Morning Wrap (15.01.2025)

Asian markets traded cautiously higher on Wednesday as investors awaited key U.S. inflation data. Japan's Nikkei rose 0.3%, while China's CSI 300 edged down 0.2%. Regional sentiment remained subdued with Thailand's SET falling over 1% and Malaysia's KLCI dropping 0.7%.

South Korean President Yoon Suk Yeol was arrested in a pre-dawn operation over his failed martial law attempt in December. The KOSPI remained resilient, rising 0.3% as the Bank of Korea is expected to cut rates by 25bps on Thursday amid economic challenges and political uncertainty.

Japanese yen strengthened 0.4% after BOJ Governor Ueda indicated possible rate hikes at next week's meeting, citing positive wage growth outlook. The BOJ ended negative rates last March and raised rates to 0.25% in July, with markets now pricing in further tightening as inflation stays above 2%.

U.S. plans additional chip export controls targeting TSMC and other manufacturers to restrict advanced semiconductor flow to China, adding to existing Biden administration measures. The new regulations aim to increase scrutiny of Chinese customers with potential military ties.

TikTok announced plans to shut down its U.S. app on Sunday ahead of the federal ban deadline, unless blocked by Supreme Court intervention. The company estimates one-third of its 170 million U.S. users would stop accessing the platform within a month of the ban.

Nippon Steel seeks cooperation with incoming Trump administration to salvage its $15 billion U.S. Steel acquisition after Biden's rejection. The company filed lawsuits challenging Biden's decision, while domestic rivals Cleveland-Cliffs and Nucor prepare a joint counter-bid.

Gold traded flat at $2,675.90 as traders await U.S. CPI data, though softer PPI numbers provided some support. Copper retreated 0.6% to $9,101.50 despite record Chinese December imports, as markets assess potential impact of Trump's planned tariff measures.

Oil prices stabilized with Brent at $79.95 and WTI at $76.45, hovering near four-month highs on Russian sanctions impact. API data showed U.S. crude inventories fell 2.6 million barrels last week, while gasoline stocks rose 5.4 million barrels.

Dollar steadied below two-year highs as markets anticipate U.S. inflation data and Fed policy outlook. South Korean capital markets saw largest foreign outflows since March 2020 at $3.86 billion in December amid political turmoil.