Market Highlight 27.03.2025

China’s economic data for the first two months of 2025 showed a robust recovery, indicating that the stimulus measures introduced in the autumn of last year are beginning to yield positive results. Retail sales - a key proxy for consumer spending - accelerated in January and February, while both investment and industrial production exceeded market expectations. The country’s long-struggling real estate sector also showed tentative signs of stabilization after years of contraction. Notably, new home sales by China’s top 100 property developers rose 1,2% year-on-year to 188 billion yuan (approximately 25,9 billion USD) in February, following a 3,2% decline in January. During his presidential campaign, U.S President Donald Trump had pledged to impose an additional 60% tariff on Chinese goods, but so far, the increase has been limited to 20%. In response to the stronger-than-expected economic performance, HSBC, ANZ, and Citi have raised their 2025 GDP growth forecasts for China to 4,8%, 4,8%, and 4,7%, respectively, up from previous projections of 4,5%, 4,3%, and 4,2%. These updated forecasts move closer to the government’s ambitious target of approximately 5% GDP growth for the year.

President Trump stated on Monday evening that the retaliatory tariffs scheduled for announcement on April 2 will be applied universally to all countries as part of a broader tariff package, though the actual rates will be lower than previously expected. He also confirmed that the 25% import duty on automobiles entering the U.S - previously announced - will take effect on April 2. The USD strengthened on Tuesday, with the USD Index rising 0,43%, supported by an uptick in U.S durable goods orders and the latest trade policy comments from President Trump. In Vietnam, the USD/VND interbank rate fell by over 50 dong on the day to below the 25.600 level. However, given the greenback’s strong performance in global markets overnight, the exchange rate is expected to recover today.

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