Market Highlight 02.07.2025

  U.S manufacturing activity declined for a fourth consecutive month in June, reflecting mounting uncertainty stemming from President D. Trump’s tariff policies and their impact on production costs. The manufacturing Purchasing Managers’ Index (PMI) edged up to 49 in June from 48,5 in May, as new orders fell for a fifth straight month while hiring in the sector stagnated amid broader efforts by firms to cut operating expenses. Manufacturing conditions across Asia also showed little sign of improvement, with U.S tariff policy uncertainty continuing to weigh heavily on orders and output throughout the region. Taiwan, Japan, and South Korea each reported declines in both production volumes and sales in June. PMI data further indicated that the deterioration in manufacturing activity within the ASEAN bloc has deepened in mid-2025. India remains the notable exception in the region, benefiting significantly from the ongoing shift in global investment trends. The country recorded its highest level of export orders in two decades and is now viewed as the next likely candidate - after the United Kingdom - to reach a trade agreement with the United States before the reciprocal tariffs come back into effect on July 9. Such a deal could reduce the 26% tariff rate that President Trump announced on April 2. President Trump has stated that he is not considering any further extension of the tariff negotiation period and that the U.S government will send official notices to trading partners outlining applicable import tariff rates after July 9.
  The USD/VND interbank exchange rate rose by an additional 20 VND on Monday, moving against the broader trend of significant U.S dollar weakness globally (down 10,88% year-to-date). The rate is forecast to remain elevated in the 26.100 - 26.220 range until clearer signals emerge regarding the progress of Vietnam - U.S tariff negotiations ahead of the July 9 deadline.

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