The Kospi continues to drive global equity volatility, Nasdaq FUTs drop by close to 1%

Asia market update: The Kospi continues to drive global equity volatility, Nasdaq FUTs drop by close to 1% ; Tech funding strains remain in focus, Character.AI based in Silicon Valley begins voluntary Chapter 11 proceedings in Delaware; AirTrunk to delay Singapore IPO; US bank earnings due [JPMorgan, Citi, GS].

General trends and developments

- After the earlier weakness on Wall Street and with the volatility in South Korean chip stocks, the Korea Exchange activated its sidecar mechanism following a -5% decline in Kospi 200 futures [first downside activation since mid-Aug]. Multiple factors have been cited for the continued weakness in domestic chip stocks [including recent comments from Broadcom’s CEO on AI funding, CXMT remarks regarding its 4F2 DRAM architecture, Nanya’s Q3 results missed estimates, Microsoft unveiled its Maia 300 AI-chip]. On Monday, former BOK Gov Rhee had noted South Korea’s chip industry cycle may end ‘earlier’ due to developments related to Chinese tech [local press].

- Even news from last week remains in play [Hynix ADR share lockup expiration, weaker prelim Samsung Q3 figures, uncertainty regarding OpenAI’s annualized Rev target].

- Japanese longer-dated bonds have extended gains after stronger demand was seen as last week’s bond auctions [10-year and 30-year]. Ueda remains tight-lipped ahead of the Oct BOJ rate decision [Oct 30th]. Meanwhile, the BOJ’s quarterly household inflation expectations survey showed that inflation expectations remain too high. This development is not surprising as Japanese corporates continue to announce aggressive price hikes. Meji Holdings, earlier today, announced plans to raise protein product prices by up to 11%.

- IMF: The IMF’s semi-annual meetings are underway from 12–18th October, with its latest World Economic Outlook (WEO) released last night at 22:00pm ET. The IMF raised its 2026 global GDP growth forecast to 3.1% (vs. 3.0% prior), while maintaining its 2027 projection at 3.4%. The US 2026 forecast was unchanged at 2.3%, while its 2027 outlook was revised higher to 2.3% (vs. 2.2% prior). China’s growth forecasts were cut to 4.5% (vs. 4.6% prior) for 2026 and to 4.0% (vs. 4.1% prior) for 2027. Elsewhere, the IMF raised its 2026 growth forecasts for the euro area to 1.1% (vs. 0.9% prior), the UK to 1.3% (vs. 1.0% prior) and Japan to 0.7% (vs. 0.6% prior).

- RBA Sept Meeting Minutes: Despite the eventual decision to raise rates, the RBA noted it briefly considered holding rates amid falling house prices but judged local capacity pressures, cost pass-through and emerging AI-related price pressures could keep pushing CPI higher. The Board also warned that pausing rates while global rates rise risked weakening the Australian dollar.

- India September CPI: Post-India market close (NSE and BSE), India’s September CPI inflation came in at +5.5% year-on-year, marking the seventh straight month within the RBI’s 2–6% tolerance band around its 4% target. However, food inflation increased +7.7% year-on-year (vs. 6.0% prior).
-US equity FUTs -0.6% to -0.1% 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, JP 5-Year JGB Auction).

- Wed Oct 14th: US IEA Monthly Report, US Sept CPI & Core CPI, CN Sept Trade Balance, (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, CN Sept New Yuan Loans & Total Social Financing & M2 Money Stock, 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 +0.1% at 8,787.

- (AU) Reserve Bank of Australia (RBA) SEPT MINUTES: Reiterates view to increase Cash Rate Target further if needed; cautioned that a rate pause during global tightening cycle may weaken the A$.

- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 68.0 v 67.1 prior.

- (AU) Australia Sept NAB Business Confidence: -13 v -9 prior.

- (AU) Australia competition regulator (ACCC) alleges major Australian egg producers engaged in cartel and other anti-competitive conduct - Statement.

- (AU) Australia sells A$300M v A$300M indicated in 3.00% Mar 2047 Bonds: Avg Yield: 5.6818% v 5.4319% prior, bid-to-cover: 3.60x v 3.22x prior.

- (NZ) New Zealand Commerce Minister: New Zealand won't impose safeguards on aluminum extrusion imports - Statement.

China/Hong Kong

- (CN) Shanghai Composite Index opens -1.0% at 3,760; (HK) Hang Seng Index opens -0.4% at 24,172.

- (CN) China said to warn of plague risk near the border with Russia; China border city said to alert travelers from Russia over plague risk - Press [update].

- (CN) China Commerce Ministry (MOFCOM): proposes civil aviation dual-use export rules; To facilitate compliant exports for aviation enterprises.

- (CN) China automakers accelerate solid-state battery push; companies mentioned included Chery Auto – Shanghai Securities News.

- (CN) Smaller banks in China were told to limit new bond duration – Chinese press.

- (CN) V China PBOC approves Visa to prepare for domestic bankcard clearing institution in China - Xinhua.

- (CN) V [Confirms] receives Approval to Begin Preparations for a Domestic Business in China.

- (CN) China PBOC sets the yuan mid-point at 6.7298 v 6.7313 prior (strongest level since February 2nd, 2023).

- (CN) China PBOC Open Market Operation (OMO): Sells CNY65B in 7-day Reverse Repos; Net injects CNY65B v drains CNY250B prior.

Japan

-(JP) Nikkei 225 Index opens -0.7% at 68,565

- (JP) Japan Sept PPI M/M: -0.3% v 0.5%e; Y/Y: 6.8% v 7.6%e

-(JP) Bank of Japan (BoJ) Gov Ueda: Reiterates stance that market determines long-term interest rates - Parliament comments

-(JP) Japanese households expect prices to rise by average of +11.8% a year from now, median +10.0% - BoJ survey

- (JP) Japan Sept Bank Lending Y/Y: 5.3% v 5.3% prior

- (JP) Japan PM Takaichi: Now is time for responsible, proactive fiscal policy - Tokyo, Japan

- (JP) Japan PM Takaichi: Incident involving US serviceman is unacceptable. In discussions with US for measures to prevent recurrence - Parliament

- (JP) Japan Fin Min Katayama: Confirms named as the Chair of the World Bank-IMF Joint Development Committee - Tokyo, Japan

- (JP) Japan Chief Cabinet Sec Kihara: Deeply concerned over US sanctions on ICC - Tokyo, Japan

- (JP) Japan Trade Min Akazawa: Participated in International Energy Forum (IEF) meet online due to Riyadh attack - Tokyo, Japan

Korea

- (KR) Kospi Index opens -3.1% at 6,186.

- (KR) Korea Exchange activates sidecar following Kospi 200 FUTs falling by -5%, programme trading halted for five-minutes.

- (KR) South Korea President Lee: National interest should be top priority in diplomacy - Cabinet Meeting.

- (KR) Kospi index -7%, down >10% in 2 sessions.

- (KR) South Korea to continue to support real estate project financing – Press.

- (KR) North Korea confirms test fire of an upgraded tactical ballistic missile earlier today - press.

Other Asia

-(IN) INDIA SEPT CPI Y/Y: 5.5% V 5.6%E (7th straight month with annual pace within target) [EU market close].

- (TW) Taiwan dollar weakens to 32.016/USD, lowest level since mid-August; tracks the declines in chip stocks.

- (TW) Taiwan state banks said to have sold USD on Mon in order to limit TWD losses – US financial press.

- (TW) Taiwan to impose anti-dumping duties on China's polyamine films.

- (TW) Taiwan Finance Ministry and Ministry of Economic Affairs: [Confirms] To impose anti-dumping duties on polyamine films from China, effective from Oct 19th.

- (IN) India PM Modi: Today technology, data, knowledge, innovation are powers - NE forum in New Delhi, India.

- (IN) Some banks stop quoting interbank USD/INR forwards after RBI widens scope of Forex RRR - Traders.

- (IN) India announces details of upcoming bond sale (held on Fridays); to sell INR340B in 2036 bonds on Fri, Oct 16th.

- (MY) Malaysia Trade Minister: Malaysia, EU aiming to sign Free Trade Agreement (FTA) by end-June 2027.

- (SG) Airtrunk [Australia data center co.] delays Singapore listing amid market volatility.

North America

- IMF world economic outlook (WEO): Raises 2026 global GDP growth forecast from 3.0% TO 3.1%; cuts China 2026 and 2027 GDP growth forecasts.

- (US) Trump Admin reportedly plans to move AI testing agency officials to the White House with plans to integrate CAISSI into the Administration's AI decision-making process - The Information [US market close].

- (US) Fed's Hammack (voter, hawk): Interest rates need to be higher; Would prefer to do smaller moves more frequently; Maintains an 'open mind' about the right timing for interest rate moves [US market close].

- (US) Pres. Trump: The European Union paid Russia 250 Billion Dollars for Energy, and the Fake News Media doesn’t want to get near that story. I made the right choice for the American People [US market close].

- (US) Fed's Hammack (voter, hawk): A stable market leaves room to address inflation; Sees inflation pressures as relatively broad-based rather than concentrated in one component [US market close].

- (US) Fed's Hammack (voter, hawk): Reiterates that more restriction is needed, but she has an open mind to rate moves; Policy restriction will need to hit demand either through capital spending or consumption.

- (US) President Trump: Submarine repair center will be in Cleveland - The President delivers Remarks [Pre-Credentialed Media], Covelli Centre, Youngstown, OH.

- (US) Pres. Trump: I see so many comments from the Radical Left Morons and Lunatics that China and Russia are helping t... - post on Truth Social.

- (US) Character.AI based in Silicon Valley begins voluntary Chapter 11 proceedings in Delaware; cites a statement from the co.; in the past there has been speculation related to the co. and various tech giants [Alphabet, XAI, META] - financial press.

- (US) META CEO Zuckerberg: Introduces Muse Wonder and Muse Wonder Full, a larger, more advanced class of AI models; Meta has reached the 'AI frontier;' Rejects calls for a slowdown in AI development - Twitter post & FT interview.

- (US) CMG Starbucks confirms it has no plans to pursue Chipotle acquisition; Spokesperson says "we want to be clear we are not buying Chipotle" - CNBC [US market close].

- (US) ANTHROPIC.IPO Statement: Made substantial progress on reducing effectiveness of distillation attacks on Claude using new methods. Reduced amount of data harvested by distillers by around 90-99%. Zhipu tried to distill Claude Fable 5.

- (MX) Mexican President Sheinbaum: There has been progress in trade talks with the US [US market close].

- (CO) President Espriella: Colombia arrest 29, kills 2 Clan Del Golfo members - National TV address.

- (PA) Magnitude 6.1 earthquake strikes 18km west of Río Grande, Panama - USGS.

Europe

- (RU) Russian Kremlin Daily Briefing: Communications ongoing about energy ceasefire, will inform in due course; Nothing to say right now [EU market close].

- (UR) Ukraine Pres Zelenskiy: Ukraine is ready for real decisions and de-escalatory steps to bring an end to this war closer; As of now, there is no indication that Russia is complying with the conditions outlined by the American President - X [US market close].

- (EU) Commission Official: EU has agreed to limit China hybrid imports to 350K cars per year, with 6% annual increase (compares to ~302K imported in 2025) [EU market close].

- (EU) ECB's Stournaras (Greece): ECB may stick with raising rates gradually [EU market close].

- (EU) 3 drones hit cargo ship 15 miles off Bulgarian coast - Nova TV.

- (RU) Russia Dep PM Novak: Have possibility of to make additional supplies of diesel available to global markets [US market close].

- (RU) Goldman Sachs: We do not see significant impact on global diesel prices from the announced Russian diesel releases.

- (UR) Ukraine Pres Zelenskiy: Reiterates Ukraine is ready for energy truce, not sure Putin is; 'Increasingly clear' that Russia is unwilling to accept US energy ceasefire proposal [EU market close].

- (UR) US Pres Trump: Zelenskyy and Putin have to get together and end the war; Zelenskyy has to focus on making a deal, not on talk; Putin has been more focused on making a deal than Zelenskyy.

- (DE) German Chancellor Merz: Diesel deal is out of the question for Germany; Sanctions must be tightened [EU market close].

- (FR) Bank of France Gov Moulin: French economy is holding up in the face of the energy shock [EU market close].

- (UK) Sept BRC Sales Like-For-Like (LFL) Y/Y: 1.0% v 0.5% prior.

-(UK) BOE’s Mann (hawkish dissenter): Stage is set for potential wage-price drift [EU market close].

- (UK) Bank of England (BOE’s) Greene (hawkish dissenter): If China revalues Yuan, would put upward inflation pressure on the UK.

- (UK) BOE’s Greene (hawkish dissenter): Concerned about successive supply shocks.

-(UK) UK Former PM Sunak: India has great opportunity in pharma supply chains - NE Economy Forum.

- (NL) Netherlands Sept Final CPI M/M: 0.1% v 0.1% prelim; Y/Y (final): 3.4% v 3.4% prelim.

- (IE) Ireland Sept Construction PMI: 50.4 v 50.7 prior.

Middle East

- (KW) Kuwait cuts November crude prices for Asia - Pricing Document.

- (SA) Reportedly Asian refiners bought 12M barrels of November Saudi crude in the spot market; Some at a $20 premium per barrel to official Nov selling prices - press [EU market close].

- (IR) IRGC claims to have struck a supertanker in the Strait of Hormuz early Monday - press [EU market close].

- (SA) Saudi-led Coalition: Intercepted and destroyed two ballistic missiles launched by the Houthis towards Khamis Mashit.

- (SA) Airlines continue to announce flight cancellations related to Saudi Arabia: Qatar Airways temporarily suspends flights to and from Saudi Arabia's Riyadh and Dammam due to current situation.

Levels as of 01:20 ET

Nikkei 225 -1.9%; ASX 200 flat; Hang Seng flat; Shanghai Composite +0.5%; Kospi -5.4%.

Equity S&P500 Futures -0.1%; Nasdaq100 -0.6%; DAX -0.1%; FTSE100 +0.3%.

EUR 1.1178-1.1153; JPY 158.69-158.20; AUD 0.6963-0.6950; NZD 0.5595-0.5579.

Gold +0.6% at $4,196/oz; BTC -0.3% at $83,792; WTI Crude Oil -1.4% at $92.43/bbl; Copper +0.2% at $6.7643/lbs.