Ahead Today
G3: US Conference Board Consumer Confidence
Asia: Thailand Car sales
Market Highlights
The Trump administration is preparing to launch additional national security investigations to help recreate tariffs, while there are some signs that some countries are taking a pause in implementation of trade deals even as none are explicitly backing out right now.
In particular, the Trump administration plans to use Section 232 legislation to launch investigations into a range of products such as batteries, cast iron and iron fittings, electric grid equipment, telecom equipment, plastics and plastic pipings and industrial chemicals. This comes on top of the usage of Section 301 investigations to counter discriminatory actions by trading partners, and we think overall fits in with our view that the administration is trying to recreate the previous tariff regime to the extent possible even as existing trade authorities are more cumbersome.
We as such continue to think that countries will by and large honour trade deals, even as some may take a pause to reassess the situation. On that front a European Union assessment found that Trump’s latest tariffs will increase leveis on some of EU’s exports, including cheese and some agricultural products. Meanwhile, Bloomberg News reported that the US Supreme Court decision could give India more scope in negotiations over a trade deal, even as India is not considering backing away from a bilateral trade agreement with the US struck earlier this month.
Beyond tariffs, the key for Asia is the pickup in exports for early months of 2026 we have seen so far, including a 25%yoy rise in Thailand’s exports coupled with a 47%yoy surge in South Korea’s exports for the first 20 days of February on a working adjusted basis. These trends fit in well with the lead indicators we track including industrial metal prices, which suggest that if anything Asia’s exports should accelerate into at least 1H2026 including from strong AI and electronics demand.
We as such still like the export-oriented currencies such as KRW, MYR, and to some extent CNY, while think INR and IDR will likely underperform moving forward still. Key risks to watch out for include a possible military attack on Iran even as latest indications suggest a pushback by US generals on the risk of a prolonged attack. Meanwhile, the current market concern around the disruptive impact of GenAI is also key, and from a Asia context we already seen some impact on the likes of India’s IT services stocks for example.
