Asia-Pacific markets set to open mixed as investors assess Trump's 'done' deal with China

Asia-Pacific markets are poised for a mixed open following President Trump's claim of a finalized trade deal with China involving 55% tariffs on Chinese imports, a statement confirmed by Commerce Secretary Lutnick; Japan's Nikkei 225 is expected to open lower, while Australia's S&P/ASX 200 is set to start higher, and traders are also monitoring upcoming inflation data from the Philippines and Thailand. U.S. stock futures declined after the announcement and weaker-than-expected U.S. inflation data, with the CPI rising 0.1% versus the expected 0.2%.

Analysis

Asia-Pacific markets are poised for a mixed opening as investors process U.S. President Donald Trump's announcement of a purportedly finalized trade deal with China, which includes a significant 55% tariff on Chinese imports, a detail corroborated by Commerce Secretary Howard Lutnick. Futures markets reflect this divergence: Japan's Nikkei 225 futures in Chicago (38,330) and Osaka (38,400) point to a lower open compared to its last close of 38,421.19, and Hong Kong's Hang Seng index futures (24,252) also suggest a weaker start versus its previous close of 24,366.94. Conversely, Australia's S&P/ASX 200 futures (8,622) indicate an upward opening from its last close of 8,592.1. This varied regional outlook follows a downturn in U.S. stock futures, with S&P 500, Nasdaq 100, and Dow Jones Industrial Average futures all declining by approximately 0.2%. The U.S. market sentiment was influenced by the trade deal news and U.S. May inflation data, where the Consumer Price Index rose 0.1%, less than the 0.2% Dow Jones forecast, and core CPI also undershot expectations. President Trump's remarks specified that the deal, subject to final approval with President Xi, would involve China supplying magnets and rare earths, and the U.S. permitting Chinese student enrollment, alongside the U.S. imposing 55% tariffs while China faces 10%. The moderately negative sentiment and high market impact score (0.7) underscore investor uncertainty surrounding these trade developments, with traders also keenly awaiting inflation data from the Philippines and Thailand.

Key Decisions for Investors

• Investors should closely monitor the definitive terms and sector-specific implications of the U.S.-China trade agreement, particularly the impact of the stated 55% U.S. tariffs and the deal's conditional nature.
• Evaluate exposures to U.S. assets sensitive to inflation and Federal Reserve policy, as the softer-than-expected May CPI figures may influence monetary policy expectations.
• Maintain a cautious approach towards Asia-Pacific equities, especially those exposed to international trade, and watch for forthcoming inflation data from the Philippines and Thailand for indications of regional economic trends and market sentiment.