CN appears to be on track to meet the lower-end of GDP forecast

Asia market update: EUR opened lower on ‘violent’ French protests; US equity FUTs rebound after Fri’s rout, core gov’t bonds remain bid; CN appears to be on track to meet the lower-end of GDP forecast; Indonesia equities extend sharp selloff after MSCI comments; Trump offered further relief to Russia.

General trends and developments

- US equity FUTs have steadily improved after opening modestly lower, following Fri’s rout where the Nasdaq declined by 2.5%. During last week, the S&P 500 and Nasdaq indices recorded their worst weeks since late June [declined by 2% and 4.5% respectively]. After opening lower by 0.6%, Nasdaq FUTs have rallied by 1.3%, as of the time of writing.

- Interestingly, Oil FUTs have also extended losses thus far, as Trump continues to offer relief to Russia. After Friday’s NY close, U.S. President Trump signed an executive order waiving the imminent 500% tariff hikes on all Russian imports and tariffs of up to 100% on major buyers of Russian oil and gas, including China and India [while leaving existing sanctions imposed under earlier executive orders in place, under the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026]. Meanwhile, Iranian Foreign Minister Araghchi stated that Tehran’s seven-day proposal to reopen the Strait of Hormuz remains on the table. According to Araghchi’s Telegram channel, the Strait of Hormuz could reopen within six days if the U.S. meets Iran’s conditions, with continued talks resuming on the seventh day.[WTI crude futures re-opened the overnight session -0.1% lower at $98.89/bbl (vs. $99.02/bbl prior), while Brent opened -0.7% lower at $109.14/bbl (vs. $109.86/bbl prior].

- Large Chinese DRAM maker CXMT declined following 9M results and stock buyback announcement [Reported prelim 9-month Net (CNY) 131-132.5B v -528M y/y; Chair to buy back up to CNY2B in shares (Oct 16th)]. Over the weekend, DeepSeek unveiled an updated AI model which it claims has stronger benchmark performance and shorter outputs vs. the prior version. The model, which is called DeepSeek- V4.1-Flash-1017, is an upgrade to the V4.1 Flash model. According to DeepSeek, the latest model completes tasks 'faster' and generates shorter responses. The co. added the model's capabilities in game development and 3D modeling have also improved. The Chinese press argued that the model helps users work faster and at a 'lower' cost.

- Nationwide protests in France on Saturday evening escalated into what officials described as “unprecedented” levels of violence and ransacking of stores, urban landmarks in major cities. According to the French Interior Ministry, nearly 2,400 people had been arrested nationwide, including 855 in Paris. President Emmanuel Macron that night addressed the nation, asking “How can you do this to France?”, meanwhile granting regional authorities the authority to prohibit public gatherings. Financial markets reacted to the unrest, with the Euro opening lower against multiple currencies. In the bond market, German Euro-Buxl FUTs have also risen, along with UST FUTs.

- RBA Assist Gov of Financial Markets Kent acknowledged the rising market expectation for the RBA to leave rates unchanged in Nov after Sept jobs data disappointed. The market move after labour data made sense, according to Kent.

- China September Economic Data: China’s Q3 GDP expanded by +4.5% y/y (vs. +4.4% expected), with sequential growth of +1.2% q/q (vs. +1.0% expected). Year-to-date GDP growth through Sept reached +4.6%, with NBS stating the data was inline with the 2026 GDP target [4.5-5.0%]. China September Industrial Production remained strong by +5.5% y/y, driven by strong gains in equipment manufacturing +10.2%, high-tech manufacturing +14.3%, industrial robots +29.1%, lithium-ion batteries +39.5%, and 3D printing devices by +62.5% y/y. September Retail Sales increased by +1.1% y/y (vs. +0.5% expected), its strongest level since March, 2026. Furthermore, in the first three quarters, the total retail sales of goods and services increased by 2.6% y/y, among which, the retail sales of services increased by 5.0%, additionally, the 9M online retail sales of goods and services increased by +4.4% y/y.

- China September Fixed Urban Assets decreased by -7.2% YTD (vs. -7.2% prior), whilst China Aug YTD Property Investment decreased -20.6% and Residential Property Sales decreased by -13.7% y/y. Additionally, China September Surveyed Jobless Rate eased to 5.2% (vs. 5.3% prior). The NBS Press Conference stated that new growth engines such as high-end manufacturing & digital economy contributed to >40% of January-September economic growth, highlighting more positive changes YTD as the moderate recovery of prices is an important positive change in the economy this year. [**Reminder 10/13/2026: China September CPI increased to +0.9% y/y (vs. +1.0% expected), while China September PPI increased to a four-year high of +5.0% (vs. 4.4% expected), which widened the CPI-PPI gap.)].

- Bank of Japan (BoJ) Governor Kazuo Ueda maintained a hawkish tone from the sidelines of the IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand on Friday. He reiterated the BoJ stance of continuing to raise interest rates as underlying inflation approaches 2%, financial conditions remaining accommodative. Furthermore, he stated he exchanged views on various issues with Fed Chairman Warsh last week. Recall on Fri, Oct Fed rate hike probabilities declined as Warsh noted financial stability risks as he continued to avoid giving forward guidance. BOJ rate hike probabilities have also remained off of the prior highs. OIS is currently pricing in a 5.0% chance of a +25bp hike at the October meeting and an 81.5% probability of a hike by December (vs. 87.0% on Thursday). The next BoJ rate decision is scheduled for October 29-30th.

- Looking ahead this week (Asian-weighted focus, EST/EDT), key data releases include the CN PBoC 1-Year & 5-Year Loan Prime Rate Settings on Monday October 19th, ID BI Interest Rate Decision on Tuesday October 20th, KR BoK Interest Rate Decision on Wednesday October 21st, and JP September National CPI & Core CPI on Thursday October 22nd. Additionally, the Asia markets will observe holidays in Hong Kong on Monday, India on Tuesday and Thailand on Friday.
- US equity FUTs +0.8% to +1.3% during Asia trading.

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

- Sun Oct 18th: NZ Sept Trade Balance, (Sun night, CN Q3 GDP, CN Sept Industrial Production & Retail Sales & Unemployment Rate, CN NBS Press Conference).

- Mon Oct 19th: CN Sept FDI, CA Sept CPI & Core CPI, (Mon night, CN PBoC 1-Year & 5-Year Loan Prime Rate Settings, ID Q3 FDI, DE Sept PPI).

- Tue Oct 20th: US Sept Prelim Building Permits & Pending Home Sales, KR Sept PPI, (JP Sept Trade Balance, UK CPI & Core CPI, ID BI Interest Rate Decision).

- Wed Oct 21st: IN RBI Oct 5-7th Meeting Minutes, RU Sept PPI, US 20-Year Bond Auction, NZ Q3 CPI, (Wed night, KR BoK Interest Rate Decision, PH BSP Interest Rate Decision, HK Sept CPI, HK Sept Unemployment Rate).

-Thu Oct 22nd: EU Oct Preliminary Consumer Confidence, (Thu night, AU/JP/IN Oct Preliminary S&P/HCOB Mnfg/Svcs PMI, JP Sept National CPI & Core CPI, ID Sept M2 Money Supply, SG Sept CPI & Core CPI, TW Sept Industrial Production & Unemployment Rate, TW M2 & M3 Money Supply, EU Sept Car Registrations).

- Fri Oct 23rd: EU Preliminary Oct HCOB Mnfg/Svcs/Composite PMI, RU CBR Interest Rate Decision, US Preliminary Oct S&P Mnfg/Svcs/Composite PMI.

Holidays in Asia this week

- Mon Oct 19th: Hong Kong.

- Tue Oct 20th: India.

- Fri Oct 23rd: Thailand.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 Index opens +0.2% at 8,826.

-(AU) RBA Assist Gov Kent: Reasonable evidence that neutral rates are rising here and abroad - Fireside Chat with Christopher Kent, Assistant Governor (Financial Markets), at the Commonwealth Bank’s Global Markets Conference, Sydney.

-(NZ) New Zealand Sept Trade Balance (NZD): -1.97B v -1.54B prior.

-(NZ) New Zealand Sept Performance Services Index: 50.9 v 51.2 prior.

China/Hong Kong

-(CN) Shanghai Composite Index opens -0.6% at 3,694; (HK) Hang Seng Index closed for the "Chung Yeung Festival" holiday.

-(CN) China Q3 GDP Q/Q: 1.2% V 1.0%E; Y/Y: 4.5% V 4.4%E.

-(CN) China Sept Retail Sales Y/Y: 1.1% v 0.5%e [strongest y/y growth rate since Mar].

-(CN) China Sept Industrial Production Y/Y: 5.5% v 5.5%e.

-(CN) China Sept YTD fixed urban assets Y/Y: -7.2% V -7.3%E.

-(CN) China Stats Agency (NBS): China's economy shows more positive changes in Jan-Sept, problems in weak demand and complex international environment. Jan-Sept GDP growth is in line with full-year growth target - NBS Press Conference on China’s Economic Performance in September, 2026.

-(CN) China Aug YTD Property Investment Y/Y: -20.6% v -20.0%e.

-(CN) China Sept New Home Prices M/M: -0.1% v -0.2% prior.

-(CN) China Sept Surveyed Jobless Rate: 5.2% v 5.3% prior.

-(CN) China PBOC sets the yuan mid-point at 6.7208 v 6.7220 prior (strongest level since February 2nd, 2023).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY80B in 7-day Reverse Repos; Net injects CNY30B v injects CNY58B prior.

-(CN) DEEPSEEK.IPO The co. unveiled an updated AI model which it claims has stronger benchmark performance and shorter outputs vs. the prior version - US financial press [update].

-(CN) China news update: China Sept and Q3 data is due at 2 GMT; Mainland firms announce stock buybacks after recent equity declines.

Japan

-(JP) Nikkei 225 Index opens -1.0% at 64,660.

-(JP) Japan Aug Tertiary Industry Index M/M: -4.1% v -0.4%e.

-(JP) Bank of Japan (BoJ) Gov Ueda: Underlying inflation quite close to our 2% target.

-(JP) Japan PM Takaichi: Don't have any preset idea on whether government will compile extra budget. Plan to control at appropriate level issuance of JGB.

-(JP) Japan Econ Minister Kiuchi visits the controversial Yasukuni shrine - press [weekend update].

-(JP) 6503.JP Statement: Strategic alliance with Foxconn (former Hon Hai Precision Industries) for joint operation of automotive equipment business.

Korea

-(KR) Kospi Index opens -3.2% at 5,488.

-(KR) South Korea Fin Min Lee: Forecasts 2026 growth at 3.4-3.6% [vs. 3.0% prior] - Yonhap.

-(KR) South Korea sells 10-year bonds; Avg Yield: 4.155% v 4.510% prior.

-(KR) Bank of Korea (BOK) sells 3-month Monetary Stabilization Bonds (MSBs); Avg Yield: 3.190% v 3.180% prior.

Other Asia

-(ID) Indonesia's benchmark stock index falls by -4.9% to 4,930.241 at the 10:00am open, lowest level since early October 2020.

-(TW) Taiwan dollar weakens to 32.534/USD, lowest level since late April 2025.

-(MY) Malaysia Sept CPI Y/Y: 1.8% v 1.9% prior.

-(MY) Malaysia Sept Trade Balance (MYR): 33.70B v 28.09B prior.

-(MY) Malaysia's benchmark stock index falls as much as -0.9% to 1,593.37, lowest level since mid-September 2025.

-(MY) Malaysia co. Zetrix AI withdraws first interim dividend proposal; cites intention to preserve working capital amid 'unexpected' expenses.

-(TW) Taiwan Central Bank (CBC): Taiwan dollar's recent depreciation mainly reflects turmoil in international stock markets, with foreign investors net selling Taiwan stocks and repatriating funds, including dividend payouts.

-(ID) Indonesia Stock Exchange: Cuts lower auto-rejection limit to 7% from 15%.

-(ID) Follow up: Indonesia Stock Exchange leadership to meet MSCI on Monday - Official.

-(VN) Vietnam PM Le Minh Hung: Vietnam will aim to achieve at least 10% GDP growth in 2027 [weekend update].

-(TH) Thailand sells THB20B vs. THB20B indicated in 6-month bills; Avg Yield: 0.91016% v 1.01036% prior; bid-to-cover: 2.30x v 1.82x prior.

North America

-(US) Trump waives new Russia sanctions and tariffs under Graham Act, citing national interest [weekend update].

-(US) Sec of State Rubio: We will continue to look for opportunities to end the [Russia-Ukraine] war.

-(US) STARLINK.IPOUS threatens Europe over Starlink restrictions - FT [update].

-(US) ACN Seeking to sell China operations for up to $1.5B - FT.

-(US) MSFT Microsoft withdraws from UK data center deal with Nscale - Telegraph (update).

Europe

-(RU) Russia President Putin weighs a summit with US President Trump and China President Xi to decide Ukraine's fate - WSJ.

-(UR) Ukraine Pres Zelenskiy: Ukraine and US teams held talks on Friday; A trilateral leaders meeting could potentially occur at G20 summit (Dec 14-15th); Starlink speed restrictions still limiting Ukraine defenses [weekend update].

-(UR) Ukraine Pres Zelenskiy: Russia attacked Ukrainian energy, oil and gas sectors 76 times over past week. Trump is pushing Ukraine to capitulate to Russia - (update).

-(EU) ECB's Rehn (Finland): There is no sign of second-round effects, but we will stay vigilant because they might creep in quietly [weekend update].

-(EU) Euro declines by >0.2%, violent protests in France have been cited.

-(RU) Romanian Defense Ministry: Our F-16 fighter jets shot down two drones above Romanian territorial waters [weekend update].

-(UK) Oct Rightmove House Prices M/M: 1.0% v 0.7% prior: Y/Y: -0.1% v -0.8% prior.

-(UK) BCS BoE scrutinizes Barclays over claim traders misrepresented private credit exposure - FT.

Middle East

-(IR) IRGC: Tanker carrying 2M bbl of crude that was attempting 'illegal' transit of the Strait of Hormuz caught fire after hitting a mine [weekend update].

-(SA) Saudi-led Coalition: Intercepted and destroyed 4 drones launched towards Riyadh and Saudi Arabia's eastern and southern regions [weekend update].

-(SA) Saudi Civil Defense issues alert over potential danger in Jazan - post on X.

-(IL) Israel Q2 Final GDP (3rd reading) Y/Y: 15.4% v 14.9% prelim.

-(IL) Follow-up: Flight from Tel Aviv to Vienna has made an emergency landing after bomb threat - Sky News.

Levels as of 01:20 ET

Nikkei 225 -0.7%; ASX 200 +0.4%; Hang Seng +0.5%; Shanghai Composite +0.1%; Kospi +0.4%.

Equity S&P500 Futures +0.8%; Nasdaq100 +1.3%; DAX -0.2%; FTSE100 -0.1%.

EUR 1.1235-1.1182; JPY 158.15-157.70; AUD 0.6978-0.6953; NZD 0.5663-0.5650.

Gold +0.2% at $4,175/oz; BTC +1.1% at $82,659; WTI Crude Oil -1.6% at $97.45/bbl; Copper +0.7% at $6.6083/lbs.