Brazil Seizes China Soybean Market Share as U.S. Exports Stall Amid Trade Tensions

Economic

Commodity

Summary:

U.S. soybean exporters risk losing billions in sales to China this year as prolonged trade disputes and high tariffs push Chinese buyers to secure key seasonal supplies from Brazil, even during the U.S.’s prime export window....

Brazil Captures the U.S. Seasonal Advantage

Chinese importers have already booked around 8 million metric tons of soybeans for September shipment entirely from South America and about 4 million tons for October, half their monthly requirement, traders told Reuters. This purchasing pattern is significant because September–January is traditionally the U.S.’s peak shipment season before Brazil’s harvest comes online. Last year, China sourced roughly 7 million tons from the U.S. over the same two-month period, but this year’s advance bookings suggest that Brazil is absorbing much of that market share.

Analysts, including Wang Wenshen of Sublime China Information, see China’s heavy third-quarter buying as a deliberate move to build inventory ahead of potential fourth-quarter supply disruptions. With Chinese soybean imports hitting record highs in recent months, this stockpiling strategy reduces Beijing’s immediate reliance on U.S. shipments and minimizes exposure to ongoing trade uncertainty.

Impact on U.S. Prices and Export OutlookThe absence of Chinese demand at the start of the U.S. crop year in September could weigh further on Chicago Board of Trade soybean futures, which are already trading near five-year lows. Traders say that without Chinese participation, U.S. exporters will face a narrower sales window, adding pressure to find alternative markets before Brazilian supplies dominate early 2026.

Trade Policy as the Key Bottleneck

While U.S. soybeans for October shipment are about $40 per ton cheaper than Brazilian cargoes before tariffs, China’s 23% duty keeps them uncompetitive. President Donald Trump recently urged China to quadruple its soybean purchases ahead of a tariff truce deadline a target analysts call unrealistic without a duty cut, as it would require China to source almost exclusively from the U.S. Although the two sides extended their truce by 90 days, traders see little incentive for Chinese buying until tariff relief is agreed.

If Washington and Beijing reach a tariff-reduction deal by November, analysts such as Johnny Xiang of AgRadar Consulting say China could return to the U.S. market, potentially extending the U.S. export window and pressuring Brazil’s forward sales. Until then, Brazil’s position as China’s primary supplier even in months that traditionally favor U.S. exports underscores how trade policy, rather than price competitiveness, is driving global soybean flows in 2025.

Source: Reuters

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Economic

Doubts Over “Underlying Inflation” as Policy Anchor

BOJ Governor Kazuo Ueda has used “underlying inflation” a loosely defined measure focusing on domestic demand and wage-driven price growth to justify a cautious stance on rate hikes. However, there is no single standardized indicator for this concept, making it vulnerable to criticism. This ambiguity has drawn fire from both outside observers and members of the BOJ’s own policy board, who argue that with headline and core inflation already above the 2% target for more than three years, the bank’s messaging should pivot toward actual price trends, the output gap, and inflation expectations.

At the July policy meeting, some board members expressed concern that second-round price effects where cost increases become embedded in corporate pricing behavior and public expectations are taking hold. With headline consumer inflation at 3.3% in June, driven by an 8.2% surge in food prices, these members urged a shift toward highlighting upside risks to prices and framing communication around the likelihood of sustaining 2% inflation. Government economic council members have echoed these concerns, warning that prolonged price pressures are eroding household purchasing power and raising inflation expectations, suggesting monetary policy could be falling behind the curve.

Policy Context and Trade-Related Shifts

The BOJ ended its ultra-loose monetary policy last year, raising short-term rates to 0.5% in January. Its next move has been complicated by the economic impact of higher U.S. tariffs, which led to a downgrade in growth forecasts in May. However, a July trade agreement with the U.S. has improved the BOJ’s economic outlook. Several board members Naoki Tamura, Hajime Takata, and Junko Koeda have warned that sustained food price increases could broaden inflation further, making the case for tighter policy.

While some members still see “underlying inflation” as a valuable guiding concept, the fact that others are openly questioning it signals a gradual policy recalibration. Analysts, including Naomi Muguruma, suggest the BOJ may begin phasing out references to the metric as it prepares for its next rate hike possibly as early as October. This change would mark a shift toward communication aligned more closely with observable inflation data, potentially clearing the way for a series of gradual hikes into 2026.

Source: Reuters

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Blue River

Economic

Forex

Technical Analysis

The EURUSD pair strengthened to 1.1682. Statistics and concerns over the Federal Reserve’s independence weigh on the USD. Find out more in our analysis for 13 August 2025.

EURUSD forecast: key trading points

● The EURUSD pair is moving upwards while signals for the US dollar remain weak

● Investors expect the Fed to cut rates by 25 basis points in September

● EURUSD forecast for 13 August 2025: 1.1697

Fundamental analysis

The EURUSD rate rose to 1.1682 in the middle of the week. Fresh US inflation data strengthened expectations for a Fed rate cut next month.

July consumer inflation remained flat at 2.7%, below the forecast of a rise to 2.8% due to tariffs, while the core figure climbed to 3.1%, the highest in six months.

Fed funds futures now price in a 94% probability of a 25-basis-point rate cut in September. The market does not rule out another similar move before the end of the year.

Additional pressure on the US dollar came after White House Press Secretary Karoline Leavitt stated that President Donald Trump is considering suing Federal Reserve Chairman Jerome Powell over his actions during the renovation of the Fed’s headquarters. This sparked concerns about the Fed’s independence.

The EURUSD forecast is positive.

EURUSD technical analysis

On the H4 chart, the EURUSD pair remains in an upward phase and is hovering within the 1.1620-1.1690 range after recovering from late-July lows near 1.1500. The nearest resistance level stands at 1.1697, and a breakout above it would open the way towards 1.1789. Support levels are at 1.1588 and 1.1526.

The price is near the upper Bollinger Band, indicating elevated volatility and overbought conditions. The Stochastic above 80 confirms the risk of a short-term correction. The MACD indicator remains in positive territory, with its lines pointing upwards, indicating sustained bullish momentum.

Summary

The EURUSD pair continues to rise, holding within an upward trading channel. The EURUSD forecast for today, 13 August 2025, suggests an extension of the buying wave towards 1.1697.

Source: RoboForex

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MarketPulse by OANDA Group

Economic

Stocks

Technical Analysis

Since the recent one-week slide of -5.8% seen on the Hong Kong 33 CFD Index (a proxy of the Hang Seng Index futures) from 24 July 2025 high to 1 August 2025 low, its price actions have been choppy as markets grappled with US tariffs news flow and the possibility of an imminent US Federal Reserve dovish pivot in September.Amid this chaotic news flow environment, several technical elements are advocating the potential start of a new short-term bullish trend for the Hong Kong 33 CFD Index.

Fig. 1: Hong Kong 33 CFD Index minor trend as of 13 Aug 2025 (Source: TradingView)

Fig. 2: Percentage of Hang Seng Index component stocks above 200-day MA as of 12 Aug 2025 (Source: MacroMicro)

Preferred trend bias (1-3 days)

Bullish bias above 24,915 short-term pivotal support, with the next intermediate resistances coming in at 25,520, 25,750, and 25,890 (see Fig. 1).

Key elements

● The price action of the Hong Kong 33 CFD Index staged a bullish breakout above its 20-day moving average on Tuesday, 12 August, which suggests the potential start of a new short-term bullish impulsive uptrend phase.

● The medium-term and major uptrend phases remain intact for the Hong Kong 33 CFD Index as price actions continued to oscillate within a major ascending channel from the January 2024 low and a medium-term ascending channel from the 2 June 2025 low.

● The hourly MACD trend indicator of the Hong Kong 33 CFD has continued to trend steadily upwards above its centerline since Tuesday, 12 August, which supports the emergence of a new short-term bullish impulsive uptrend phase.

● Market breadth of the Hang Seng Index has also improved as the percentage of its component stocks trading above their respective key 200-day moving averages has increased from 1 August print of 82% to 88% as of Tuesday, 12 August (see Fig. 2).

Alternative trend bias (1 to 3 days)

Failure to hold at the 24,915 key short-term support negates the bullish tone to reinstate another round of minor choppy corrective decline sequence to retest the next intermediate supports at 24,790/24,725 and 24,600.

Source: OANDA

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Gerik

Economic

Record Inflows to ex-U.S. Equity Funds

July marked a decisive month for international diversification, with global ex-U.S. equity funds attracting their largest monthly inflow since December 2021. The $13.6 billion inflow contrasted sharply with $6.3 billion in outflows from U.S.-focused equity funds, the third consecutive month of redemptions. The shift began earlier in 2025, but July’s data reflects an acceleration as investors weigh relative performance, valuation gaps, and policy divergence between the U.S. and other markets.

President Donald Trump’s economic policies particularly on trade have dampened the appeal of U.S. assets. While tariff de-escalation provided short-term relief in the second quarter, upcoming trade deadlines and unresolved negotiations in early Q3 are sustaining uncertainty. Derek Izuel of Shelton Capital Management notes that narrowing growth differentials and the prospect of continued Fed policy restraint could further encourage reallocations away from U.S. equities.

Performance and Valuation Disparities

Performance gaps are reinforcing the flow trend. Year-to-date, the MSCI Asia Pacific ex-Japan index has gained around 14%, and MSCI Europe has surged more than 19%, both outpacing the S&P 500’s 7.2% rise. A roughly 10% decline in the U.S. dollar has further boosted foreign-market returns for U.S.-based investors. Valuation metrics strengthen the case: the forward 12-month P/E ratio for the MSCI U.S. index stands at 22.6, significantly above MSCI Asia’s 14.4, MSCI Europe’s 14.2, and the MSCI World’s 19.7.

While some see the moves as potentially marking a longer-term allocation change, others caution against overinterpreting the flows. Jim Smigiel of SEI frames the shift as a rebalancing toward neutral geographic exposure rather than a deliberate underweight to U.S. equities. Nonetheless, if U.S. growth underperforms relative to expectations or monetary policy remains tight, the combination of higher valuations and stronger performance abroad could sustain momentum toward non-U.S. markets.

This reallocation trend underscores that, in the current macro environment, relative valuations, currency moves, and regional growth prospects are playing a more influential role in shaping global equity capital flows than they have in years.

Source: Reuters

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Gerik

Economic

From Export-Led Growth to a Multi-Engine Strategy

Vietnam’s rise from a low-income nation in 1990 to a global manufacturing hub has been driven by low-cost, export-oriented industries. Its GDP per capita (adjusted for local prices) has surged more than thirteen-fold to $16,385. Yet the government recognizes that this model powered by cheap labor, foreign direct investment, and assembly-based exports faces diminishing returns as wages rise and global trade tensions intensify.

U.S.–Vietnam trade relations underscore both opportunity and vulnerability: a record $123.5 billion trade surplus with the U.S. in 2024 triggered tariff threats from the Trump administration, resulting in a 20% levy on most Vietnamese goods and double that on suspected transshipments. While Hanoi managed to negotiate terms comparable to regional peers, the episode reinforced the need to upgrade its economic base beyond low-margin manufacturing.

High-Tech, Green Energy, and Infrastructure as Growth Pillars

Following the path of earlier Asian tigers but avoiding reliance on a single flagship industry, Vietnam is placing “multiple big bets” across high-tech manufacturing, AI, renewable energy, and advanced infrastructure. Planned investments include a $67 billion North–South high-speed rail, nuclear power plants, and new logistics corridors. The country also aims to establish financial hubs in Ho Chi Minh City and Danang, offering streamlined regulations, fintech incentives, and expedited dispute resolution to attract global capital.

A significant break from past economic doctrine came in May with Resolution 68, naming private enterprises as the “most important force” in the economy. The state is merging ministries, eliminating lower-tier bureaucracies, and consolidating 63 provinces into 34 to create stronger regional talent pools. Private firms will now be eligible for mega-project bids, priority in government contracts tied to innovation, and improved access to financing steps designed to nurture “national champions” capable of competing globally. By 2030, Vietnam intends to elevate at least 20 domestic firms to world-class scale, though resistance from state enterprise stakeholders could slow momentum.

Demographic Headwinds and Climate Imperatives

Vietnam’s demographic dividend will close by 2039, with its labor force peaking shortly after. Without policy adjustments, productivity could decline while care burdens increase, particularly for women. The government is expanding preventive healthcare, raising the retirement age, and promoting female labor force participation to offset workforce shrinkage.

Climate change poses an equally pressing threat: typhoon damage, rising sea levels, and flooding could cost the economy up to 14.5% of GDP annually by 2050. Industrial parks are beginning to adopt flood resilience measures, recognizing that climate adaptation is not only environmental policy but also a prerequisite for sustaining investment and export competitiveness.

Vietnam’s transformation strategy hinges on balancing reform speed with political consensus, securing foreign investment while reducing vulnerability to external shocks, and managing the twin pressures of demographic aging and environmental risk. If it can execute across these fronts, Vietnam could emerge as the next diversified, innovation-driven Asian growth engine one whose success rests on agility, institutional modernization, and the ability to turn structural challenges into competitive advantages.

Source: Reuters

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Economic

Tariffs as a Structural Trade Force

Global merchandise exports totaled USD 23.8 trillion in 2023, with the top 30 exporting nations and territories accounting for USD 19.7 trillion. Beneath these headline figures, the composition of trade is undergoing a strategic reconfiguration as tariffs evolve from a defensive economic measure into a geopolitical instrument. The latest large-scale U.S. tariff announcement delayed in implementation until early August underscores how policy uncertainty is becoming embedded in the global trade environment, influencing not only corporate supply chain decisions but also capital allocation strategies.

China remains the dominant global exporter, shipping USD 3.38 trillion in goods last year, outpacing the U.S. by 67%. Yet, its leadership is increasingly contested as U.S. tariffs target critical Chinese export sectors such as electronics, machinery, and consumer goods. This pressure is accelerating the diversification of manufacturing and export capacity toward other markets, where geopolitical alignment with major economies is stronger and operational risks are perceived to be lower.

Vietnam’s Strategic Positioning

Vietnam, along with India and Mexico, has become a prominent destination for trade diversion and “friend-shoring” strategies. Its integration into regional supply chains, competitive labor costs, improving infrastructure, and network of free trade agreements give it leverage to capture market share vacated by China in certain categories. This shift is reinforced by foreign direct investment flows seeking both production efficiency and geopolitical safety.

Japan, South Korea, Taiwan, and ASEAN economies remain critical to the global manufacturing ecosystem, with aggregate Asian export strength expanding even as trade lanes fragment. This resilience is supported by industrial policy, cross-border infrastructure projects, and deep regional trade agreements. In contrast, the U.S. export mix focuses on high-value sectors semiconductors, aerospace, pharmaceuticals, and energy leaving it more exposed to potential retaliation when tariffs disrupt global supply linkages.

European and Resource-Driven Trade Models

Europe retains significant export capacity, with Germany, the Netherlands, France, Italy, and the UK leading the bloc. However, Germany’s manufacturing model faces headwinds from high input costs, demographic shifts, and a shrinking trade surplus. In the Middle East, the UAE and Saudi Arabia are climbing the rankings on sustained energy exports, while Brazil and Australia continue to anchor their trade profiles in commodity shipments.

The emerging trade order is defined less by seamless globalization and more by politically aligned “reglobalization.” Export resilience now depends not only on scale and efficiency but also on the reliability of trade partners and the security of supply routes. For investors, this means focusing on trade share dynamics, strategic positioning in global value chains, and the physical and political infrastructure that underpins export growth.

In this environment, Vietnam’s role is not just a statistical rise in export rankings it represents a structural repositioning in the global trade system, where economic performance is increasingly measured against criteria of durability, security, and geopolitical compatibility rather than pure cost efficiency.

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