US President Trump announced 100% tariffs on Pharmaceuticals, 50% tariffs on all Kitchen Cabinets, Bathroom Vanities, and associated products, a 30% tariff on Upholstered Furniture, and a 25% tariff will be imposed on all “Heavy Trucks” made in other parts of the world.
US President Trump signed an executive order on TikTok, saying he had good talks with Chinese President Xi and that China is fully on board.
EU plans to impose tariffs of 25–50% on Chinese steel and related products, according to Reuters, citing Handelsblatt.
APAC stocks traded mostly lower after being subdued for a bulk of the session following a similar performance stateside.
European equity futures are indicative of a slightly firmer cash open with the Euro Stoxx 50 future +0.4% after cash closed -0.3% on Thursday.
Looking ahead, highlights include US PCE (Aug), US University of Michigan Final (Sep), ECB’s Cipollone, Lagarde, Fed’s Barkin, Bowman, and supply from Italy.
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US TRADE
EQUITIES
US stocks finished lower after hotter-than-expected Q2 data fuelled concerns about the Fed’s scope to cut rates in the current environment.
Equity sectors were broadly weaker outside of Energy, with Health, Consumer Discretionary, and Materials leading the declines, while Energy outperformed on rotation flows.
SPX -0.50% at 6,605, NDX -0.43% at 24,397, DJI -0.38% at 45,947, RUT -0.98% at 2,411
Click here for a detailed summary.
TRADE/TARIFFS
FRESH TARIFFS
US President Trump said that as of October 1st, 2025, a 25% tariff will be imposed on all “Heavy Trucks” made in other parts of the world, according to Truth Social.
US President Trump said that as of October 1st, 2025, the US will impose a 50% tariff on all kitchen cabinets, bathroom vanities, and associated products, and a 30% tariff on upholstered furniture, according to Truth Social.
US President Trump said that as of October 1st, 2025, the US will impose a 100% tariff on any branded or patented pharmaceutical product unless the company is building its pharmaceutical manufacturing plant in America, according to Truth Social.
The Trump administration is reportedly weighing a new plan to dramatically reduce the US’ reliance on semiconductors made overseas, according to WSJ sources. Companies that do not maintain a 1:1 ratio over time would have to pay a tariff, sources said.
US-CHINA
US President Trump signed an executive order on TikTok, saying he had good talks with Chinese President Xi and that China is fully on board. He noted that American investors will take over the platform, with TikTok investors to include Ellison, Michael Dell, and Rupert Murdoch. Trump said he is satisfied with security concerns, praised Xi’s approval, and highlighted that Oracle (ORCL) is playing a very big part, according to Reuters.
US Vice President Vance said TikTok will be valued at around USD 14bln, adding that Americans will control the algorithm and that he wants it to be fair, according to Reuters.
In a sign of the fragile engagement, people close to the White House said Trump has not committed to going to Beijing, with a firm date for the visit contingent on China’s continued cooperation on issues ranging from trade to fentanyl, according to WSJ.
US Deputy Secretary of State confirmed a meeting with her Chinese counterpart took place on Thursday evening, according to Reuters.
OTHERS
EU plans to impose tariffs of 25–50% on Chinese steel and related products, according to Reuters citing Handelsblatt.
US President Trump said he will take tariff money and give it to US farmers, adding that farmer aid will be distributed until tariffs begin to benefit them, according to Reuters.
US Agriculture Secretary Rollins said the DoJ antitrust division will look at high fertiliser and seed costs, adding that the USDA is developing a plan to revitalise the beef industry but will not offer payments to producers, according to Reuters.
Japanese Finance Minister Kato announced the establishment of a facility at JBIC for the Japan and US-bound USD 550bln investment package, according to Reuters.
Japan’s Tariff Negotiator Akazawa said Japan and the US agreed that US semiconductor and pharmaceutical tariffs on Japan will not exceed those applied to other countries, adding that both sides will continue to evaluate how the new tariffs relate to the existing US-Japan agreement, according to Reuters.
NOTABLE US HEADLINES
Fed’s Goolsbee (2025 voter) said frontloading rate cuts before it is clear inflation will not be persistent runs the risk of a mistake, noting that the labour market is largely stable with some mild cooling and that the pace of rate cuts will largely be determined by the behaviour of inflation. He said he remains concerned about inflation and wants to be vigilant, adding that Fed policy has been mildly and moderately restrictive, according to Reuters.
Fed’s Logan (2026 voter) said the Fed should move to target the tri-party general collateral rate and that the time has arrived to modernise the interest rate target system. She noted the Fed funds market still works but is increasingly fragile, and that the shift to secured markets means the Fed needs to update its rate target system, according to Reuters.
Fed’s Daly (2027 voter) said the inflation impact of tariffs has not been as large as forecast but has weighed more heavily on the labour market. Noted that rates remain modestly restrictive, a little more rate cutting will be needed over time, but warned against going all the way to neutral as it would be too risky, the US economy is in okay shape, and bringing Fed interest rates down toward the neutral 3% level will not solve the housing affordability crisis. Emphasized the need to monitor both inflation and labour market weakness, pointing to difficulties faced by new college graduates in getting hired, low job-finding rates, and the length of time it takes to find a job as yellow flags for the job market, according to Reuters.
Fed Governor Cook filed a response at the US Supreme Court to US President Trump’s bid to fire her.
Citadel CEO Ken Griffin said the US economy is doing well and that he thinks the Fed will cut once more this year, twice at most, according to CNBC.
Goldman Sachs President said consumer spending remains healthy, though there is some stress in the lower-income bracket, according to Reuters.
US President Trump called on the Fed to lower rates again, saying the US is the only country where strong numbers are reported and stocks still go down.
US President Trump said there could be a government shutdown.
NOTABLE US EQUITY NEWS
Meta (META) is reportedly set to face a charge sheet from the EU for failing to adequately police illegal content, risking fines for violating the bloc’s content moderation rulebook, according to Bloomberg.
Oracle (ORCL), Silver Lake, and MGX will be the main investors in TikTok US with a combined 45% ownership, according to CNBC’s Faber, citing sources.
Intel (INTC) has approached TSMC (TSM) about investments or manufacturing partnerships, WSJ reports.
Meta (META) is reportedly in talks with Alphabet’s Google (GOOGL) to integrate Gemini for enhanced ad-targeting capabilities, according to The Information.
APAC TRADE
EQUITIES
APAC stocks traded mostly lower after being subdued for a bulk of the session following a similar performance stateside after hot US data, with traders now looking ahead to the Fed’s preferred gauge of inflation. Sentiment in the region was hampered by US President Trump announcing tariffs of 100% on pharmaceuticals, 50% on kitchen cabinets, bathroom vanities and associated products, 30% on upholstered furniture, and 25% on all heavy trucks made outside the US.
ASX 200 eventually eked out mild gains, but the healthcare sector was the biggest laggard after Trump’s 100% tariff announcement on pharmaceuticals. Tech also weakened, though losses were cushioned by outperformance in metals and mining.
Nikkei 225 was modestly softer but held above the 45,500 level after briefly dipping below, with pharma stocks weighing following Trump’s tariff announcement, and with little follow-through from softer-than-expected but prior-matching Tokyo CPI data.
Hang Seng and Shanghai Comp largely conformed to regional losses, with little follow-through from Trump signing the executive order on TikTok, in which he also noted he had good talks with Chinese President Xi, although the Mainland later oscillated on either side of the unchanged mark.
KOSPI was the regional laggard, heavily pressured by the tech sector and pharma, whilst reports also suggested South Korea fired warning shots at a North Korean commercial vessel for crossing the maritime border, according to Yonhap.
Nifty 50 was also subdued with the nation’s pharma stocks pressured after President Trump’s tariff announcement.
US equity futures traded flat to mixed, with upside capped by Trump’s latest tariff announcements, while traders looked ahead to the PCE data. As a reminder, on Tuesday, Fed Chair Powell said total PCE prices are seen rising 2.7% Y/Y (vs. 2.6% in July); Core PCE is expected to have increased 2.9% Y/Y, driven by goods price rises mainly reflecting tariffs.
European equity futures are indicative of a slightly firmer cash open with the Euro Stoxx 50 future +0.4% after cash closed -0.3% on Thursday.
FX
DXY took a breather before tilting lower after another session of strong gains on Thursday following hot US data, with traders now bracing for the Fed’s preferred inflation gauge. As a reminder, Fed Chair Powell said total PCE prices are seen rising 2.7% Y/Y (vs. 2.6% in July); Core PCE is expected to have increased 2.9% Y/Y, driven by goods price rises mainly reflecting tariffs.
EUR/USD moved in tandem with the dollar after being dragged lower before finding support just under 1.1650 on Thursday, with the pair eventually testing its 50DMA at 1.1679 to the upside.
GBP/USD traded sideways amid quiet newsflow with resistance around the 1.3350 mark after retreating from yesterday’s peak above 1.3450.
USD/JPY saw relatively uneventful trade after nearly surging to 150.00 yesterday, with only modest and fleeting JPY weakness after softer-than-expected Tokyo CPI, though the pricing tilted slightly more hawkishly as the data matched the prior reading, signalling sticky inflation.
Antipodeans showed little movement as both pairs paused after the prior day’s heavy selling. Newsflow and data were light during APAC hours, though a pullback in copper kept AUD capped.
PBoC set USD/CNY mid-point at 71152 .vs exp. 7.1439 (Prev. 7.1118)
FIXED INCOME
10yr UST futures paused after Thursday’s selloff on the back of hot US data, with traders digesting President Trump’s latest tariff announcement while awaiting the US PCE data.
Bund futures also took a breather, with the contract back above the 128.00 handle after briefly dipping below yesterday, as traders looked ahead to commentary from ECB’s Cipollone and Lagarde alongside the ECB Consumer Expectations Survey.
10yr JGB futures conformed to the broader fixed income complex and were underpinned by the softer-than-expected Japanese Tokyo CPI data.
US sold USD 44bln of 7yr notes; tail 0.6bps. High Yield: 3.953% (prev. 3.925%, six-auction average 4.098%). WI: 3.947%. Tail: 0.6bps (prev. 0.3bps, six-auction avg. -0.7bps). Bid-to-Cover: 2.40x (prev. 2.49x, six-auction avg. 2.6x). Dealers: 12% (prev. 9.8%, six-auction avg. 9.7%). Directs: 31.6% (prev. 12.8%, six-auction avg. 22.2%). Indirects: 56.4% (prev. 77.4%, six-auction avg. 68.1%).
Australia sold AUD 900mln 2.75% 2029 bond; b/c 5.97x (prev. 3.69x), average yield 3.6679% (prev. 3.4624%).
COMMODITIES
Crude futures were modestly firmer after settling around unchanged on Thursday, with little reaction to US data, while traders monitored geopolitics following several NATO-related headlines and Russia’s partial diesel export ban and extension of gasoline export ban.
Spot gold was mildly softer but remained within recent ranges, ignoring President Trump’s tariff announcements and instead focusing on the upcoming US PCE report.
Copper futures traded softer following Trump’s tariff announcements and gave back some of the prior Freeport-induced spike higher.
CRYPTO
Bitcoin consolidated after yesterday’s dire selloff, with prices back to around USD 109.5k vs USD 113k at this time yesterday.
NOTABLE ASIA-PAC HEADLINES
Japanese government revised July real wages to -0.2% vs preliminary estimate of +0.5%, according to Reuters.
Japanese Finance Minister Kato said he will not comment on FX levels, according to Reuters.
India’s government has drafted a proposal to relax foreign investment rules for e-commerce exports, according to Reuters.
PBoC injected CNY 165.8bln via 7-day reverse repos with the rate at 1.40%; injected CNY 400bln via 14-day reverse repo.
DATA RECAP
Japanese CPI Tokyo Ex fresh food YY (Sep) 2.5% vs. Exp. 2.8% (Prev. 2.5%)
Japanese CPI, Overall Tokyo (Sep) 2.5% (Prev. 2.6%, Rev. 2.5%)
New Zealand ANZ Roy Morgan consumer confidence 94.6 (prev. 93.2)
GEOPOLITICS
NATO
US President Trump said he wants Turkish President Erdogan to stop buying Russian oil and that Putin ought to stop the war in Ukraine, adding that NATO’s relationship with the US is the strongest it has ever been. He noted that Erdogan could have a big influence over Russia’s war in Ukraine, according to Reuters.
Dutch PM warned Russia over further incursions into NATO airspace, according to Bloomberg.
European officials privately told Russia they are ready to shoot down jets and view Russia’s Estonia incursion as deliberate, according to Bloomberg.
French President Macron said France stands ready to support Denmark in assessing the situation and contributing to the security of Danish airspace, according to X.
RUSSIA-UKRAINE
US President Trump said Ukraine has a shot at getting territory back and that Russia is doing poorly, adding that he is dissatisfied with what Russian President Putin is doing, according to Reuters.
IAEA said a drone was downed and detonated around 800 metres from the perimeter of Ukraine’s South nuclear power plant overnight, noting that 22 UAVs were observed late last night and this morning and that its team heard gunfire and explosions, according to Reuters.
US President Trump said he believes Turkey will halt purchases of Russian oil, adding that it is harder for Hungary and Slovakia as they are landlocked with one pipeline, according to Reuters.
MIDDLE EAST
US President Trump said he thinks he will make a major announcement on Syria today, according to Reuters.
Iran’s Foreign Minister told the UK Foreign Minister that Tehran had offered multiple diplomatic initiatives to keep diplomacy open, but the E3 decided to snap back UN sanctions to align with the US “maximum pressure” policy. He said the consequences of the snapback will be upon those who initiated and supported it, according to Aslani via X.
US President Trump said he had good talks on Gaza and really good talks with Israeli PM Netanyahu, adding that a hostage deal could happen soon, according to Reuters.
US President Trump said he will not allow Israel to annex the West Bank, according to Reuters.
OTHERS
Turkish President Erdogan said the US and Turkey will discuss F-35s, Halkbank, and a range of topics, according to Reuters.
US President Trump said he had good talks with Turkish President Erdogan and that the meeting was conclusive on many things, according to Reuters.
South Korea fired warning shots at a North Korean commercial vessel for crossing the maritime border, according to Yonhap.
EU/UK
NOTABLE HEADLINES
Italy’s Economy Minister said the digital euro plan will take two years to be implemented, according to Reuters.
ECB’s Cipollone said they stand ready to react if inflation is expected to deviate significantly from the 2% target in the medium term, according to the ECB.
Volkswagen (VOW3 GY) cut output and paused production at its German EV plants, according to Bloomberg.
LATAM
Banxico cut rates by 25bps as expected to 7.50%, Heath dissented in favour of maintaining rates at 7.75%.
BCB’s Galipolo said unemployment levels are a positive surprise and hitting record lows, adding that the central bank has no specific strategy for FX swaps. He noted the central bank is well-positioned to operate under a floating FX rate and intervene only in cases of market dysfunction, according to Reuters.
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