Diana Lagaret (left) and Sahar Kutlu show off some of the Labubu items for sale at The Labu’Tique Shop in Anaheim on June 25, 2025.
Medianews Group | Getty Images
“The very point about blind boxes is the unknown, the uncertainty. There is some inherent curiosity about what someone’s gonna get. That brings about a certain degree of excitement when people are buying blind boxes,” said Chris Wong, senior clinical psychologist at Singapore-based Resilienz Clinic.
“When that uncertainty is resolved,” he said, referring to when the blind box is opened, “[that] usually comes with certain pleasant emotions, like fun, surprise and delight. That also plays a part in why people just keep on doing that.”
Seeing others share their own experiences of blind boxes on social media also amplifies such a response from the brain, as it fulfils the human need for social connection, the psychologist said.
Scalpers, counterfeits, production delays
But although the Labubu frenzy shows no sign of slowing, Pop Mart still faces other challenges that may dent its momentum, analysts said.
“While Pop Mart’s major IPs, such as Labubu” have “received some global popularity over the past two years … there is no guarantee that what is popular now will stay relevant over the next five to ten years,” Zhang said.
Other risks include uncertainty around the company’s ability to meet shifting demand and scalping, which could drive genuine consumers out of the market, HSBC analysts said.
Pop Mart issued a rare apology last month after a surge in orders caused delivery delays, with consumers complaining online about not having receiving orders weeks after placing them.
Counterfeit toys may also dampen Pop Mart’s reputation at home and abroad, analysts said, despite the government’s efforts in stepping up scrutiny at export checkpoints.
Customs at the Ningbo port, one of the country’s busiest ports, seized over a million counterfeit Labubu dolls in the first six months of this year, over intellectual property violations and smuggling concerns.
This picture taken on June 18, 2025 shows the character Labubu taking part in a performance at the Pop Mart’s theme park Pop Land in Beijing.
Pedro Pardo | Afp | Getty Images
To keep its brand fresh, Pop Mart has taken a page from Disney’s playbook, doubling down on expanding its IP portfolio, launching pop-up stores, a film studio and a theme park.
Pop Mart’s founder Wang Ning once hinted at his aspiration to turn the company into “China’s Disney.”
But those initiatives don’t come cheap.
“Animation production requires a strong storytelling team that can consistently deliver compelling narratives,” said Echo Gong, an independent Shanghai-based retail consumption consultant. She added that managing a theme park also demands an entirely different skillset and far greater investment than simply selling toys.
European stock markets have been on a tear in 2025, with the Stoxx Europe 600 index climbing roughly 7% in the year to date and investors rotating into the region to seek refuge from the political and valuation anxieties of the U.S. markets. But some analysts warn that this rally is built on a fragile and potentially risky assumption: that the escalating global trade war is temporary and will pass without inflicting lasting damage. Investment strategists highlight that beneath the surface of the market’s optimism, the data tells a more grounded story. .STOXX YTD mountain They point to the Federal Reserve’s forecast that the U.S. GDP will grow by 1.4% this year , down from the 1.7% previously forecast in March, before the announcement of U.S. President Donald Trump’s new tariff regime. The growth slowdown in the U.S. — the central driver of the global economy — is expected to wash up on European shores soon. Yet, equity markets are running on hopes of central bank easing and a belief that political leaders will swerve at the last moment, appearing to ignore the risk of a significant economic downturn, according to Bank of America. “Markets are effectively pricing right now for global growth momentum to be completely unaffected by the tariffs,” BofA’s Head of European Equity Strategy Sebastian Raedler told CNBC on Thursday. “That’s not the situation that we’re in.” Raedler also highlighted that companies were paying $190 billion more in tariffs on an annualized basis in May compared to late last year, equivalent to 7% of corporate profits in the first quarter. “Corporations have not passed [the tariffs] on to consumers,” he added. Which means, as companies absorb the price increase, they will experience a significant profit margin squeeze. “If you look at margin expectations, they’re at all-time highs. So the market has not yet taken this seriously.” Bank of America’s Raedler has long been bearish on European equities despite multiple years of gains. He says the Stoxx Europe 600 index will decline to 490 over the next 12 months, equivalent to a 11% downside from current levels. More neutral than outright bearish, JPMorgan strategists have also advised caution, suggesting the “eurozone likely consolidates for some time longer” as it digests ongoing trade negotiations. The Wall Street bank says the Stoxx Europe 600 will hit 540 — about where it is currently trading — in 12 months, after paring gains from a minor rally to 580 by the end of this year. Their analysis is centered around the economic drag created by tariffs. The U.S., a critical market for European exports, had not yet felt the impact of the duties, as companies were still working through the goods that had rushed into the country ahead of Trump’s announcement. “There was a very strong frontloading of orders ahead of the tariffs, and companies might be still working through this older inventory, which was acquired at lower prices,” said Mislav Matejka, JPMorgan’s head of global and European equity strategy in a note to clients, adding that “as the frontloading effects wane, the tariff impact might start to be felt”. Despite these clear headwinds, markets remain optimistic, fueled by two main narratives. The first is the belief that the tariffs are merely a negotiating tactic and will be rolled back. The second — and perhaps more powerful — driver is the prospect of central banks easing their monetary policy. Markets are “spurring discussions around renewed Fed easing,” a notion that encourages investors to “look through” any short-term economic weakness, according to Bank of America. Barclays, in a July 2 note to clients, echoed this view, pointing to the “dovish” central bank narrative as a key factor that has pushed global equities higher. In addition, unlike the Wall Street banks, the U.K.-headquartered investment bank says the risk of further tariffs has already peaked. “Tariffs shock is expected to hit employment and capex in [second half], but de-escalation means worst-case recession scenario should be avoided,” said Emmanuel Cau, Head of European Equity Strategy at Barclays. “Meanwhile, tax cuts should support US growth down the road, while the Fed is expected to ramp up rate cuts, although we find current market pricing potentially too dovish.” Barclays’ Cau is expecting the Stoxx Europe Index to rise by 5% to 570 by the end of the year. The reality of the tariff situation, however, could be more complex. Equity analysts at TD Cowen had previously cited German footwear multinational Adidas’s management as confident in delivering their full-year results under a 10% tariff scenario. They now expect earnings guidance to be lowered following the U.S.-Vietnam deal , where tariffs have been set at 20%. “Our take is that the 20% tariff on Vietnam goods will remain on top of the duties already placed on footwear and apparel,” said TD Cowen’s John Kernan in a note to clients on July 3. “We expect the rest of [Southeast Asia] tariff rates to be at 20% or higher.” The impact is unlikely to be limited to just one company. Vietnam exports a third of all North American footwear and 15% of American apparel, according to TD Cowen.
MANILA, Philippines — Asian shares were mixed on Friday after U.S. stocks climbed further into record heights as the clock ticks on President Donald Trump’s July 9 tariff deadline.
Japan’s Nikkei 225 fell 0.6% to 39,762.20 after earlier gains, while South Korea’s KOSPI index was down 1.2% to 3,078.31.
Hong Kong’s Hang Seng index lost 0.6% to 23,914.44 while the Shanghai Composite index added 0.4% to 3,475.24. Australia’s S&P/ASX 200 rose 0.1% to 8,609.50. India’s Sensex index was up 0.1% to 83,288.73.
“Asian markets slipped into Friday like someone entering a dark alley with one eye over their shoulder — because while US equities danced higher on a sweet spotted post-payroll sugar rush, the mood in Asia was far less celebratory. The reason? That familiar, twitchy unease every time Trump gets near the tariff trigger,” Stephen Innes, managing partner at SPI Asset Management, wrote in a commentary.
On Thursday, after a report showed a U.S. job market stronger than Wall Street expected, the S&P 500 rose 0.8% and set an all-time high for the fourth time in five days. The Dow Jones Industrial Average added 344 points, or 0.8%, and the Nasdaq composite gained 1%.
Many of Trump’s stiff proposed taxes on imports are currently on pause, but they’re scheduled to kick in next week unless Trump reaches deals with other countries to lower them.
In other dealings on Friday, U.S. benchmark crude was down 19 cents to $68.81 per barrel. Brent crude, the international standard, shed 30 cents to $68.50 per barrel.
The U.S. dollar slid to 144.48 Japanese yen from 144.92 yen. The euro edged higher to $1.1771 from $1.1761.
