Bessent talked strong USD, CNY continues to strengthen

Asia market update: Headlines continue to be dominated by Trump/Xi speculation, bond yields and oil prices; Cautious trading again prevails ahead of key Fed and BOJ decisions; Bessent talked strong USD, CNY continues to strengthen.

General trend and developments

- WTI crude FUT have dipped below $105/bbl. Even still, concerns and uncertainty about the potential for Saudi oil supply disruptions won’t dissipate. Reportedly, Saudi Arabia has informed some European oil refiners that Sept's loading crude cargoes are cancelled due to the East-West pipeline closure [press].

- With prior reports suggesting the PBOC still has room to ease, Gov Pan Gongsheng has continued to pledge to improve short-term interest rate adjustment mechanism, as the central bank looks to strengthen the transmission of monetary policy. The latest comments from Pan follow more disappointing macro data from China, including the retail sales and FAI for Aug.

- Interestingly, the PBOC continues to fix the Yuan stronger ahead of the expected Trump/Xi summit. China and the US are reportedly discuss cutting tariffs on agriculture and energy products, as China has previously stated negotiators are striving to implement reciprocal tariff reductions on $30B of goods at an early date [Sept 10th]. Recall back in May, US Pres Trump and China Pres Xi were reportedly weighing tariff cuts on $30B of imports. Besides trade, AI governance is expected to be discussed between Trump and Xi. Hence, Nvidia’s CEO will reportedly attend President Trump's next week state dinner for China's President Xi [CNBC]. China Pres Xi is, also, expected to bring a large CEO delegation on US visit.

- Ahead of Wed US Fed decision, Treasury Secretary Scott Bessent, in a House testimony, affirmed the dollar’s strength as a product of policy certainty across regulation, tax, trade, and energy, pointing to rising dollar transaction volumes and attributing the drop in dollar reserves mainly due to China and Russia. Bessent also highlighted successful Treasury buybacks and two of the strongest auctions in two decades, attributing rising bond yields primarily to global factors—including higher oil prices— and deficit concerns, stressing that a 3% fiscal deficit-to-GDP target remains important for the U.S. debt trajectory that would enable eventual debt pay-down.

- As Bessent attempted to address the concerns regarding the USD and bond yields, UST auctions have become more expensive. Hence, the U.S. fiscal situation collided with market reality as the $13B 20-year Treasury auction priced at a 5.420% yield (vs. 5.204% prior), which was the highest level since 1986. This development underscores the persistent upward pressure on long-term yields amid the fiscal deficit debate.

- Japanese Prime Minister Sanae Takaichi confirmed the much stated cabinet reshuffle for [tomorrow] Thursday, September 17, 2026 (local time). This will be her first cabinet reshuffle since taking office in October 2025. Key figures expected to retain their posts include Economy Minister (economic revitalization/economic security) Minoru Kiuchi, Finance Minister Satsuki Katayama, Defense Minister Shinjiro Koizumi, and Foreign Minister Toshimitsu Motegi. LDP Secretary-General Shunichi Suzuki is also set to stay on. Meanwhile, attention is on potential changes such as a possible replacement for the Education Minister and the inclusion of a cabinet role for the Japan Innovation Party (Ishin) member Hiroshi Nakatsuka, as the party seeks a special mission post to strengthen the coalition.

- Hynix’s South Korea labor union accepted wage offer after the second vote. The new offer raises the cash component of the special bonuses, while the equity share was reduced.

- NZ’s Q3 consumer confidence surged ahead of Q2 GDP release on Thursday. Despite the sharp rise in confidence, the index remains ‘pessimistic’ amid higher fuel costs and interest rates. Meanwhile, RBNZ Assistant Gov Silk has become the latest MPC member to depart early. Back in 2025, former RBNZ Gov Orr and ex-Chairman Quigley, also, quit. Australia’s Aug Westpac Leading index declined into negative territory on factors including continued housing market concerns. Australia’s Aug Westpac Leading index declined into negative territory on factors including continued housing market concerns.

- Looking ahead this week (Asian-weighted focus, EST/EDT), key data releases include the much-anticipated US FOMC Interest Rate Decision on Wednesday September 16th, and the JP August National CPI & Core CPI followed by the BoJ Interest Rate Decision on Thursday September 17th.
-US equity FUTs +#% to +#% during Asia trading.

Looking ahead (Asian-weighted focus, using EST/EDT time-zone)

- Sun Sep 15th: BRICS Summit, (Sun night, JP July Industrial Production, HK Q2 Industrial Production & PPI).

- Mon Sep 14th: CN Aug New Yuan Loans & Total Social Financing & M2 Money Stock, IN Aug CPI, (Mon night, KR Aug Trade Balance, CN Aug Retail Sales & Industrial Production/Fixed Asset Investment & Unemployment Rate, CN NBS Press Conference, KR July M2/M3 Money Supply).

-Tue Sep 15th: IN Aug Trade Balance, CN Aug FDI, EU July Trade Balance & Sep ZEW Economic Sentiment, US 20-Year Bond Auction, NZ Q2 Current Account, (Tue night, JP Aug Trade Balance).

- Wed Sep 16th: EU July Industrial Production, IN M3 Money Supply, US Aug Retail Sales, RU Aug PPI, US FOMC Interest Rate Decision, US FOMC Press Conference, BR BCB Interest Rate Decision, NZ Q2 GDP, (Wed night, SG Aug Trade Balance & Unemployment Rate, TW CBC Interest Rate Decision, HK Aug Unemployment Rate).

- Thu Sep 17th: EU Aug CPI & Core CPI, UK BoE Interest Rate Decision, US Aug Preliminary Building Permits & Housing Starts & Pending Home Sales, UR NBU Interest Rate Decision, KR Aug PPI, NZ Aug Trade Balance, (Thu night, JP Aug National CPI & Core CPI, JP BoJ Interest Rate Decision, MY Aug CPI & Trade Balance, DE Aug PPI, JP BoJ Press Conference).

- Fri Sep 18th: ECOFIN Meetings, US Aug Industrial Production & Manufacturing Production & Capacity Utilization Rate, AR Aug Trade Balance & Budget Balance.

- Sat Sep 19th: ECOFIN Meetings.

Holidays in Asia this week

-Mon Sep 14th: India.

-Wed Sep 16th: Malaysia.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 Index opens +0.3% at 8,699.

-(NZ) RBNZ: Assistant Governor Karen Silk to depart role in mid-December - Statement.

-(AU) Australia Aug Westpac Leading Index M/M: -0.0% v +0.0% prior.

-(AU) Australian Speaker of House of Representatives will lead a delegation to visit China from September 18th-22nd - Xinhua.

-(AU) Australia Competition Regulator (ACCC): Mazda, Kia, and BYD improve access to service and repair information after ACCC investigations.

-(AU) Australia sells A$1.0B v A$1.0B indicated in 3.75% Apr 2037 bonds ; Avg Yield: 5.3910% v 4.9738% prior; bid to cover 3.85x v 3.02x prior.

-(NZ) New Zealand Q3 Westpac Consumer Confidence 89.5 v 80.4 prior [US market close].

-(NZ) New Zealand Q2 Current Account Balance (NZD): -1.7B v -2.6Be.

-(NZ) New Zealand Aug Non Resident Bond Holdings: 58.9% v 58.9% prior.

-(NZ) New Zealand parliament passes India FTA legislation.

-(NZ) New Zealand dairy farmers face profit hit amid risks related to El Nino; notes the possible impact on margins - Press.

-(NZ) New Zealand National Party has proposed the break up of dominant grocery chain Foodstuffs - Press.

China/Hong Kong

-(CN) Shanghai Composite Index opens -0.1% at 3,862; (HK) Hang Seng Index opens +0.5% at 24,790.

-(CN) The 13th Beijing Xiangshan Forum [China's annual defense/security forum]: Global security governance must be strengthened; We must build an equal and orderly multi-polar world; Must find a new path to security featuring collaboration rather than confrontation - Beijing International Convention Center.

-(HK) Hong Kong Leader Lee: Hong Kong expects opportunities, challenges over next five years - Chief Executive’s announcement of the Hong Kong’s First Five-Year Plan and delivery of the 2026 Policy Address.

-(HK) Hong Kong releases its first five-year plan for economic and social development of the Hong Kong Special Administrative Region (2026-2030).

-(CN) China and the US are reportedly discussing cutting tariffs on agriculture and energy products – press [US market close].

-(CN) China PBOC Gov Pan Gongsheng: To improve short-term interest rate adjustment mechanism and further refine policy rates; To strengthen the role of policy interest rates.

-(CN) PBOC: Overseas investors held CNY3.19T in China bonds, including CNY2.03T in government bonds, at end-August.

-(CN) China launches new canal, the first of its kind since 1949; the article refers to the Pinglu Canal - SCMP.

-(CN) Declining China fuel inventories raise the probability of export curbs – US financial press.

-(CN) State-backed China Water Environment defaults on offshore loan - US financial press.

-(CN) China sells 30-Year Additional Bonds.

-(CN) China sells 1-month and 3-month bills.

-(CN) USD/CNY China PBOC sets the yuan mid-point at 6.7628 v 6.7670 prior (strongest level since February 3rd, 2023; PBOC strengthens the Yuan for the 6th straight session which is the longest streak since May 2025].

-(CN) China PBOC Open Market Operation (OMO): Sells CNY110B in 7-day Reverse Repos; Net injects CNY113B v injects CNY92B prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY600B in 1-day Overnight Reverse Repos.

-(HK) HK IPO market booms with >HK$360B raised; notes a total of 108 new stock listings as of Sept 15th – China Securities Journal.

Japan

-(JP) Nikkei 225 Index opens +0.1% at 63,513.

-(JP) Japan Aug trade balance: -¥1.106T V -¥1.058TE [4th consecutive monthly deficit amid Yen weakness].

-(JP) Japan Fin Min Katayama: Reiterated stance that would not rely on the issuance of deficit-covering bonds to fund the tax cut. To ensure market credibility reviewing both spending and revenue and would control debt issuance for full year [EU market close].

-(JP) Japan PM Takaichi: Confirms will reshuffle cabinet on Thursday; Will reshuffle cabinet personnel on Thursday [September 17th, 2026 - local time].

-(JP) Japan July Core Machine Orders M/M: -3.7% v -1.2%e; Y/Y: 11.2% v 9.6%e.

-(JP) Reportedly the US consider purchasing warships from Japan and South Korea to assist in potentially countering China - Nikkei.

-JP) Japan Economy Min Kiuchi is expected to remain in cabinet - Press.

-(JP) Japan sells ¥2.5T vs. ¥2.5T indicated in 12-Month Bills; Avg Yield: 1.5749% v 1.4332% prior; Bid-to-cover: 4.78x v 3.51x prior.

-(JP) BOJ Outright Bond Purchase Operation for 3~5 Years; 5~10 Years; >25 years; (Inline with planned amounts for Q3, 2026).

-(JP) Bank of Japan (BOJ) Results related to today's outright bond buying operations.

Korea

-(KR) Kospi Index opens -0.2% at 6,611

-(KR) South Korea cancels plan to report US investment plans to parliament on Thursday; the development could delay the signing of the investment MOU between Seoul and the US - Report.

-(KR) Bank of Korea (BOK) Aug Minutes: Saw member Hwang Kun-Il noted that needed more time to review if inflationary pressures were here to stay. Stronger KRW currency (Won) made financial conditions less accommative. Another member noted that needed to adjust timing of future rate hikes depending on inflation, recovery of energy supply chain [EU market close].

-(KR) 000660.KR SK Hynix South Korean Union approves tentative wage agreement in re-vote; the co. raised the cash portion of special bonuses from 40% to 50%; 57.1% of the union members voted in favor of the new agreement - Yonhap.

-(KR) Follow-up: South Korea is seeking to acquire a 15% stake in Westinghouse - South Korean press.

-(KR) South Korea Foreign Minister to meet with US counterpart on Friday [September 18th, 2026] - Yonhap.

-(KR) South Korea Finance Ministry announced revised rules for registered foreign institutions related to the ongoing efforts to make the Korean Won (KRW) freely convertible – Korea press.

-(KR) South Korea expands China routes by giving more flight rights to LCCs – Korea Times.

-(KR) South Korea Court orders North Korea compensation to South Korean Government for liaison office demolition worth KRW44.6B - US financial press.

-(KR) Bank of Korea sells KRW1.0T vs. KRW1.0T indicated in 4.15% 3-Year Bonds; Avg Yield: 4.15%.

Other Asia

-(TH) Thailand Fin Min Ekniti: Thai inflation seen staying within Central Bank target; Depreciation of the Baht helps the domestic economy - US financial press interview.

-(TH) Thailand sells total THB45B in 3-year and 20-year bonds.

-(ID) Indonesia cuts benchmark prices on low grade nickel ore - US financial press.

-(ID) Indonesia Trade Min Pangestu: Expects fiscal discipline from new Finance Minister.

-(ID) Indonesia FSA aims to form commodity exchange Icomex on September 17th, 2026; Considers trading start at commodity exchange on January 4th, 2027.

-(IN) India Chief Economic Advisor Nageswaran: India FY27 fiscal deficit could be near 4.3% [of GDP] - PTI.

-(IN) USD/INR India Central Bank (RBI) said to be likely selling USD through state-run banks to limit the Rupee weakness – traders.

-(VN) Vietnam Ministry said to warn about power supply shortage risk - Press.

-(SG) USD/SGD Singaporean dollar weakens to 1.2738/USD, lowest level since September 2nd, 2026.

North America

-(US) Treasury Sec Bessent: Raising bond yields are due to 'global issues'; Cites the rise of oil prices as reason for current 10-year yields - House testimony [US market close].

-(US) Treasury $13b 20-year bond auction draws 5.420% v 5.204% prior, bid-to-cover: 2.57 v 2.53 prior (highest yield since 1986) [US market close]

-(US) Sept EMPIRE Manufacturing: 7.6 V 15.0E [US market close].

-(US) US Senate Maj Leader Thune: Open to 'exploring' an export ban on diesel [US market close].

-(US) US Senate procedural vote fails to pass Digital Asset Market CLARITY Act; Vote was 50-49 [60 votes were needed for cloture in the procedural vote] [US market close].

-(US) Treasury Sec Bessent to meet Vice Premier He Lifeng in NY ahead of Trump-Xi summit on Sunday, September 20th, 2026 [inline] - FT.

-(US) Medicare is using AI to approve claims, the result has been 'alarmingly high denial rates' - Press.

-(US) US Coast Guard and the FBI said to have boarded an oil tanker [VL Prosperity] as part of a cybersecurity probe [timing uncertain] – US financial press.

-(US) TSLA During podcast interview Elon Musk teases the notion of a future Tesla/SpaceX merger [as has been speculated by Wall Street for some time] (update) [US market close].

-(US) META Reportedly plans to deploy new in-house Arke chips in H1 of 2027; Will roll-out next-gen Astrid chips at end of 2027 - press [US market close].

-(US) META CEO Zuckeberg becomes the latest to comment on AI governance and development; Notes every lab has the responsibility and incentive to move at a pace required to train its models safely - US financial press.

-(US) JBHT 18:20 ET Morgan conf: Expects Q3 earnings to decline 5–10% sequentially from Q2, despite “incredibly strong” demand; management characterized the pressure as a timing mismatch between immediately higher capacity costs and Intermodal pricing, which typically lags truckload by roughly two quarters—not an observed demand deterioration.

-(US) OPENAI.IPO Reportedly considers another fundraising round before debuting IPO at an EV of ~$1.2T - FT.

-(US) ANTHROPIC.IPO Trump advisers met with a top Anthropic executive to discuss AI safety - US financial press.

-(US) MSFT Raises quarterly dividend by ~8% to $0.98/shr from $0.91/shr; Payable Dec 10th; the implied yield is 0.78%, ex-dividend date is Nov 18th.

-(US) SPCX Comments: Postponing tonight’s Falcon 9 launch of USSF-259; Now targeting September 16th, 2026, for USSF-259 Falcon 9 launch.

-(US) NVDA CEO Jensen Huang reportedly attending President Trump's next week state dinner for China's President Xi - CNBC.

-(US) AI agent startup Instinct in discussions to raise $1B at a $10B valuation - The Information.

-(MX) US is reportedly pushing Mexico to accept new rules of origin for AI hardware exports, as well as potentially other consumer products such as medical appliances, similar to the rules of origin for automobiles; Trade talks could recommence as soon as next week; This comes in an effort to prevent Chinese and other foreign firms from circumventing tariffs - WSJ.

-(CL) Chile Central Bank Deputy Governor Naudon urges investors not to overlook the recovery of the Chilean economy - Interview.

-(ZA) US Sec State Rubio announces new visa restrictions for South Africa.

Europe

-(UR) Russian Def Min: Russian forces have struck an oil tanker at Ukraine's Port of Izmail [US market close].

-(EU) Euro Zone July Trade Balance: €5.0B v €1.0B prior; Trade Balance NSA (unadj): €14.2B v €8.6B prior [EU market close].

-(EU) ECB's Moulin (France): Inflation outlook justified recent ECB rate hike. Member States must take the necessary steps to reduce the budget deficit. Rise in long term rates was a global phenomenon due to increased supply and higher inflation expectations. France Debt Agency (AFT) had no problem to sell bonds; no difficulty raising funds [EU market close].

-(UK) Bank of England said to be poised to halt its sales of long-term government debt as soaring borrowing costs pile pressure on the Chancellor [EU market close].

-(UK) London Times Shadow MPC voted 7-2 to keep interest rates unchanged – Press [update].

-(UK) July ILO Unemployment Rate: 4.9% v 4.9%e [EU market close].

-(UK) UK PM Burnham expected have first meeting with Pres Trump in NY at UN Gen Assembly next week - press.

-(FR) France Aug Final CPI M/M: 0.7% v 0.7% prelim; Y/Y: 2.4% v 2.4% prelim [EU market close].

-(ES) Spain Aug Final CPI M/M: 0.7% v 0.7% prelim; Y/Y: 4.3% v 4.3% prelim [EU market close].

-(IT) Italy July Total Trade Balance: €8.2B v €4.3B prior [EU market close].

-(NO) Norway Aug Trade Balance (NOK): 100.4B v 88.8B prior [EU market close].

-(DE) Germany Sept ZEW Current Situation Survey: -47.1 v -52.1e; Expectations Survey: 34.7 v 40.0e [EU market close].

-(IE) Ireland Central Bank: Raises 2026 GDP: -1.4% vs. -2.7% prior; Cuts 2027 GDP; +4.3% vs. +6.5% prior; Raises 2028 GDP +4.3% vs. +4.0% prior.

-(RU) Russia announcement on upcoming OFZ bond issuance (held on Wed); to sell 2 tranches on Sept 16th.

Middle East

-(IR) VP Vance: The Iran war will enter a 'much different phase in the next couple of months;' Sides with Trump that the conflict will end 'right after' the midterms - NY Post interview [US market close].

-(SA) Saudi Arabia reportedly informed some European oil refiners that Sept's loading crude cargoes are cancelled due to the East-West pipeline closure - press [EU market close].

-(IR) Iranian Foreign Min Araghchi said to visit China on Wed, Sept 16th - press [EU market close].

-(IR) China's Foreign Minister Wang Yi held talks with Iranian counterpart Araghchi - Xinhua.

-(IR) Several explosions heard on Iran's Qeshm island - IRNA.

-(IR) Commodity vessels transiting via Strait of Hormuz remain in "single digits"; 4 vessels transited the strait on Tues v 7 prior - Shipping Data.

-(SA) Saudi-led Coalition [in Yemen]: Air defenses intercepted and destroyed Houthi-launched drone attempting to enter Mecca airspace [refers to events from Tuesday].

-(IL) US said to prepare selling ~$2.8B in 2,000lb bombs to Israel - Washington Post [US market close].

-(LY) Libya's NOC: May declare a force majeure if shut vale on the main Al-Hamada-Zawiya oil pipeline remains closed or other fields are forcibly shut [EU market close].

Levels as of 01:20 ET

Nikkei 225 +#%; ASX 200 +#%; Hang Seng +#%; Shanghai Composite +#%; Kospi +#%.

Equity S&P500 Futures +#%; Nasdaq100 +#%; DAX +#%; FTSE100 +#%.

EUR #-#; JPY #-#; AUD #-#; NZD #-#.

Gold +#% at $#/oz; BTC +#% at $#; WTI Crude Oil +#% at $#/bbl; Copper +#% at $#/lbs.