Traders look to US-CN trade talks as JP and CN officials settle in and Xi consolidates power

Asia Market Update: Traders look to US-CN trade talks as JP & CN officials settle in and Xi consolidates power; Trump cuts off CA trade talks again; US Sept CPI tonight.

General trend and developments

- Pres Xi appears to have consolidated power at the 4th Plenum, which ended yesterday, setting up a much anticipated trade meeting as the White House announced Pres Trump would indeed meet Pres Xi at APEC on Thurs 30th Oct, just days before Trump’s threatened 100% tariffs on Chinese goods over rare-earth export restrictions are meant to come into effect on Nov 1st.

- Specifically, 11 full Central Committee members were replaced amid the ongoing ‘anti-corruption’ campaign, particularly in the military, the highest turnover since the 2017 Plenum. All 11 replacements for the demoted 11 seen as Xi loyalists. No changes were announced to the Politburo and Pres Xi himself retained all titles, signaling Xi has consolidated control.

- The next 5-year plan (2026-30) was approved, with the expected dual-promise to focus both on technology breakthroughs and revitalize consumption.

- Prior to APEC. China's Vice Premier He Lifeng confirmed to meet with US Treas Sec Bessent in Malaysia, from today (Oct 24th) at the ASEAN Summit for prep trade talks ahead of Xi-Trump.

- Multiple Chinese officials today committed to further support and research in high tech, AI and quantum technology along with major investment projects.

- Reports that China state buyers now cancelling some Russian crude deals, after similar stories out of India over the past day or so. Crude oil arrested its advances today, adding no more to the 4% rise yesterday.

Katayama said it can't be helped if more JGBs are needed for extra budget. Japanese yields fell today 1-2bps.

- Japan CPI for Sept largely inline with expectations, little initial market reaction on Yen but USD gained during the session to threaten 153 handle again.

- Japan’s largest trade union (RENGO) again said it would aim for >5% wage increases at next year’s round of Spring wage bargaining.

- Australia PMI Manufacturing fell into contraction for the first time in 10 months, while Japan’s PMI Manufacturing stayed in its 4th month of contraction.

- Korea's Kospi continued to tear ahead to new records, +2.4% with Nikkei also +1.4% amid new Japanese cabinet announcements as well as PM Takaichi herself.

- Pres Trump suddenly appeared to take offense at an ad placed in Ontario, Canada that he said misrepresented 1987 comments by Pres Reagan on free trade that Trump says interferes with the US Supreme Court (which is soon to hear oral arguments on IEEPA tariffs used by Trump) and therefore, “ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY .TERMINATED”

- Intel +8% after hours after beating earnings estimates and commenting that demand is outpacing supply into 2026.

- US equity FUTs +0.2% to +0.3% during Asia trading.

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

- Fri Oct 24th US Sept CPI (delayed release).

Holidays in Asia this week

- Mon Oct 20th Singapore.

- Tue Oct 21st India.

- Wed Oct 22nd India.

- Thu Oct 23rd Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.3% at 9,050.

- AUSTRALIA OCT PRELIMINARY PMI MANUFACTURING: 49.7 V 51.4 PRIOR (1st contraction in 10 months).

- RBA Gov Bullock: RBA will consider how to monetize interbank settlement system from 2026 - comments at the Bradfield Oration – Sydney.

- RBA extends time for concluding card review for merchant card payment costs until Mar 2026 - financial press.

China/Hong Kong

- Hang Seng opens +0.8% at 26,177; Shanghai Composite opens +0.2% at 3,929.

- TTN Research Alert: Pres Xi appears to have consolidated power at the 4th Plenum, which ended yesterday in Beijing.

- FOLLOW UP: CHINA STATE BUYERS SAID TO CANCEL SOME RUSSIAN CRUDE DEALS - FINANCIAL PRESS, CITING SOURCES.

- NDRC Head Zheng: Economy relies on the real economy to move towards the future; China to increase quantum technology in the next 5 years; pledges to implement some 'major' investment projects; new urban investment in underground pipeline network seen at >CNY5.0T.

- China Research Office Head: Expect China GDP to reach CNY140T this year - press.

- China PBOC Advisor says China 'has to do something major' for the economy - US financial press.

- FOLLOW UP: CHINA STATE BUYERS SAID TO CANCEL SOME RUSSIAN CRUDE DEALS - FINANCIAL PRESS, CITING SOURCES.

- Chinese press sees "momentum" for Yuan internationalisation - Shanghai Securities News.

- White House Pres Sec: Trump will meet with China Pres Xi on Thrs (10/30); A meeting with Russia's Putin is not completely off the table.

- US said to be planning to probe China's compliance with 2020 trade agreement - NYT.

- Flexport CEO: This time around [ahead of Nov 1st' tariff deadline] volumes haven’t dropped, importers all seem to think Trump will back off the 100% tariff increase before Nov 1st; Their cargo is already on the water though, so if the tariffs do go into effect next week will be brutal for importers. (update).

- Reportedly China state oil companies suspending seaborne imports of Russian crude out of fear over Western sanctions - press.

- CHINA COMMUNIST PARTY 4TH COMMUNIQUE: Approves draft of next 5-year plan (2026-31); replaces 11th Central Party Committee members (highest personnel turnover since 2017 amid an ongoing military purge); To greatly revitalize consumption ; To boost homegrown tech and core tech breakthroughs.

- US Treasury Dept confirms Treasury Sec Bessent participation in APEC, ASEAN Summit.

- (DE) Germany Chancellor Merz: Chinese leadership must know that we are not happy with rare earth situation but we aim to find a joint solution.

- China Vice Commerce Min Sheng: Welcome US retailers to operate in China; Met Walmart execs and hope they respect market rules.

- Hong Kong Sept CPI Composite Y/Y: 1.1% v 1.1%e [overnight update].

- China's Vice Prem He Lifeng confirmed to meet with US Treas Sec Bessent in Malaysia, Oct 24-27 (ASEAN Summit) [overnight update].

- China PBOC sets Yuan reference rate: 7.0928 v 7.0918 prior.

- China PBOC Open Market Operation (OMO): Injects CNY168B in 7-day reverse repos; Net injects CNY3.2B v drains CNY24B prior.

- China MOF sells 5-year and 7-year bonds.

Japan

- Nikkei 225 opens +0.9% at 49,090.

- JAPAN SEPT NATIONAL CPI Y/Y: 2.9% V 2.9%E; CPI (EX-FRESH FOOD) Y/Y: 2.9% V 2.9%E; CPI (ex-fresh food/energy) Y/Y: 3.0% v 3.1%e.

- JAPAN OCT PRELIMINARY PMI MANUFACTURING: 48.3 V 48.5 PRIOR (4th month of contraction).

- Japan Fin Min Katayama: Can't be helped if more JGBs are needed for extra budget - press group interview.

- Japan METI Min Akazawa: Unit prices of car exports are falling - financial press.

- Japan Fin Min Katayama: Need to take various factors into account when asked about possibility of raising financial income tax - financial press.

- Japan Economic Revitalization Min Kiuchi: Monetary policy measures should be up to the Bank of Japan - financial press.

- Japan said to consider establishing a national intelligence agency - Yomiuri.

- Japan PM Takaichi arranges a call with Trump around Oct 25th - press.

- Japan top Trade negotiator Akazawa: Trump is trying to change world's order; PM Takaichi said will keep Japan-US deal promise; Will build up US investment projects over next 3.5 years.

- RENGO [LARGEST TRADE UNION IN JAPAN] SEEK WAGE HIKES OF 5% OR MORE IN 2026 V 5.25% ON AVERAGE IN 2025 – PRESS [overnight update].

- Japan sells ¥4.3T in 3-Month Bills; Avg Yield: 0.4945% v 0.4571% prior; bid-to-cover: 3.71x v 3.58x prior.

Korea

- Kospi opens +1.2% at 3,893

- South Korea Fin Min: Closely monitoring financial markets; Will act swiftly if needed to stabilize financial markets.

- South Korea Industry Min Kim Jung-kwan: South Korea wants US investment package to be less than $350B as part of tariff deal - financial press.

Other Asia

- Taiwan Sept Industrial Production Y/Y: 15.5% v 14.5 [overnight update].

North America

- *(US) PRES. TRUMP: THE RONALD REAGAN FOUNDATION HAS JUST ANNOUNCED THAT CANADA HAS FRAUDULENTLY USED AN ADVERTISEMENT THAT INTERFERES WITH THE US SUPREME COURT; ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED - post on Truth Social.

- Trump Admin said to speed up data center power hookups - US financial press.

- ANTHROPIC.IPO Confirms to expand use of Google Cloud TPUs & Services; Anthropic will train and serve Claude models with plans to access up to 1 million TPUs, worth tens of billions of dolla.

- (CA) CANADA AUG RETAIL SALES M/M: 1.0% V 1.0%E.

- (AR) White House: Confirms increasing Argentina beef import tariff rate quota to 80K tons to reduce prices.

- (US) SEPT EXISTING HOME SALES: 4.06M V 4.06ME; Months supply: 4.6 v 4.6 prior.

- (US) WEEKLY EIA NATURAL GAS INVENTORIES: +87 BCF VS. +80 BCF TO +82 BCF INDICATED RANGE.

- (US) Oct Kansas City Fed Manufacturing Activity: 6 v 2e.

- (US) White House Pres Sec: Trump will meet with China Pres Xi on Thrs (10/30); A meeting with Russia's Putin is not completely off the table.

- (US) Interior Sec Burgum: To open Alaska coastal plain to oil and gas exploration and drilling, reversing Biden-era decision.

- (US) Trump Admin planning to open nearly all of US coast to offshore drilling exploration - press.

Europe

- (IE) Ireland Oct Consumer Confidence Index: 59.9 v 61.7 prior.

- (UK) Oct GfK Consumer Confidence: -17 v -19 prior.

- (UK) CBI INDUSTRIAL TRENDS TOTAL ORDERS: -38 V -28E.

- (UK) BOE's Dhingra (dovish dissenter): Expect tariffs to lead to lower overall growth and some downward pressure on prices in the medium term.

- (TR) TURKEY CENTRAL BANK (CBRT) CUTS ONE-WEEK REPO RATE BY 100BPS TO 39.50%; AS EXPECTED.

- (CN) China MOFCOM: EU sanctions on Chinese firms (due to dealings with Russia) violate consensus and damage trade relation; Strongly oppose these sanctions.

- (EU) EURO ZONE OCT ADVANCE CONSUMER CONFIDENCE: -14.2 V -15.0E.

- (RU) Russian Pres Putin: Russia.

Levels as of 01:20 ET

- Nikkei 225 +1.4%, ASX 200 -0.2% Hang Seng +0.7%; Shanghai Composite +0.6%; Kospi +2.4%.

- Equity S&P500 Futures +0.2%; Nasdaq100 +0.3%; DAX +0.2%; FTSE100 +0.1%.

- EUR 1.1606-1.1622; JPY 152.48-153.01; AUD 0.6496-0.6518; NZD 0.5745-0.5759.

- Gold -0.5% at $4,099/oz; BTC +1.9% at $111,120; Crude Oil -0.5% at $61.48/bbl; Copper +0.4% at 5.1058/lb.