Tepid equity rebound seen ahead of the weekend after Thursday’s rout

Asia Market Update: Tepid equity rebound seen ahead of the weekend after Thursday’s rout; Warsh did not give forward guidance (as expected), noted financial stability risks; MSCI sends Indonesian equities to the late 1990s lows; China Q3 GDP due next week.

General trends and developments

-Negative AI-related credit/earnings headlines have kept equity sentiment cautious, despite today’s tepid gains. South Korea’s Kospi has managed to rise by >3%, after declining by 9% at one point on Thursday’s session. Japan’s Nikkei has risen by <2%. Cautious headlines have continued to appear regarding Anthropic: Some investors reportedly discussed lowering the co’s estimated IPO valuation to ~$1.5T vs ~$2.0T previously following last night's private institutional investor meeting. As AI-related credit concerns, also, remain in focus, Anthropic is also said to have received the highest junk credit rating from ratings agency Kroll in June, according to the FT. The Financial Times had previously reported, the firm’s bankers are targeting ‘top-tier’ credit ratings for the co. after its expected IPO.

-US equity FUTs saw slight volatility as Fed Chair Warsh commented at the IMF/World Bank event in Thailand. As expected no forward guidance was given, as Warsh elected to comment on topics including global trends, along with AI in the context of financials stability. Hence, little impact was initially seen on the Fed rate probabilities following his remarks.

- JB Hunt Transportation [JBHT] reported final Q3 results after issuing a warning in mid Sept. Recall, the co’s shares had declined by >10% on Sept 15th amid comments regarding the Q3 outlook and negative impact of diesel prices.

-Indonesia’s benchmark equity index opened lower by 8% and eventually saw the worst 1-day loss since 1998 [-11%]. Cautious MSCI comments remain the key catalyst for the Jakarta market: MSCI stated it has launched a consultation on a proposal to reclassify Indonesia from Emerging Market to Standalone Market status if insufficient progress was not made by November 2026, announcing its final decision on or before June 30th, 2027. Indonesia’s benchmark equities Jakarta Composite Index fell -8% to 5,593.92 at the open following the statement, triggering a circuit breaker and halting programme trading for 20 minutes. Indonesia Central Bank (BI) Executive Director Hutapea stated that BI continues to intervene in offshore and onshore FX markets, and maintains its presence in the market to safeguard Rupiah stability. Indonesia benchmark equities subsequently continued declines by falling -11% to 5,193.22, its steepest decline since January 1998 during which the Asian Financial Crisis reached its zenith in Indonesia and lowest level since early-November 2020.

-Oil futures re-opened lower, with WTI crude falling by -0.2% to $97.82/bbl (vs. $97.97/bbl prior) and Brent falling by -0.2% to $105.69/bbl (vs. $105.92/bbl prior). This followed from yesterday’s session highs at $98.32/bbl for WTI crude and $106.40/bbl for Brent, after the IEA announced an agreement to accelerate the release of the remaining 330Mbbl/400Mbbl of oil available to the market committed under the March 2026 Collective Action agreement, including >20Mbbl of diesel to be released “as soon as possible”. Additionally, the weekly Flexport Global Logistics Update stated that container ship transits through the Suez Canal reached 61 for the week ending October 4th, +154% y/y and U.S. President Trump stated that he "may have to go to Pickaxe mountain."

-Over the EU market session, Germany and France announced a confirmation on deal to preserve the car industry. The deal included scaling down of EU rules for CO₂ car combustion engine emissions from 100% to 90% [with an additional +10% leeway in exchange for investments in alternative fuels through credits from using low-carbon steel, renewable/e-fuels, or similar measures from 10% initially] for EU’s 27 countries, as part of the “made in Europe” scheme proposed on March 4th, 2026.

-US equity FUTs +0.2% during Asia trading.

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

-Mon Oct 12th: IMF Semi-Annual Meetings, IN Sept CPI, RU Aug Trade Balance, (Mon night, JP Sept PPI, AU Sept 28-29th RBA Meeting Minutes, DE Sept CPI).

-Tue Oct 13th: US OPEC Monthly Report, US Sept Existing Home Sales, (Tue night, JP Sept M2 & M3 Money Supply, SG Q3 Preliminary GDP, CN Sept CPI & PPI, CN Sept Trade Balance, JP 5-Year JGB Auction).

-Wed Oct 14th: US IEA Monthly Report, US Sept CPI & Core CPI, (Wed night, KR Sept Trade Balance, AU Sept Unemployment Rate & Employment Change & Participation Rate, KR M2 & M3 Money Supply, JP Aug Industrial Production & Capacity Utilization, UK Aug GDP & Trade Balance).

-Thu Oct 15th: IN Sept Trade Balance, EU Aug Industrial Production, US Sept Retail Sales & PPI, (Thu night, NZ Sept Manufacturing PMI, KR Sept Unemployment Rate, SG Sept Trade Balance, MY Q3 Preliminary GDP).

-Fri Oct 16th: EU Sept CPI, EU Aug Trade Balance, US Sept Industrial Production & Capacity Utilization Rate.

Holidays in Asia this week

-Mon Oct 12th: Japan.

-Tue Oct 13th: Thailand.

-Fri Oct 16th: Thailand.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 Index opens +1.0% at 8,806.

-(NZ) ASB Bank: Is reviewing forecast that RBNZ rate will peak at 3.25% amid signs of rising price pressures; the firm currently sees two 25bps rate hikes in 2026, sees no rate hikes in 2027.

-(AU) Australia sells A$1.0B v A$1.0B indicated in 3.25% Apr 2029 Bonds: Avg Yield: 4.8238% v 4.6752% prior; Bid-to-cover: 4.89x v 3.56x prior.

-(NZ) New Zealand Sept Manufacturing PMI: 56.5 v 53.3 prior (12th month of expansion).

-(NZ) New Zealand Sept Total Card Spending M/M: -0.5% v -0.5% prior.

-(NZ) New Zealand Sept Food Prices M/M: 0.0% v 0.3% prior.

-(NZ) New Zealand Sept Non Resident Bond Holdings: 59.3% v 58.9% prior.

-(NZ) New Zealand diesel and gasoline prices rose further in Sept - update.

China/Hong Kong

-(CN) Shanghai Composite Index opens +0.5% at 3,723; (HK) Hang Seng Index opens +1.1% at 24,321.

-(CN) China PBOC Gov Pan Gongsheng: Reiterates to maintain moderately loose monetary policy - G20 comments [EU market close].

-(CN) China Foreign Minister Wang Yi: Promoting peace and reconciliation in the region is the cornerstone of China’s Middle East policy. China has consistently held that the Palestinian question is the greatest historical injustice of this century.

-(CN) China Finance Minister Lan Fo'an calls for greater World Bank development financing and greater role in counter-cyclical directions.

-(CN) China National Team signals return to the domestic equity market; cites the pickup in ETF inflows - US financial press.

-(CN) China sets 2027 Corn Import Tariff Quota: 7.2M metric tonnes; Wheat Import Tariff Quota: 9.64M metric tonnes [unchanged from prior year].

-(CN) China Ministry of Industry & Information Technology: Released 35th batch of new energy vehicle models eligible for tax reductions and exemptions.

-(CN) UK atomic energy body said the West is in a nuclear fusion race with China - FT [update].

-(CN) China Vice Minister of Commerce (MOFCOM) Yan Dong: China International Import Export will host >4.1K foreign firms; the event will be held between Nov 5-10th.

-(CN) A $390B buyer lurks behind higher US yields; notes buying interest from banks in China - US financial press.

-(CN) China MOF: To sell CNY15.5B of bonds in Hong Kong on Oct 23rd.

-(CN) China PBOC sets the yuan mid-point at 6.7220 v 6.7253 prior (strongest level since February 2nd, 2023).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY60B in 7-day Reverse Repos; Net injects CNY58B v injects CNY45B prior.

Japan

-(JP) Nikkei 225 Index opens +0.9% at 65,002.

-(JP) Japan benchmark 10-year JGB FUTs +35bps in early trade.

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

-(JP) BOJ Outright Bond Purchase Operation for 3~5 Years; 10~25 Years & >25 Years Bonds (Inline with planned amounts for Q4, 2026).

-(JP) Japan releases weekly flows data [period ended Oct 9th]: Foreign buying of Japan equities: ¥3.52T v ¥2.20T prior; Japan buying of foreign bonds: -¥339.7B v -¥345.7B prior.

-(JP) Japan foreign residents hit record 4.28M as of end-June, +3.8% vs the end of 2025; the figure was driven by China, Vietnam and South Korea

-(JP) Japan to delay specifying 3.5% defense spending target - Asahi.

-(JP) Japan Fin Min Katayama: Reiterates stance that G20 affirmed prior commitments on FX; G20 did not produce a communique or joint statement this time - G20 comments [EU market close].

-(JP) Japan Fin Min Katayama: Can't comment whether we would need extra budget or not. Even if needed, extra budget would be limited to urgent policy priorities - Tokyo, Japan.

-(JP) Japan Econ Minister Kiuchi: Didn't seek to delay BoJ rate hike at June meeting.

-(JP) Follow up: Japan Chief Cabinet Sec Kihara: Japan got notice from Russia on detained reporter. No contact made yet with reporter detained in Russia - Tokyo, Japan.

-(JP) Japan considers mandating cybersecurity precautions for Telcos - TBS.

-(JP) Japan to open anti-dumping probe on Chinese pigments; rutile titanium dioxide was specifically mentioned.

-(JP) Japan sells ¥3.3T vs. ¥3.3T indicated in 3-Month Bills; Avg Yield: 1.2803% v 1.2738% prior; bid-to-cover: 4.30x v 4.58x prior.

Korea

-(KR) Kospi Index opens +1.0% at 5,664.

-(KR) South Korea Sept Unemployment Rate: 2.6% v 2.7%e.

-(KR) South Korea Sept Export Price Index M/M: -0.8% v -3.5% prior; Y/Y: 40.9% v 42.7% prior.

-(KR) South Korea: Sept Foreign Net Investment in Local Bonds: -$5.8B v -$4.5B prior; cites data from the BOK - Press [update].

-(KR) South Korea Finance Ministry: To monitor impact of stock market volatility on bond, forex, short-term money markets. Authorities to respond sternly to market-disturbing behaviour..

-(KR) South Korea is seeking a tax break for its participation in Alaska LNG project - Maeil.

-(KR) South Korea: plans to depend more on coal during the upcoming winter [amid LNG supply disruptions], plans to use 'dirty coal' - Press.

-(KR) Korea Exchange activates sidecar on Kosdaq following Kosdaq 150 FUTs falling by -6% and Kosdaq 150 Spot Index falling by -3%, programme trading halted for five-minutes.

-(KR) South Korea considers expanding naval mission to Gulf of Oman - Donga.

-(KR) South Korea sells 50-year treasury bonds: Avg yield: 4.195% v 4.720% prior.

Other Asia

-(ID) Indonesia benchmark equities falls -8% at the open on cautious comments from MSCI; Indonesia 10-year bond yield flat at 7.26%.

-(ID) Follow up: Indonesia Jakarta Composite Index hit circuit breaker following benchmark equities falling by -8%, programme trading halted for 30 minutes.

-(ID) MSCI: Launches a Consultation on a Proposal to Reclassify Indonesia from Emerging Market to Standalone Market Status - update.

-(ID) Follow up: Indonesia Stock Exchange: Has taken various concrete steps to enhance the transparency, integrity of Indonesia’s capital market in response to MSCI announcement.

-(TW) Taiwan Minister of Economic Affairs: Taiwan to fund $4B US industrial park for Nvidia suppliers. Texas complex may be first of several US sites for AI producers..

-(TW) Follow-up: Taiwan sees Alaska LNG deal lifting US LNG share to 30% - Taiwan press.

-(TW) Taiwan dollar falls to 32.468/USD, lowest level since early-August.

-(TW) Taiwan sells NT$25.0B v NT$25.0B indicated in 2-year Certificates (NCDs): Avg Yield: 1.580% v 1.628% prior; bid-to-cover: 3.31x v 3.21x prior.

-(MY) Malaysia Q3 Advance GDP Y/Y: 5.3% v 5.1%e.

-(SG) Singapore Sept Non-oil Domestic Exports Y/Y: 68.4% v 32.2%e.

-(IN) India Fin Min Sitharaman: India's economic performance consistent with government steps.

North America

-(US) Fed Chair Warsh: Fed needs to think about financial stability; world has 'a lot' of economic challenges - Fireside Chat / Q&A with IMF Managing Director Georgieva at the IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand.

-(US) SEPT ADVANCE RETAIL SALES M/M: 0.8% V 0.3%E; RETAIL SALES (EX-AUTO) M/M: 0.9% V 0.5%E [US market close].

-(US) SEPT PPI FINAL DEMAND M/M: 1.3% V 0.6%E; Y/Y: 6.3% V 5.4%E; (ex-food/energy) M/M: 0.7% v 0.3%e; Y/Y: 5.0% v 4.4%e [US market close].

-(US) OCT EMPIRE MANUFACTURING: 25.5 V 12.0E (highest in almost 5 years); New orders rise, prices paid falls m/m [US market close].

-(US) OCT PHILADELPHIA FED BUSINESS OUTLOOK: 20.9 V 28.0E; New Orders: 4.3 v 29.2 prior [US market close].

-(US) INITIAL JOBLESS CLAIMS: 199K V 200KE; CONTINUING CLAIMS: 1.71M V 1.71ME [US market close].

-(US) DOE CRUDE: -8.6M V -0.5ME; GASOLINE: +3.5M V -0.5ME; DISTILLATE: -2.5M V -1.5ME [US market close].

-(US) Weekly EIA Natural Gas Inventories: +67 BCF vs. +75 BCF to +77 BCF Indicated Range [US market close].

-(US) US reportedly suggested IEA to do another 100Mbbl oil release - press [US market close].

-(US) National Retail Federal (NRF) expects US holiday season sales to surpass $1T, +4.2% y/y [US market close].

-(US) Fed's Goolsbee (non-voter in 2026; voter in 2027): A discouraging month in terms of inflation - CNN Interview.

-(US) Fed's Hammack (voter, hawk): Hearing more from lower income Americans struggling with inflation.

-(US) US Treasury Undersecretary Browne: US, Japan communicate closely and work together at all levels to support stable, well-functioning markets. Japan no longer faces deflationary environment and yen level and monetary policy must change along with that - IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand.

-(US) Pentagon: Defense Sec Hegseth met with UK counterpart today and raised the concept of NATO 3.0, which would 'rebalance' the alliance and reduce US troop presence in Europe.

-(US) Flexport Global Logistics Update: US imports reached 2.55M TEU in September with imports from China up +21.2% y/y [deployment continues to be high post-Golden Week and rates rose in Air], Container ship transits through the Suez Canal reached 61 in the week ending October 4th. up >154% y/y.

-(US) President Trump: Hello Iowa! I am going to be coming to your Great State, which I won in Landslides all three times ... - post on Truth Social.

-(US) President Trump: No real reason for me to go to Maine. Think I will go to Minnesota. [On Ilhan Omar] Not involved in that - Recorded Interview on Newsmax.

-(US) JBHT Reports Q3 $1.82 v $1.81e, Rev $3.68B v $3.56Be [US market close].

-(US) ANTHROPIC.IPO Some investors reportedly discussed lowering Anthropic's estimated IPO valuation to ~$1.5T vs ~$2.0T previously following last night's meeting; Some investors disappointed with the results that were presented and market's selloff reaction - press.

-(US) ANTHROPIC.IPO Reportedly said to have received the highest junk credit rating from Kroll in June [2026] - FT.

-(US) STARLINK.IPO Follow Up: The order to limit the access of Ukraine to the Starshield system came from 'inside' the White House - financial press.

-(US) SPCX CEO Musk: SpaceX may follow Anthropic on external safety assessors.

-(CA) Bank of Canada (BoC) Gov Macklem: Canada hasn't raised rates yet, but the longer it goes, the harder it is to look through increase in energy prices - IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand.

-(MX) US-Mexico trade talks has stalled after Commerce Sec Lutnick intervention - WSJ.

-(MX) Trump: Praises Mexico Pres Sheinbaum, but says the cartels run the country; Mexico should be stopping drug flow, but they can't [US market close].

-(BR) Brazil Incumbent President Lula: Supporting lowering minimum age for heinous crimes - Globo Interview [ahead of runoff].

Europe

-IMF Managing Dir Georgieva: Northern countries need to rebuild their fuel reserves as winter is coming. No growth can reverse rising debt fast enough without fiscal effort - IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand.

-IEA statement: Agreed to accelerate the release of the remaining volumes from March agreement including over 20M barrels of diesel; States willingness to take further action to address challenges in global energy markets [EU market close].

-(EU) EU has begun assessing additional sectors for China trade quotas - press [EU market close].

-(EU) European Stability Mechanism (ESM) Dir Gramegna: Conditions in Euro Zone bond markets remain stable and did not warrant intervention from the bloc’s rescue fund.

-(EU) ECB's Nagel (Germany): Reiterates view that cannot exclude that we may need to hike again.

-(EU) Luxembourg Fin Min Gramegna: ESM still very much in bond market monitoring phase. France has always complied with our budgetary rules. Not at all at a stage where ESM has to jump in.

-(EU) ECB's Rehn (Finland): Growth outlook better today than at start of year. Not seeing second-round effects on inflation - US Financial Press Interview.

-(DE) Germany and France confirm deal to preserve EU car industry [the headline indicates the two governments have now reached one, though its terms have not been specified] - press [EU market close].

-(DE) Germany Fin Min Klingbeil: Not against China as the country is an important partner, but China is not playing by the rules and we should not be 'naive.

-(FR) ECB's Moulin (France): France can slash deficit to 3% in 3 years [EU market close].

-(FR) France Fin Min Lescure: Affirms France will use guardrails for budget if needed - IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand.

-(RU) Russia Local Governor: Drones hit industrial facilities in Russia's Rostov region.

-(RU) USGS: Magnitude 6.9 earthquake struck 76 KM NE of Ozernovskiy (Russia); Japan's JMA withdrew its earthquake warning.

-(UK) Bank of England (BoE) Gov Bailey: Above-target UK inflation remains enormously frustrating. Too early to form strong views on strength of 2nd round effects. So far signs of 2nd round effects subdued, businesses emphasizing cost cutting - IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand.

-(UK) France said to have agreed to support UK inclusion in the EU’s proposed “Made in Europe” industrial legislation.

-(PT) Portugal housing protest draws thousands after police clashes [amid soaring house prices].

-(ZA) South Africa Central Bank (SARB) Gov Kganyago: Monetary policy mildly restrictive. Will take policy decisions meeting by meeting - IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand.

Middle East

-(SA) Saudi-led Coalition: Intercepted and destroyed drone launched towards Saudi Arabia's eastern region.

Levels as of 01:20 ET

Nikkei 225 +1.9%; ASX 200 +1.0%; Hang Seng +1.0%; Shanghai Composite +0.2%; Kospi +3.3%.

Equity S&P500 Futures +0.2%; Nasdaq100 +0.2%; DAX +0.7%; FTSE100 -0.1%.

EUR 1.1241-1.1151; JPY 158.18-157.80; AUD 0.6948-0.6916; NZD 0.5658-0.5614.

Gold +0.1% at $4,172/oz; BTC +1.9% at $82,209; WTI Crude Oil -0.5% at $97.45/bbl; Copper +1.1% at $6.6285/lbs.