Economy News Highlight — Last Week

(Week of 11–17 Aug 2025, MYT)

Global highlights

  • U.S. producer prices (July) rose 3.3% YoY, hotter than expected, reinforcing the narrative that inflation pressures persist.[1]
  • Sterling firmed as U.K. growth slowed less than feared; the ONS reported +0.4% m/m GDP in June, following a dip in May.[3][4]
  • Euro area industrial production fell 1.3% m/m in June, with weakness concentrated in Germany and consumer goods.[5][6]
  • China’s July data cooled: industrial output +5.7% YoY (vs. 6.8% in June) and retail sales +3.7% YoY, both missing forecasts.[7]
  • Trade policy watch: the U.S. “reciprocal tariff” regime remains in focus. Baseline tariffs broadened, and the White House again flagged potential up to 100% duties on semiconductors that lack U.S. manufacturing; timelines and carve-outs continue to evolve.[8][9][10]

Malaysia highlights

  • Malaysia’s GDP grew 4.4% YoY in Q2 2025 (seasonally adjusted +2.1% q/q). Bank Negara Malaysia (BNM) cited external tariff risks and trimmed its 2025 growth outlook to 4.0%–4.8%; July saw the first policy rate cut in five years as inflation eased.[11][12]
  • U.S. tariff on Malaysian exports set at 19% took effect in early August; authorities highlighted existing exemptions for pharmaceuticals and semiconductors and ongoing talks for further carve-outs.[13][14]

References

  1. Reuters — “US producer inflation heats up as goods, services prices soar” (14 Aug 2025). Link
  2. Reuters — “Instant view: US producer prices surge more than expected” (14 Aug 2025). Link
  3. UK ONS — “GDP monthly estimate, UK: June 2025” (14 Aug 2025). Link
  4. Reuters — “UK economy slows less than expected…” (14 Aug 2025). Link
  5. Eurostat — “Industrial production down by 1.3% in the euro area…” (14 Aug 2025). Link
  6. Reuters — “Euro zone industry shrinks more than feared in June…” (14 Aug 2025). Link
  7. Reuters — “China’s factory output, retail sales growth slump…” (15 Aug 2025). Link
  8. Reuters — “Trump’s tariffs: What’s in effect and what could be in store?” (11 Aug 2025). Link
  9. Reuters — “Trump’s higher tariffs hit major US trading partners…” (7 Aug 2025). Link
  10. Reuters — “Trump says he will set tariffs on steel and semiconductor chips…” (15 Aug 2025). Link
  11. Reuters — “Malaysia’s economy grows 4.4% y/y in Q2, slightly below forecast” (15 Aug 2025). Link
  12. Reuters — “Malaysia growth near forecast… BNM flags tariff uncertainty” (15 Aug 2025). Link
  13. Reuters — “Firms in Malaysia to boost tech, LNG purchases from US…” (6 Aug 2025) — notes the 19% rate effective Aug 8. Link
  14. Reuters (corrected) — “Malaysian pharmaceuticals, semiconductors exempt from US tariffs…” (1 Aug 2025). Link

🌍 Global Stock Markets Impacted

(Week of 11–17 Aug 2025, MYT)

United States (S&P 500, Nasdaq, Dow Jones)

Why affected:

  • U.S. inflation (PPI up 3.3% YoY) raised doubts about aggressive Fed rate cuts.
  • Higher inflation pressures typically hurt tech and growth stocks (Nasdaq most sensitive).

Expected effect: Volatility, with downside risk in tech/growth stocks, but banks and energy may benefit from higher yields and prices.

✅ Watch: Financials, Energy ⚠️ Risk: Technology, Consumer Discretionary

United Kingdom (FTSE 100, FTSE 250)

Why affected:

  • Q2 GDP (+0.3%) was better than forecast, supporting domestic stocks.
  • But exports to U.S. dropped 13.5%, which pressures global-facing companies.

Expected effect:

  • ✅ Positive for UK domestic sectors (retail, banks)
  • ⚠️ Weakness in export-heavy firms (manufacturing, autos, industrials)

Eurozone (DAX, CAC 40, Euro Stoxx 50)

Why affected:

  • Industrial output down 1.3% = bearish signal.
  • Germany (DAX) hit hardest due to dependence on industrial production.

Expected effect:

  • ⚠️ Weakness in German manufacturing, automotives, machinery
  • Defensive sectors (utilities, healthcare) could hold up better.

China & Asia (Shanghai Composite, Hang Seng, Nikkei 225)

Why affected:

  • China’s July slowdown in retail & industrial production spooked markets.
  • Trade tensions with U.S. over rare earths and tariffs add pressure.

Expected effect:

  • ⚠️ Weakness in consumer stocks, industrials
  • ✅ Support for AI, tech, high-tech policy-driven sectors
  • Hong Kong (Hang Seng) tends to move in tandem with China data.

🇲🇾 Malaysia (Bursa Malaysia – FBMKLCI, Technology Index)

Why affected:

  • Q2 GDP steady at 4.4% (supportive), but new U.S. 19% tariffs and possible 100% semiconductor tariffs pose big risks.
  • Malaysia is a major global semiconductor packaging & testing hub.

Expected effect:

  • ⚠️ Risk for E&E/semiconductor counters: e.g., INARI, MPI, Unisem
  • ✅ Tourism, consumer, and banking stocks may benefit from domestic demand resilience.

📊 Summary Table

Market Impact Drivers Likely Effect
US (S&P, Nasdaq) Hot inflation, Fed uncertainty Tech weakness, financials strength
UK (FTSE) Better GDP but exports slump Domestic stocks up, exporters down
Eurozone (DAX) Industrial contraction Auto/manufacturing pressured
China (Shanghai) Retail/industrial slowdown, trade tensions Weak consumer, resilient AI/tech
Malaysia (KLCI) 4.4% GDP growth vs US tariffs on semiconductors Tech counters at risk, banks/tourism supported