20th May 2025

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TRADE:

• The US and Japan are expected to hold talks this Friday, although US Treasury Secretary Bessent is not expected to attend the talks. (Kyodo)
• Japanese Finance Minister Kato said on Tuesday he expects any bilateral meeting with U.S. Treasury Secretary Bessent on exchange rates to be based on their shared view that excessive currency volatility was undesirable. (RTRS)
• Japan's top trade negotiator, Ryosei Akazawa, said on Tuesday there was no change to Tokyo's stance of demanding an elimination of U.S. tariffs in bilateral trade negotiations. (RTRS)
• The U.S. Treasury does not anticipate any trade deal announcements as part of a G7 finance leaders meeting this week in Canada, and will not agree to a joint communique unless it serves U.S. interests, according to a US source cited by Reuters. (RTRS)
• The head of the port of LA, the busiest U.S. port, does not expect imports to soar after last week's tariff truce between Washington and Beijing that temporarily lowered the duty to 30% from 145%. (RTRS)
• Inbound shipments to the port of LA dropped as much as 30% in early May as President Donald Trump’s tariffs discourage trade. (BBG)
• General Motors informed employees and dealers for its China export business on Thursday in China that it would stop shipping vehicles to China from the United States. (RTRS)
• India is discussing a US trade deal structured in three tranches and expects to reach an interim agreement before July, when Trump’s reciprocal tariffs are set to kick in, according to officials in New Delhi cited by Bloomberg. (BBG)
• China is giving European business leaders a warm welcome, offering them rare access to senior policymakers and assurances of improved conditions, in an effort to strengthen ties and counter Donald Trump's tariff pressure. (BBG)
• Japan is mulling a review of tax exemptions for small parcels including those shipped from China, joining a slew of governments stepping up scrutiny over a duty-free channel used by Shein and PDD Holdings Inc’s Temu. (BBG)
• Thailand expects to reduce its trade gap with the US by as much as $15 billion annually (current $46bln gap) with its recent initiatives to prevent the misuse of origin rules for exports, according to Finance Minister Pichai Chunhavajira. (BBG)

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MACRO:

• Trump will join the congressional debate over his sweeping tax bill on Tuesday, as Republicans who control the House of Representatives struggle to keep their fragile majority together for a crucial vote later this week. (RTRS)
• House GOP leaders want Trump to call off Republican hard-liners who are digging in for deeper Medicaid cuts that are threatening to unravel the “big beautiful bill”. (Politico)
• Stablecoin legislation overcame a procedural blockade in the US Senate, marking a major victory for the crypto industry after a group of Democrats dropped their opposition Monday. (BBG)
• The BIS has flagged a possible scramble for dollars could be triggered if whipsawed investors begin to unwind positions in the $113 trillion FX swap market amid U.S. volatility. (RTRS)
• Japan’s long end yields climbed, with the 30yr hitting the highest on record, after the auction of 20-year bonds got the lowest demand since 2012, pointing to market concern about who will buy as the Bank of Japan dials back its huge debt holdings. (BBG)
• The BoJ will sound out market participants this week to gauge their views on how aggressively it should proceed with quantitative tightening. (BBG)
• BoJ meeting with bond market participants showed some seek larger cuts to current bond buying whilst some seek smaller cuts, in addition to various views around the length of the taper plan. (Newswires)
• Only three of the seven semiconductor plants that companies built or bought in Japan in fiscal 2023 and 2024 have begun mass production as of April, reflecting a slow recovery in demand for chips used in applications other than AI. (Nikkei)
• China’s benchmark lending rates were lowered by 10 basis points after the PBoC cut its policy rate to stimulate domestic demand. The one-year LPR was lowered to 3.0% and the five-year rate was reduced to 3.5%. (WSJ)
• Chinese President Xi called for continuous efforts to build a stronger manufacturing industry. Xi stressed the need for the country to be self-reliant and to master core technologies. (Xinhua)
• China's NDRC said most of the country's job and economic stabilisation policies will be implemented by the end of June, and the country will make greater efforts to attract foreign capital. (RTRS)
• Hong Kong’s key interbank borrowing cost slumped following foreign-exchange intervention by the city’s authorities, fueling bearish bets against the local dollar. (BBG)
• The Aussie dipped after the RBA cut rates by 25bps as expected, reduced its inflation forecasts, and warned of 6% unemployment in a higher tariff scenario. Governor Bullock said in her presser that more cuts are possible, and whilst a 50bp cut was discussed it was deemed not appropriate. (Newswires)
• Some Wall Street strategists are betting European stocks will enjoy their best performance relative to the US in at least two decades as the region’s economic outlook improves. (BBG)
• Wells Fargo's strats suggest investors should reduce their holdings of emerging market equities and buy US stocks instead. (BBG)
• Brazil's central bank does not see any realistic prospect of emerging nations in the BRICS group creating markets large enough to topple the U.S. dollar's dominance within the next 10 years, monetary policy director Nilton David said. (RTRS)
• Malaysia is launching a sovereign, full-stack AI ecosystem powered by Huawei GPUs that also marks the first national deployment of Chinese large language model (LLM) DeepSeek outside of China. (Developing Telecoms)
• Malaysia’s trade rose to an almost three-year high, with exports surpassing expectations amid front-loading activity. (BBG)

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GEOPOLITICAL:

• Taiwan's President Lai Ching-te announced plans to establish a sovereign wealth fund to help Taiwanese companies expand globally and counter China's attempts to isolate Taiwan. (BBG)
• Taiwan wants peace and dialogue with China but the government must continue to strengthen the island's defences, President Lai Ching-te said on Tuesday as he completed one year in office. (RTRS)

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EQUITIES:

• Alphabet's self-driving unit Waymo said it received approval from California to expand its robotaxi operations in more areas of the San Francisco Peninsula and further south, including San Jose. (RTRS)
• The DoJ has opened a probe into a recent breach at the leading cryptocurrency exchange Coinbase Global Inc., according to a Bloomberg source. (BBG)
• Pfizer said it would license an experimental cancer treatment from China's 3SBio Inc, paying $1.25 billion upfront and up to another $4.8 billion if developmental milestones are met. (RTRS)
• Subaru of America is hiking prices on several models, the company said on Monday, the latest automaker to pass along cost increases to consumers as their expenses rise from the Trump administration's tariffs. (RTRS)
• Chinese CATL's shares soared on their Hong Kong debut, marking what could be the largest listing in the Asian financial center this year. (WSJ)
• Xiaomi's founder Lei Jun said on Tuesday that the company has started mass production of its self-developed Xring O1 advanced mobile chip. (RTRS)
• Cathie Wood’s funds made their biggest purchase of TSMC shares in nearly a year, underscoring a change in stance from being mostly sellers of the chipmaker since the third quarter of last year. (BBG)
• Foxconn said on Tuesday an AI centre it has announced with Nvidia will be built in phases and is targeted to have 100 megawatts of power. (RTRS)
• Honda Motor said that it was scaling back its investment in electric vehicles given slowing demand and would be focusing on capturing growing demand for hybrids with new models. (RTRS)
• Nintendo has turned to Samsung Electronics to help make the main chips for the Switch 2, which could allow for higher production of the console than expected. (BBG)
• Seven & i Holdings plans to sell a partial stake in Seven Bank to trading house Itochu, with an announcement expected as early as May 30. (Nikkei)
• Equinor said the Trump administration has lifted a month-old stop-work order on a major offshore wind facility planned off the coast of New York. (RTRS)

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