Directionless trading as markets await Bessent’s Iran-related press conference, Oil FUTs decline

Asia Market Update: Directionless trading as markets await Bessent’s Iran-related press conference; Oil FUTs decline; CAD modestly lower on negative trade surprise; BABA hit by dilution concerns, weighs on the TECH sector; Central bank speak in focus amid Jackson Hole [Aug 27-29th]; RBA minutes due on Tues.

General trend and developments

-Over the weekend, the separate bilateral trade talks between the United States and Canada surprisingly collapsed late on August 21st, 2026. As a result, the United States has imposed a 50% tariff on approximately $20 billion worth of Canadian imports under Section 338 (of the Tariff Act of 1930). Canada pledged to retaliate. Specifically, Canada pledged to ‘match’ the US tariffs ‘dollar for dollar’ [effective from Sept 8th] . Auto tariffs and lumber were previously seen as the sticking points in the US/Canada trade talks. Therefore, we ponder whether the breakdown raises the possibility that parallel U.S.-Mexico trade talks could also face delays, as Mexico has been pushing for lower auto tariffs, proposing to expand tariff-free content and reduce the top-line rate (currently 25% on non-U.S. content) to a lower figure (Note: The USMCA itself remains in force until its scheduled end in 2036 after the US declined a 16-year extension which would have run to 2042).

-Over the weekend, Iranian Parliament Speaker and lead negotiator Mohammad Baqer Qalibaf said in an X post that Tehran had received messages from neighboring countries regarding the formation of new regional security arrangements and expanded economic cooperation, signaling Iran’s push for a “homegrown, independent” regional order amid continued US economic and military pressure. Pakistan’s Army Chief is due to visit Tehran on Mon. Oman’s Foreign Minister will visit Tehran the following day.

-Bonds were quiet in Asia ahead of Bessent. Recall, US Treasury Sec Bessent is expected to outline the various economic sanctions against Iran at a press conference on Monday (timing is not clear). Markets had already been expecting strong non-military actions against Iran (Recall, Bessent had previously stated ‘we are soon going to apply measures that have never been seen on Iran in the history of economic isolation on a country’ [Aug 13th]). Importantly, Bessent added that large-scale combat operations against Iran are unlikely to resume.

-The 2026 Jackson Hole Economic Policy Symposium [hosted by the Federal Reserve Bank of Kansas City under the theme "Financial Innovation: Implications for Payments and Policy" will take place between Thursday, August 27th, through to Saturday, August 29th. The keystone of the conference will be Federal Reserve Chairman Kevin Warsh’s inaugural Jackson Hole keynote on Friday, August 28th, at 10:00am EDT (8:00am local time). Given ongoing inflationary pressures, the speech may carry potential hawkish implications, but markets could be volatile ahead of the speech given Warsh’s non-transparent approach, especially after last week’s UST volatility. Hence, traders are still divided about whether the Fed will raise rates in Sept [16th]. Warsh noted, previously, on July 29th that he had not yet begun drafting his remarks.

-Multiple BOJ speakers are expected to address the market ahead of the central banks’ next rate decision in Sept [17-18th]. Influential Dep Gov Himino is expected to speak in Japan later this week [Aug 27th]. Traders continue to view the BOJ’s Sept, Oct and Dec policy meetings as ‘live’, according to OIS rate hike probabilities. Any comments out of Himino on the policy outlook will likely to scrutinized, but he is not expected to pre-commit to any particular rate path. We are also interested to see if any BOJ officials will appear at the Fed’s Jackson Hole symposium. The guest list for the event is expected to be released later this week. BOJ Gov Ueda had attended the conference back in 2025. The symposium will feature significant international participation, including the Reserve Bank of New Zealand Governor Anna Breman and European Central Bank Executive Board Member Isabel Schnabel, who is scheduled to participate in a panel on Friday at 11:55 AM EDT (15:55 GMT), with additional attendee confirmations expected throughout the week.

-Meanwhile, Japan’s FY27/28 budget has, also, remained a focal point. According to recent reporting, the Finance Ministry is said to be considering setting the assumed interest rate at 3.8% [prior: 2.6%] for calculating debt servicing costs in FY27/28 budget request [Aug 21st]
-NZ Q2 retail sales became the latest macro data point hurt by fuel-sensitive components. Specifically, fuel retailing, motor vehicle and parts retailing, accommodation and food/beverage services helped drive the unexpected contraction in the data. The data is consistent with expectations that NZ GDP growth slowed during Q2. Recall, the RBNZ’s Q2 GDP Nowcast Estimate declined to +0.1% [from mid-Jul]. NZ’s Q2 unemployment rate had, also, hit the highest since 2015. The weak data could put less rate hike pressure on the RBNZ, perhaps.

-Alibaba’s $10B equity placement appears to have caught some investors off guard, as evidenced by the >7% share price decline, thus far on today’s session. Unsurprisingly, the proceeds of the offering are expected to be used primarily to fund the co’s AI infrastructure growth plans. Recall, Alibaba did raise some eyebrows when it reported a 75% y/y rise in its Q1 Capex [Aug 20th]. Similar investor scrutiny was seen after the recent earnings reports from Tencent and Baidu. Fitch had even downgraded Baidu ahead of its Q2 earnings report [Aug 13th].

-Other focal points for markets include the RBA’s August meeting minutes on Tuesday, August 25th, the BoK’s interest-rate decision on Thursday, August 27th, and the ECB’s monetary-policy accounts later that day.

-US equity FUTs -0.4% to -0.1% during Asia trading.

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

-Mon Aug 24th: TW July Unemployment Rate, (Mon night, MX Q2 GDP).

-Tue Aug 25th: KR Aug Consumer Confidence, SG Q2 Prelim GDP, AU RBA Meeting Minutes, JP BoJ Core CPI, TW July Industrial Production, HK Jul Trade Balance, (Tue night, US Jul New Home Sales & Building Permits, US Aug CB Consumer Confidence).

-Wed Aug 26th: AU Q2 Construction Work Done, SG July Industrial Production, TH BoT Interest Rate Decision, (Wed night, US July Core PCE, US Q2 GDP (2nd revision) & Prelim Personal Spending/Durable Goods Orders, RU July Industrial Production).

-Thu Aug 27th: KR BoK Interest Rate Decision, CN July Industrial Profit YTD, PH BSP Interest Rate Decision, (Thu night, ECB Monetary Policy Accounts, US Jackson Hole Symposium Begins, MX July Trade Balance).

-Fri Aug 28th: JP Aug Tokyo CPI & Core CPI, JP July Unemployment Rate, PH July Trade Balance, TH July Industrial Production, EU Aug Consumer Confidence, (Fri night, CA Q2 GDP, US Jackson Hole Symposium Fed Governor Warsh Speaks).

Holidays in Asia this week

-Tue Aug 25th: Indonesia, Malaysia.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens +0.5% at 9,099.

-(NZ) New Zealand Q2 Retail Sales Q/Q: -0.5% v +0.2%e.

-(NZ) New Zealand Treasury: 2026 net immigration may miss budget forecast.

-(NZ) New Zealand PM Luxon: Government will today introduce bill to ban children under-16 from social media - Statement.

China/Hong Kong

-(CN) Shanghai Composite opens -0.1% at 3,902; (HK) Hang Seng opens -0.9% at 25,780.

-(CN) China reaches 2026 growth target despite pressures - People's Daily [opinion piece].

-(CN) BABA Prices HK$80B placement of 710M shares at HK$112.70/shr; Expected to close Aug 26th, 2026.

- DeepSeek: Reportedly launches new multimodal model – press [from Aug 21st].

-(CN) China Media sees stock rebound ‘on track’ despite spike in UST yields – Shanghai Securities News.

-(CN) China's August 22-26th opening in Beijing of the 2nd World Humanoid Robot Games, with more than 2,000 robots - Xinhua [weekend update].

-(CN) China delays mission to find water in permanently shadowed craters near the South pole on the moon until next year, 2027 - US financial press

-(CN) China MOF sells 3 year, 10-year bonds.

-(CN) 688836.CN Follow up: Shares indicated down -7% at its lowest level since IPO debut.

-(CN) China PBOC sets the yuan mid-point at 6.7841 v 6.7817 prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY340B in 7-day Reverse Repos; Net injects CNY340B v injects CNY95B prior.

-(HK) SHEIN.IPO Prices HK IPO 280M Class B shares at HK$47.6-49.5/share for gross proceeds at approximately HK$13.12M; HK trading expected to begin at 09:00am on September 1st, 2026 - filing.

-(HK) 386.HK Reports H1 (CNY) Net [ex gains] 25.3B v 21.2B y/y, Rev 1.44T v 1.41T y/y - update.

Japan

-(JP) Nikkei 225 opens -0.1% at 66,045

-(JP) SEAJ: Japan Jul Chipmaking Equipment Billings Y/Y: +35.4% v +26.9% prior [weekend update].

-(JP) Bank of Japan (BoJ) releases results of its FY26 survey on the use and risk management of generative AI by Japanese financial institutions.

-(JP) Japan's Takaichi Cabinet approval rating rises +6.2ppt to 55.4% (v 49.2% prior) [ANN poll]; Japan's Takaichi Cabinet approval rating falls to 56% (v 57% prior) [Yomiuri poll]; Japan's Takaichi Cabinet approval rating falls to 41% (v 51% prior) [Mainichi poll].

-(JP) Japan's benchmark 10-year JGB FUTs down -0.14pts in early trade; Japan's benchmark 10-year JGB yields rises +1.5bps to 2.89%.

-(JP) Japan sells ¥250B vs. ¥250B indicated in 10-Year Climate Transition Bonds; Yield at lowest accepted price: 2.863% v 2.1950% prior, bid-to-cover 3.51x v 3.42x prior.

-(JP) Japan's Green Transformation (GX) Acceleration Agency invests in fusion, recycling startups for up to ¥20B (=$125M) in combined public-private funding deal - Nikkei.

-(JP) SFTBY Plans ¥1T (≈$6.30B) 7-year retail bond sale [record amount], as the conglomerate raises funds for its investment commitments to OpenAI - Filing.

Korea

-(KR) Kospi opens -0.5% at 6,881.

-(KR) South Korea sells KRW1.5T in 5-year bonds (4.125%); Avg yield: 4.085%.

-(KR) Bank of Korea to sell KRW600B v KRW600B indicated in 3-month Monetary Stabilization Bonds (MSBs) at Avg Yield: 2.965% v 2.710% prior.

Other Asia

-(SG) Singapore July CPI M/M: -0.2% v 0.0%e; Y/Y: 2.2% v 2.4%e.

-(TW) Taiwan cabinet seeks >$12.6B for extra spending in 2026 - Local press [update].

-(TW) Taiwan Navy is planning to conduct 2-week military drills during Sept - Press.

-(TH) Thailand Finance Ministry: Considers taxing gold transactions; To consider tax on gold trade, gold imports; To discuss tax with Gold Association this week.

-(ID) Indonesia President Prabowo: To revoke permits of firms behind forest fires.

North America

-(US) NVDA Has notified customers of price increases greater than 15% for AI-related products, effective on system shipments starting early next year - press [weekend update].

-(CA) US-Canada trade talks have collapsed; US imposes 50% tariffs on some Canadian products; Canada PM Carney says will match dollar for dollar with tariffs against US goods starting Sept 8th - CNBC [weekend update].

-(US) Pres. Trump: Canada wants the benefits of being a State, without being one!!! They have also charged our great fa...; When China President Xi comes to the White House, we'll be using the East room; Data centers provide 'tremendous' amounts of jobs and money; communities not taking data centers are making 'mistakes'.

-(US) Mark Walter [co-founder of Guggenheim Partners] Lieutenant was key to complex lending machine - WSJ.

-(US) NVDA Nvidia discusses Perplexity investment at $30B+ valuation - The Information.

-(US) OPENAI.IPO Exec: We're dropping API and credit pricing of GPT 5.6 Sol by over 20% for the next three months [weekend update].

-(US) ANTHROPIC.IPO Anthropic: The co's customers in the US are increasingly turning to cheaper AI alternatives - FT [weekend update].

-(US) PSKY Paramount and California state officials to hold prelim talks about Warner Bros deal on Aug 24th - NYT [weekend update].

-(US) LLY FDA grants orphan drug designation for pirtobrutinib as a treatment of primary immune thrombocytopenia [weekend update].

-(US) WBD California expected to seek Paramount TV Channel sales - WSJ.

-(US) DE UAW: Members of United Auto Workers at John Deere voted to reject company's proposal to extend current collective bargaining agreement through 2029.

-(US) Hugging Face working with banks to gauge interest of potential deal worth at least $13B - Business Insider.

-(CA) GM Canada's Unifor union: Have reached tentative agreement with GM covering 4,600 workers [weekend update].

-(MX) Mexico preparing the issuance of its multi-tranche Samurai bonds.

-(DRC) Democratic Republic of Congo: Number of confirmed Ebola cases rises to 5,514 (v 4,945 prior), including 2,642 (v 2,325 prior) deaths.

Europe

-(RU) Russia Pres Putin: Ukraine has opened 'Pandora's Box' with its attacks against economic targets - Russian press [weekend update].

-(RU) ROSN.RU Ukraine says it struck the Novokuybyshevsk Oil Refinery (capacity 176K bpd) in central Russia, causing a fire to break out at the facility [weekend update].

-(UR) Ukraine President Zelenskiy: Ukrainian air force requested 360 patriot missile interceptors for this Winter (update).

-(RU) OZON Logistics hub in Dagestan, Russia on fire following drone attack.

-(NO) Norway Government: Plans to give another NOK85B in support to Ukraine in FY27.

-(UK) PM Burnham has arrived in Kyiv, Ukraine on Monday (Aug 25th).

-(UK) SHEL.UK Draws interest from several companies in $8B US chemical assets sale - FT..

-(FI) Finland July PPI M/M: +0.1% v -0.7% prior; Y/Y: 6.9% v 6.7% prior.

-(KZ) Kazakhstan Pro-Presidential Party Adilet wins large majority in the snap election; cites exit polls - update.

-(TR) Turkey Central Bank (CBRT) to resume 1-week repo operations - update.

Middle East

-(IR) Treasury Sec Reiterates Bessent: Economic D-Day coming for Iran - writing in FT.

-(IR) Iran Parliament Speaker Qalibaf (lead negotiator): Have received messages from neighbors about shaping new security arrangements and economic cooperation [weekend update].

-(IR) Traffic through Strait of Hormuz skyrockets nearly 400%; cites analysts - NY Post [update].

-(IR) CENTCOM: US forces redirected 70 commercial vessels as of August 23rd [2026].

-(IR) Commodity vessel transit through the Strait of Hormuz <20 over the weekend - Data.

-(IR) Iran's Oil Minister: Iran has discovered over 7.5T cubic feet of gas in field south of Fars province [the timing is not certain]- State Media.

-(IR) Iran's Foreign Ministry Spokesperson: Oman Foreign Minister to visit Tehran, Iran on Tuesday (Aug 25th )- Statement.

-(IL) Israel PM Netanyahu: Warns Hamas of strikes if kites, balloons are fired - Statement.

-(SA) ARAMCO.SA Saudi Arabia in talks with London brokers about war risk insurance - FT.

-(QA) QatarEnergy issues tender to sell Sept and Oct crude loadings inside Hormuz - Press.

Levels as of 01:20 ET

Nikkei 225 -0.5%; ASX 200 +0.4%; Hang Seng -2.0%; Shanghai Composite -0.9%; Kospi -2.9%.

Equity S&P500 Futures -0.1%; Nasdaq100 -0.4%; DAX -0.1%; FTSE100 flat.

EUR 1.1688-1.1673; JPY 159.04-158.59; AUD 0.7177-0.7161; NZD 0.5983-0.5968.

Gold +0.8% at $4,639/oz; BTC +1.4% at $77,086; WTI Crude Oil -1.7% at $85.54/bbl; Copper -0.4% at $6.5512/lbs.