(Bloomberg) — Asian shares moved in a narrow range as traders awaited inflation data from the US to gauge the impact from President Donald Trump’s tariff war before adding to their portfolios.
The MSCI Asia Pacific Index swung between small gains and losses, and shares in mainland China dipped 0.6%. While China’s economic growth beat estimates on strong exports, consumer demand at home remained weak. Equity-index futures for the US were flat, after rising as much as 0.4% when Nvidia Corp. said it plans to resume some chip sales to China.
Treasuries and a gauge of the dollar were steady while Bitcoin slipped below the $120,000 level. Japan’s 10-year government bond yield climbed to its highest level since 2008 amid concerns about fiscal spending.
“Broader markets are still cautious with US CPI tonight along with US earnings keeping things rangebound for now,” said Billy Leung, investment strategist at Global X ETFs in Sydney. “Bear in mind that we also have ongoing trade risks with letters still yet to be received by several US trade partners – and new potential tariffs on EU, Russia and Mexico.”
Stocks globally have rallied from their slump in April, when wide-ranging tariffs were announced, to record high levels as investors speculate the levies won’t significantly harm the US economy and company earnings. That optimism faces a key test this week as investors read the US inflation print Tuesday, which will give clues on the impact from Trump’s tariffs and the direction for interest rates, and corporate reporting season kicks off.
Traders are gearing up for results from big banks early on. While corporate America is bracing for its weakest earnings season since mid-2023, lower estimates could be easier for companies to beat. As US financial giants kick off earnings season Tuesday, strategists say subdued profit expectations are setting the stage for their sizzling run to continue.
After months of seeing little inflation, the CPI probably experienced slightly faster growth in June as companies started to pass along higher costs of imported merchandise associated with tariffs.
The options market is betting the S&P 500 will swing 0.6% in either direction after Tuesday’s CPI, based on the cost of at-the-money puts and calls, according to Citigroup Inc. That would be in-line with implied moves the past two months, though below an average realized swing of 0.9% over the last year.
“Earnings growth is slowing, tariffs are starting to bite, and geopolitical risk remains elevated. Yet, stock valuations reflect a lot of optimism,” said Jeff Buchbinder and Adam Turnquist, strategists at LPL Financial, in a note Monday. “While trade uncertainty should start to dissipate in the second half, the path to clarity may be bumpy.”
Meanwhile, China’s economic growth exceeded expectations in the second quarter, but strong exports to markets outside the US masked deepening pressure caused by weak consumer demand at home.
The GDP deflator — a broad measure of prices across the economy — declined for the ninth consecutive quarter, extending the longest streak since the quarterly data began in 1993.
“Retail sales and fixed asset investments tanked,” said Michelle Lam, Greater China Economist at Societe Generale. “So again a picture of strong supply, but weak domestic demand, and export resilience is not going to last. Not a good set of data despite GDP beat.”
Separately, Nvidia plans to resume sales of its H20 artificial intelligence accelerator to China based on assurances from Washington that such shipments would be approved, a dramatic reversal from the earlier stance of Trump’s administration. US government officials have told Nvidia that they would green-light export licenses for the H20, the company said.
The news is “obviously positive, not just for the company, but also the AI semiconductor supply chain, as well as China tech platforms that are building AI capabilities,” said Vey-Sern Ling, managing director of Union Bancaire Privee. “This is also a good development for US-China relations.”
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.1% as of 12:32 p.m. Tokyo time
- Australia’s S&P/ASX 200 rose 0.5%
- Hong Kong’s Hang Seng rose 0.2%
- The Shanghai Composite fell 0.9%
- Euro Stoxx 50 futures were little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.1% to $1.1677
- The Japanese yen was little changed at 147.61 per dollar
- The offshore yuan was little changed at 7.1744 per dollar
Cryptocurrencies
- Bitcoin fell 2.4% to $117,329.39
- Ether fell 2.2% to $2,939.86
Bonds
- The yield on 10-year Treasuries was little changed at 4.43%
- Japan’s 10-year yield advanced 1.5 basis points to 1.590%
- Australia’s 10-year yield advanced one basis point to 4.38%
Commodities
- West Texas Intermediate crude fell 0.4% to $66.68 a barrel
- Spot gold rose 0.4% to $3,355.73 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu, Abhishek Vishnoi, Mark Cranfield and John Cheng.
©2025 Bloomberg L.P.
