Bloomberg Daybreak: Asia Edition APAC Stocks Jittery as Tariff Concerns Build Up
Mar 21, 2025
Olivier d'Assier, Head of Investment Decision Research at SimCorp, and Peter Chung, Head of Research at Presto Research, share insights on the jittery APAC markets influenced by U.S.-China tariff uncertainties. They discuss the impact of tariffs on inflation and central bank policies, particularly in Japan. The conversation shifts to President Trump's support for stablecoin legislation and its potential to bolster the dollar's dominance. They also explore how shock events can create buying opportunities and the evolving role of cryptocurrencies on the global stage.
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APAC Market Uncertainty
- Asian markets are cautious due to US equity weakness and uncertainty surrounding President Trump's next trade war move.
- The lack of details regarding tariffs, especially concerning the US-China relationship, is causing widespread market nervousness.
Tariff Impact on Inflation
- Tariffs will become inflationary if maintained long term, but resellers often absorb short-term increases.
- Short-term inflation can arise from consumers rushing to buy goods before tariffs take effect.
Asian Currencies and Fed Policy
- Many Asian currencies are pegged to the dollar, requiring them to follow the Fed's actions on interest rates.
- If the Fed maintains high rates due to tariff-driven inflation, Asian debtors face higher refinancing costs for US dollar bonds.