Nasdaq FUTs drop amid OpenAI model training pause

Asia Market Update: Nasdaq FUTs drop amid OpenAI model training pause; Trump said to reject Iran ceasefire proposal leaving markets directionless; Oil FUTs rise; China to increase US coal imports, PBOC resumes Yuan strengthening; US diesel export ban speculation continues to mount.

General trend and developments

-Nasdaq FUTs underperform. Over the weekend, OpenAI disclosed that it would pause training of its latest models after agents probed US government sites in unexpected ways.

-Oil prices have opened the week higher, as the US/Iran stalemate continues. Trump is said to have rejected Iran’s ceasefire proposal, according to a WSJ report released after Friday’s close. Even still, Trump has said he expects additional US/Iran talks this week. Separately, over the weekend, an incident was declared at RAF Fairford, which is a UK military base that has been used by the US in its campaign against Iran. Five men were, specifically, arrested on suspicion of Explosive Act offenses.

-BOJ Jul minutes set up hawkish Sept Summary of Opinion release on Thurs [Oct 1st]; According to the minutes, one member—likely dissenting member Takata, who voted against the 8-1 decision to maintain the policy rate at 1.00%—stated markets appear to expect the BoJ to raise rates roughly once every six months, but the pace could be faster, warning that term premia could rise if markets became concerned that the BoJ was not raising rates at an appropriate pace; Former Bank of Japan (BOJ) Official Momma noted a BoJ rate hike in October is a real possibility; 2-year JGB yield rises by >2bps.

-US and China confirmed last week’s trade developments. The US/China agreement including the list of products recommended for reduced tariff treatments as well as a launched AI dialogue was released by the White House earlier today, the $30B vs. $30B two-way reciprocal tariff cut was agreed with coal being the standout in the tariff reduction plan. Rare earths, however, remains an area of uncertainty. Chinese coal FUTs declined.

-China's Ministry of Industry and Information Technology (MIIT) is said to have told certain Chinese companies that the government intends to approve the purchases of new Nvidia chips [RTX PRO 5500] by ByteDance, Alibaba; the article refers to the RTX PRO 5500 chips, according to the Information. Chinese chipmakers decline after Friday’s holiday. Disappointment with last week's Trump/Xi summit has also been cited as being among the factors weighing on Mainland Chinese equities. Chinese mutual fund launches, meanwhile, said to 'stall' amid declining investor demand [Chinese press]. China’s CSI 300 telecom services index declined after US lawmakers introduced legislation to restrict Chinese AI components from sensitive government systems. Zhongji Innolight [300308.CN] plummets by >8%.

-Leading into China’s Golden Week holiday, scheduled for October 1st-7th, the PBOC set the yuan mid-point at 6.7399 v 6.7489 prior, the strongest fixing since February 3rd, 2023.

-According to analysts at a large US bank, a US diesel export ban could hurt the, GBP, EUR and LATAM currencies. Australia is, also, major in terms of diesel imports.

-OIS continues to overwhelmingly favor a RBA rate hike on Tues with the probability at about 90%.

-Elliott-backed Aussie gold miner Northern Star rejects >A$38.0B bid from South Africa’s Gold Fields.

-Looking ahead this week (Asian-weighted focus, EST/EDT), key data releases include the US Q2 GDP followed by the Fed’s preferred inflation gauge US August PCE & Core PCE on Wednesday September 30th, and the US September Unemployment Rate & Non-Farm Payrolls & Average Hourly Earnings & Participation Rate on Friday October 2nd. Ahead of this upcoming data, Fed Funds FUTs are currently pricing in a 65.9% probability of a +25bps rate hike to 4.00%-4.25%.

-[Reminder] Over 1,400 Japanese firms trade ex-dividend on Sept 29th [Tues]. In terms of potential FX and fixed-income flows, month/quarter-end to occur on Wed [Sept 30th].

-US equity FUTs -0.7% to -0.4% during Asia trading.

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

-Sun Sep 27th: (Sun night, JP BoJ July Monetary Policy Meeting Minutes, CN Aug Chinese Industrial Profits YTD, SG Aug Industrial Production).

-Mon Sep 28th: IN Aug Industrial Production, MX Aug Trade Balance, (Mon night, AU RBA Interest Rate Decision & Statement, JP July Leading Index & Coincident Indicator).

-Tue Sep 29th: EU Sept Economic Confidence, CA July GDP, US Sept CB Consumer Confidence, US Aug JOLTS Job Openings, (Tue night, KR Aug Industrial Production & Retail Sales, JP Aug Industrial Production & Retail Sales, AU Aug Building Approvals, CN Sept Government & RatingDog Mnfg/Svcs/Composite PMI, JP Aug Housing Starts & Construction Orders, UK Q2 GDP).
-Wed Sep 30th: IN Q4 Trade Balance, US Q2 GDP, US Aug PCE & Aug Core PCE, RU Aug GDP & Retail Sales & Unemployment Rate, CO BanRep Sept Interest Rate Decision, (Wed night, Global Asia Sept S&P/HCOB Mnfg PMIs Day, JP BoJ Sept Summary of Opinions, JP Q3 Tankan Index, KR Sept Prelim Trade Balance, AU Aug Trade Balance & RBA Financial Stability Review, ID Aug Trade Balance).

-Thu Oct 1st: Global Europe Sept S&P/HCOB Mnfg PMIs Day, EU Aug Unemployment Rate, US Sept S&P/ISM Mnfg PMI, (Thu night, KR Sept CPI, JP Sept Tokyo CPI & Core CPI, JP Aug Unemployment Rate, HK Aug Retail Sales).

-Fri Oct 2nd: AU Sept Preliminary CPI & Core CPI, US Sept Unemployment Rate & Non-Farm Payrolls & Average Hourly Earnings & Participation Rate, SG Sept S&P Mnfg PMI, (Fri night, VN Q3 GDP, Sept CPI & Trade Balance & Retail Sales & Industrial Production).

Holidays in Asia this week

-Mon Sep 28th: Taiwan.

-Thu Oct 1st: China, Hong Kong.

-Fri Oct 2nd: China, India.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 Index opens flat at 8,665.

-(AU) Australia Treasurer Chalmers: [Confirms] Australia 2025-2026 budget deficit A$6B less than forecast; now sees the 2025-26 budget deficit at A$22.3B - Canberra, Australia.

-(AU) Australia Treasurer Chalmers notes smaller-than-forecast budget deficit citing figures due to be published later on Monday – US financial press.

-(AU) Australia Fin Min Gallagher: No information OpenAI hack was larger than first thought; Expect OpenAI hack investigation to end in weeks - Canberra, Australia.

-(AU) Australia sells A$800M v A$800M indicated in 3.75% Apr 2037 bonds ; Avg Yield: 5.429% v 5.3910% prior; bid to cover 4.88x v 3.85x prior.

-(AU) NST.AU Rejects unsolicited conditional non-binding indicative proposal from Gold Fields; Proposal implied A$27.00/share and A$38.7B equity value based on September 11th, 2026 prices.

-(NZ) New Zealand Aug Filled Jobs M/M: 0.2% v 0.2% prior [update].

-(NZ) New Zealand RBNZ: Sold net NZ$253M in August vs. Sold net NZ$253M in July.

China/Hong Kong

-(CN) Shanghai Composite Index opens -0.3% at 3,878; (HK) Hang Seng Index opens +0.2% at 24,555.

-(CN) White House: US and China confirm agreement on $30B v $30B reciprocal tariff cut.

-(CN) *USD/CNY China PBOC sets the yuan mid-point at 6.7399 v 6.7489 prior [PBOC continues to fix the Yuan at the strongest level since Feb 3rd, 2023].

-(CN) China Aug Industrial Profits Y/Y: 4.2% v 11.2% prior.

-(CN) China Commerce Ministry (MOFCOM): [Confirms] trade truce with the US will be extended to Jan, 10th 2027; China to import US coal in 2027 and 2028.

-(CN) China's Ministry of Industry and Information Technology: Told some Chinese companies that the government intends to approve the purchases of new Nvidia chips by ByteDance, Alibaba - The Information.

-(CN) China Coking Coal FUTS -3.2% as China pledged to increase coal imports from the US.

-(CN) Xinhua published 8 ‘key’ takeaways from the Trump/Xi summit - update.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY661B in 1-day Overnight Reverse Repos.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY300B in 14-day Reverse Repos.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY139B in 7-day Reverse Repos; Net injects CNY440B v drains CNY111B prior.

Japan

-(JP) Nikkei 225 Index opens +0.3% at 66,558.

-(JP) BOJ July Minutes (2 decisions ago): Members agreed financial conditions are accommodative.

-(JP) Japan Aug PPI Services Y/Y: 3.7% v 3.6%e.

-(JP) Japan PM Takaichi and US Pres Trump held phone conversation for 20 minutes on Saturday; Trump provided a detailed explanation of the US-China summit meeting [weekend update].

-(JP) Japan PM Cabinet approval rating declines by -2pct points to 51% - Asahi Poll.

-(JP) Former Bank of Japan (BOJ) Official Momma: BoJ rate hike in October is a real possibility.

-(JP) Major Japanese Banks fixes yen stronger by >1.00/USD:

-(JP) Japan considers allowing NEDO grants for next-generation nuclear reactors - Nikkei.

-(JP) Japanese Government Advisor: Japan's defense buildup won't rattle markets.

-(JP) 7201.JP Statement: Targets 500K LATAM sales in FY27.

-(JP) Japan 5-year JGB yield rises +3.0bps to 2.430% to record high.

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

-(JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 10~25 Years; Inflation-Indexed Bonds (Inline with planned amounts for Q3, 2026).

Korea

-(KR) Kospi Index opens -0.3% at 7,058.

-(KR) Bank of Korea (BOK): To review financial and FX markets after holiday; reiterates domestic economic fundamental remain sound.

-(KR) South Korea's President Lee to hold meeting to review mega projects on Tuesday [September 29th, 2026].

-(KR) South Korea 3-year bond yield rises to highest level since November, 2022.

-(KR) Bank of Korea (BOK) sells 3-month Monetary Stabilization Bonds (MSBs): Yield 3.140% v 3.080% prior.

Other Asia

-(IN) India Bank Unions defer 3-day nationwide strike - PTI.

-(IN) India "benchmark" 10-year government bond yield at highest level since May, 2024.

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

-(TH) USD/THB Thailand baht weakens to as low as 33.56/USD, lowest level since July 30th 2026.

-(TH) Thailand Aug Car Sales: 59.8K v 59.2K prior.

-(TH) Thailand Industries Federation (FDI): Thai flooding has not impacted auto supply chains yet.

North America

-(US) Pres. Trump: approved new Fuel Economy Standards, rolling back standards and EV mandate set by Biden Admin - Truth Social [weekend update].

-(US) OPENAI.IPO Said to pause training of latest models after agents probed US government sites in unexpected ways; the co. plans to resume training 'only when it is confident that it has additional safeguards' - US financial press [update].

-(US) For third time, US Supreme Court blocks Missouri from using Republican drawn Congressional map in the midterm elections - press [weekend update].

-(US) Pres. Trump: The American People elected me to deliver HISTORIC Economic Results, and now, I have a new responsibility, reporting our incredible results because the Fake News refuses to do it - Truth Social [weekend update].

-(US) ORCL Larry Ellison pledges and additional $9.2B more in Oracle shares (67M shares) as collateral for personal loans, a 19% increase in his pledged shares compared to the same period last year - press [weekend update]..

-(US) US: No plans to sell weapons to China - WSJ.

-(US) President Trump: Incredible meeting with Xi; Made tremendous progress.

-(US) USTR Greer: Will continue to pursue fair reciprocal trade with China.

-(US) President Trump: Spoke to Zelenskyy, told him to take it easy on refinery - The President attends the President's Cup [Open Press], The White House.

-(US) White House: President Trump to make an announcement at 2 pm ET on Monday [September 28th, 2026].

-(US) Secretary of State Rubio to meet with Saudi Foreign Minister at 11:15am ET on Monday [September 28th, 2026].

-(US) Follow up: President Trump: Arrests in UK were a great thing; We had suspects under view for a long time and we got them; Suspects were looking to do big damage.

-(US) Defense firms are ‘rushing’ to increase missile production, but it is coming ‘too late’ - WSJ.

-(BR) Brazil govt announces ban on online betting operations [weekend update].

Europe

-(FR) France Conservatives to maintain Senate majority; Far-right to establish first Senate parliament group, cites early results – US financial press [ update].

-(UK) Incident declared at RAF Fairford, Gloucestershire; 5 men arrested; Base used as forward location US Air Force Global Strike Command, and US B-52s and B-1s have flown strikes on Iran from it since the war began on Feb 28 (update) [weekend update].

-(UK) According to a large US bank, the pound (GBP), Euro (EUR) and LATAM FX are exposed to US diesel ban risks; the most immediate impact is expected on direct importers – US financial press.

-(UK) FER.ES Heathrow expansion doubted as PM Burnham won't say he backs it - London Times [Update].

-(CH) SNB Pres Schlegel: Looking closely at the impact of the summer heat wave on food prices [weekend update].

-(TR) Turkey: Fund orders on Sept 17th the be part of liquidation [clarification of the Sept 17th fund order cancellations].

Middle East

-(IR) Reportedly Pres Trump has rejected Iranian proposal for 7-day ceasefire and has told advisers he will resume bombing Iran after the US midterm elections in early November; Trump is skeptical that Iran govt will meet his demands - WSJ [weekend update].

-(IR) Iran Foreign Minister Araqchi: Have seen initial response from Trump to 7-day ceasefire proposal, but waiting to receive official response via mediators [weekend update].

-(IR) Iran Army Spokesperson: Tehran is ready for confrontation and will inflict greater damage to US - State Media.

-(IQ) Iraq in talks with US to exempt some Iraqi airports from restrictions on Iranian airlines - press [weekend update].

-(QA) Qatar Finance Ministry: issued $3.0B in bonds - update.

Levels as of 01:20 ET

Nikkei 225 -0.1%; ASX 200 +0.1%; Hang Seng +0.5%; Shanghai Composite -1.9%; Kospi -2.3%.

Equity S&P500 Futures -0.4%; Nasdaq100 -0.7%; DAX +0.2%; FTSE100 +0.2%.

EUR 1.1391-1.1374; JPY 157.86-157.23;AUD 0.7030-0.7007; NZD 0.5674-0.5649.

Gold -2.3% at $4,189/oz; BTC -1.3% at $83,369; WTI Crude Oil +2.0% at $94.22/bbl; Copper -1.7% at $6.6650/lbs.