The Levels Letter – Morning Edition – Market News – 12 August 2025

2nd Version | Wednesday, August 12, 2025

Asia-Pacific Danger-On Tone to Set the Stage for London Forward of CPI,  Key Focus:  Asia-Pacific handover, London open positioning, U.S. CPI danger occasion

📌Asia-Pacific Session – Optimistic Handover, Danger-On Sentiment

The risk-on bias in Asia-Pacific fairness markets is delivering a constructive handover to Europe, pushed by resilient company earnings momentum, stabilising commerce sentiment, and selective capital inflows into cyclical sectors.

• Nikkei 225: +2.45% — Broad-based positive factors, with industrials and know-how main on stronger export demand expectations.
• Nifty 50 (India): +0.91% — Home consumption resilience and overseas shopping for underpinning the transfer.
• S&P/ASX 200 (Australia): +0.13% — Financials and power offsetting softer supplies efficiency.
• Dangle Seng (Hong Kong): –0.10% — Revenue-taking in property shares overshadowing energy in large-cap tech.

This backdrop positions the London open to observe the optimistic directional lead from Asia by way of the morning session, notably in cyclicals and exporters.

📌London Open — Asia’s Momentum in Management Till CPI

With U.S. CPI information scheduled for 14:30 (+2 GMT), the London session is predicted to initially commerce on the Asia-Pacific impulse:

1. Directional Lead: Danger-on sentiment and constructive flows from Asia prone to carry over into Europe’s early hours.
2. Sector Rotation: Power anticipated in industrials, exporters, and power names; defensives could lag within the first half of the day.
3. Pre-CPI Danger Administration: Approaching noon, buying and selling exercise could average as individuals sq. positions forward of the U.S. information.

Base Case: Optimistic open with regular danger urge for food sustained by way of the London morning.
Danger Case: Any deterioration in geopolitical sentiment or sudden macro headlines may dampen the Asia-led momentum earlier than the CPI launch.

📌U.S. CPI — The Defining Catalyst for the U.S. Session

• Consensus: Headline CPI +2.8% YoY; Core CPI +0.3% MoM.
• Market Pathways:
  • Under Consensus: Fuels expectations for a September Fed lower; potential acceleration in Russell 2000 and cyclical fairness outperformance.
  • Above Consensus: Delays easing expectations; seemingly rotation again to defensives, pressuring higher-beta indices and commodities.

Given its timing, Europe will probably be open for the primary wave of response, with the London afternoon probably experiencing abrupt reversals relying on the print.

Index & Asset Watch

📌Key Takeaway

The risk-on posture in Asia-Pacific is predicted to be the first driver of European fairness path into the London noon, after which U.S. CPI at 14:30 (+2 GMT) turns into the dominant catalyst shaping international flows into the U.S. shut.