Trump social media posts again dominate Asia session in trade-heavy news day

Asia market update: Trump social media posts again dominate Asia session in trade-heavy news day; US July Durable Goods tonight.

General trend

- The dollar dropped, while 2-year US Treasury yields lost -1.5bps (initially -3.5bps) even as the 30-year gained +5bps to 4.94% as Pres Trump fired, with immediate effect, US Fed’s Gov Cook for cause. Then in a somewhat surreal development, Fed’s Cook later said she will Not resign. Said that Pres Trump has no authority to fire her, will continue to carry out her duties.

- US 10-years also up strongly, with gap between 2 and 10-year Treasuries hitting steepest level since mid-July, at +58.5bps.

- Nikkei -0.9% and Kospi -1.0% underperformed in a risk-off mood allround in Asia.

- Divergence in physical vs digital assets as Gold and Silver +0.5%, whereas BTC continued to plumb early July lows down to $108K.

- In a busy evening for Pres Trump on social media he also threatened countries that have digital taxes with "subsequent additional tariffs" on their US exports, singling out chips in particular, unless the digital taxes were removed. Comes just days after EU-US confirmed their trade deal struck a few weeks ago in Scotland.

- Earlier during the NY session Trump threatened China with 200% tariffs if the US doesn’t get rare earth magnets – "need a lot in a short period of time".

Other trade related news

- The Trump Admin / South Korea Summit at the White House confirmed South Korean companies to invest ~$150.0B, (separate from $350B of investment as a series of MOUs by South Korea as a nation) with Korean Air to order 103 Boeing planes, shipbuilding for the US and US military equipment purchases. Defense cost-sharing reportedly not yet discussed.

- Swiss Post joined Japan Post Holdings today in suspending US parcel deliveries. Comes on top of DHL and BPost out of Europe in recent days suspending postal shipping to the US amid the Trump Admin suspending the de minimis exemption for all countries of origin.

- Top China trade negotiator Li Chenggang to head to US again to resume talks with USTR Greer and other officials "later this week"

- Further signs of potential wrinkles to come in the US-Japan trade deal, with trade rep Akazawa to head to the US this week to further demand a written agreement, cut overlapping tariffs on Japanese exempted goods ASAP, and clearly did not appreciate Commerce Sec Lutnick's earlier comment on Fox News that the $550B Japanese investment in the US “will be at the hand of Donald Trump.

Other Asia news

- Japan July PPI Services softer than expected. Japanese yield curve up 1bps across the curve today, with yields again pressing against multi-year or multi-decade highs.

- Australia RBA) August Minutes confirmed that the RBA will pace of the rate of cuts to come by data and balance of global risks, with its stance “still somewhat restrictive”.

- US equity FUTs -0.1% during Asian trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

- Tue Aug 26th (Tue night US July Durable Goods).

- Wed Aug 27th KR Aug Business Confidence, AU July CPI, (Wed eve DE Sept GfK Consumer Confidence).

- Thu Aug 28th NZ Aug ANZ Business Confidence, KR BOK Rate Decision, PH BSP Rate Decision, (Thu eve US Q2 GDP 2nd Est).

- Fri Aug 29th JP July Retail Sales, JP July Industrial Prod, JP Aug Consumer Confidence, IN Q2 GDP (Fri night US July Core PCE).

Holidays in Asia this week

- Mon Aug 25th Philippines.

- Wed Aug 27th India.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 8,968.

- Australia Central Bank (RBA) Aug Minutes; Pace of cuts to be determined by data, balance of global risks; Stance still somewhat restrictive.

- Australia PM Albanese: Iran Ambassador to be expelled from Australia, cites Iran govt directing at least two attacks on anti-semitic attacks in Australia - financial press.

- NZIER: Now expects RBNZ will cut the cash rate to 2.50% in 2025.

China/Hong Kong

- Hang Seng opens -0.4% at 25,714; Shanghai Composite opens -0.3% at 3,871.

- China President Xi plans to meet Russia State Duma Chief on Tues in Beijing - Chinese media.

- Top China trade negotiator Li Chenggang to head to US again to resume talks with USTR Greer and other officials "later this week" - WSJ.

- Pres Trump: Have to charge China 200% tariffs or something on China if we don't get (rare earth) magnets; Going to have a lot of magnets in short period of time.

- Turnover in China’s stock market hits CNY3.1T, the second highest total ever – press [overnight update].

- China PBOC sets Yuan reference rate: 7.1188 v 7.1161 prior.

- China PBOC Open Market Operation (OMO): Injects CNY406B in 7-day reverse repos; Net drains CNY175B v injects CNY22B prior.

Japan

- Nikkei 225 opens 0.4% at 42,662.

- Japan July PPI Services Y/Y: 2.9% v 3.2%e.

- Japan said to consider 5-year tax break on capital investments - Japanese press.

- Perplexity.IPO: Nikkei and Asahi news said to file suit against Co in Tokyo - financial press.

- Japan Chief Trade Negotiator Akazawa: Demands US to cut overlapping tariffs on Japanese exempted goods 'soon' - pres.

- Japan Chief Trade Negotiator Akazawa to visit US as early as this week to discuss joint trade communique – press.

- Japan MOF sells ¥349.2B v ¥350B indicated of JGBs in liquidity enhancement auction; bid-to-cover: x v 3.10x prior (Aug 21st).

- Japan MOF to seek ¥32.0T for debt servicing costs - Japanese press.

- Japan Post Holdings: Said to suspend some postal items shipping to us from Wednesday, AUG 27TH - PRESS.

Korea

- Kospi opens -0.3% at 3,199.

- Follow Up: South Korea companies to invest ~$150.0B [inline with report Aug 20th]; Korean Air to order 103 planes from Boeing – Yonhap.

- South Korea Adviser Wi: Details on US trade talks still need to be determined - financial press.

- South Korea President Lee: Plans to increase defense spending; US President Trump said he would expand the US-South Korea arms cooperation.

- US Pres Trump: Don't mind renegotiating South Korea deal; Discussing contracting for some ships - comments after meeting with South Korea Pres Lee.

- South Korea Justice Min: Long believed that US Pres Trump and leaders in Washington have distorted information about former Pres Lee - comments to Parliament.

- (US) Pres. Trump: What is going on in South Korea? Seems like a Purge or Revolution. We can’t have that and do business...

- South Korea Aug Consumer Confidence: 111.4 v 110.8 prior.

Other Asia

- Indonesia Wealth Fund Danantara seeking $3.1B for "Patriot Bonds" - financial press.

- Reportedly Japan to invest $68B in India over 10-years including chips, AI - Nikkei.

- Malaysia unveiled its first edge AI processor; Local designer SkyeChip introduced the MARS1000 - press.

North America

- (US) Fed's GOV Cook: No cause exists for her to be fired, will not resign - statement.

- (US) Pres Trump: Removes Fed's Gov Cook "immediately" - posts letter on Truth Social.

- (US) Pres. Trump: As the President of the United States, I will stand up to Countries that attack our incredible American Tech Companies.

- (US) Follow up: FHFA Dir Pulte: Fraud will not be tolerated in Pres Trump's housing market - financial press.

- (US) Banking lobbies including the American Bankers Association, the Bank Policy Institute and the Consumer Bankers Association pushing to change new US stablecoin rules over fears they will spark trillions of dollars worth of outflows - FT.

- (US) White House NEC Dir Hassett: Repeats INTC stake is non-voting; Intel was special circumstance due to massing amount of CHIPS Act spending - CNBC.

- US Pres Trump: I paid zero for Intel, it is worth approximately 11 billion Dollars. All goes to the USA. Why are “stupid” people unhappy with that? I will make deals like that for our Country all day long. I will also help those companies that make such lucrative deals with the United States. I love seeing their stock price go up, making the USA RICHER, AND RICHER. More jobs for America!!! Who would not want to make deals like that?“

- (BR) Brazil Aug FGV Consumer Confidence: 86.2 v v 86.7 prior.

- (US) July Chicago Fed National Activity Index: -0.19 v -0.11e.

- (US) Pres. Trump: What is going on in South Korea? Seems like a Purge or Revolution. We can’t have that and do business there. I am seeing the new President today at the White House..

- (US) July new home sales: 652K V 630KE; June revised higher.

- (US) Aug Dallas Fed Manufacturing activity: -1.8 V -1.7E.

- (US) Reportedly United States Geological Survey (USGS) is proposing classifying copper, potash as critical minerals.

- (US) President Trump, referencing Intel stake: I want many more cases like it and want to try to get 'as much as I can' in US company stakes.

- (US) Pres Trump: Will put tariffs on drugs rapidly; Going to do numbers on cost of drugs in the US; Will be reducing drug prices by 1,400-1,500%.

- (CA) Canada Intl Trade Min LeBlanc and US Commerce Sec Lutnick to meet in coming days following Canada's lifting of certain tariffs.

Europe

- (FR) France bond FUTs extend losses on political uncertainty amid potential no-confidence vote against Prime Minister - financial press.

- (IE) Ireland Aug Consumer Confidence Index: 61.1 v 59.1 prior.

- (UK) Aug BRC Shop Price Index Y/Y: 0.9% v 1.0%e.

- (UR) Ukraine Presidemt Zelenskiy: US and Ukrainian expected to meet this week.

- (TR) Turkey readying to lift ban on stock short sales - press.

- (EU) ECB chief Lagarde: Region's economy is resilient but not thriving.

- (BE) Belgium Aug Business Confidence: -8.9 v -10.8 prior.

Levels as of 01:20 ET

- Nikkei 225 -0.9%, ASX 200 -0.5%, Hang Seng -0.2%; Shanghai Composite -0.1%; Kospi -1.0%.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.1%; DAX -0.4%; FTSE100 -0.4%.

- EUR 1.1610-1.1660; JPY 146.99-147.88; AUD 0.6472-0.6494; NZD 0.5829-5861.

- Gold +0.1% at $3,421/oz; BTC -1.9% at $110,440; Crude Oil -0.5% at $64.49/bbl; Copper +0.3% at $4.5458/lb.