US officials showed cautious optimism after the surprise Iran talks

Asia market update: US officials showed cautious optimism after the surprise Iran talks; Nasty PMI reading seen in AU; China President Xi is visiting the US from Sept 23-25th; Markets tread water after recent gains; PBOC finally weakened CNY.

General trend and developments

- During the NY session, trading keyed off of lower energy prices as WTI slipped below $90/bbl. Fresh talks between US and Iran were revealed at the UN. Saudi Arabia’s oil supply outlook, also, appears to be improving.

- PBOC finally weakened the Yuan; Trump to host arrival ceremony with China President Xi on Wed at 6 pm ET.

- Australian bond yields move lower amid the continued pullback in oil prices. Sept prelim manufacturing PMI also disappointed. The renewed decline in new manufacturing orders weighed on overall growth, according to analysts. Stronger bond auction demand was seen as the government paid a higher yield [Australia sells A$1.0B v A$1.0B indicated in 4.75% Oct 2037 Bonds: Avg Yield: 5.296% v 5.2133% prior; Bid-to-cover: 4.16x v 3.21x prior].

- RBA officials, meanwhile, continue to make the rounds ahead of expected Sept rate hike [Sept 29th]. Board member Ross recently commented on whether a ‘wage-price’ spiral is likely [Sept 22nd]; The probability of a Sept RBA rate hike is now above 85%, according to OIS. Upcoming key data releases for Australia include Aug jobs data which is due on Sept 24th [Thurs]. CPI is due on Sept 30th (Wed).

- Wednesday has, thus far, been another quiet session for USD/JPY. The Trump/Takaichi meeting looked uneventful; Japanese markets return from holiday on Thurs.

- Broadcom [AVGO] China 'takes stock' of Broadcom gear amid domestic AI drive; China authorities are examining the use of the co's hardware in state-backed data centers – FT; Specifically, China is surveying whether Broadcom has used its position as market leader to bundle other products or impose large purchase requirements for up to ‘tens of thousands’ of switch chips.

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

- Tue Sep 22nd: EU Prelim Sept Consumer Confidence, (Mon night, AU Prelim Sept S&P Mnfg/Svcs PMI, IN Prelim Sept HSBC Mnfg/Svcs PMI, SG Aug CPI & Core CPI, ID Interest Rate Decision, TW Aug Industrial Production).

- Wed Sep 23rd: EU Prelim Sept HCOB Mnfg/Svcs/Composite PMI, US Prelim Sept S&P Mnfg/Svcs/Composite PMI, (Wed night, JP Prelim Sept S&P Mnfg/Svcs PMI, AU Aug Unemployment Rate).

- Thu Sep 24th: EU ECB Economic Bulletin, HK Aug Trade Balance, US Aug Building Permits & New Home Sales, (Thu night, SG Aug Industrial Production).

- Fri Sep 25th: US Aug Durable Goods Orders.

Holidays in Asia this week

- Mon Sep 21st: Japan.

- Tue Sep 22nd: Japan.

- Wed Sep 23rd: Japan.

- Thu Sep 24th: South Korea.

- Fri Sep 25th: China, South Korea, Taiwan.

Headlines/economic data

Australia/New Zealand

- ASX 200 Index opens +0.3% at 8,783.

- (AU) RBA board member Ross commented on whether a ‘wage-price’ spiral is likely – update from Sept 22nd.

- Australia sells A$1.0B v A$1.0B indicated in 4.75% Oct 2037 Bonds: Avg Yield: 5.296% v 5.2133% prior; Bid-to-cover: 4.16x v 3.21x prior.

China/Hong Kong

- Hang Seng Index opens -0.1% at 25,064.

- Shanghai Composite Index opens flat at 3,951.

- (US) White House comments on Trump schedule for Wed: Trump to host arrival ceremony with China President Xi on Wed at 6 pm ET.

- Xi is not likely to bring CEOs to summit where Trump is seeking deals - US financial press.

- The wife of the US seismologist being held in China said she has been 'assured' that Trump will ask Xi to free him – Press [**Reminder Sept 9th: HUAWEI.CN Faces a U.S. criminal trial just weeks ahead of the Trump-Xi meeting.- WSJ].

- China PBOC sets the yuan mid-point at 6.7468 v 6.7459 prior.

- China PBOC Open Market Operation (OMO): Sells CNY8B in 7-day Reverse Repos; Net drains CNY102B v injects CNY35B prior.

- (CN) China PBOC sells CNY60B v CNY60B indicated in 6-month bills in Hong Kong at 1.37%.

- China to make loans more ‘targeted’ in order to curb involution – Chinese press.

- China passive index bond funds >CNY2.0T – Chinese press.

- (CN) Reportedly China considering new measures to attract international talent to work in China, specifically in the advanced manufacturing sector - press [EU market close].

- China MOFCOM adjusts catalogue of exports of precursor chemicals; Bans certain chemical exports to six countries including U.S., Mexico, Canada.

- Hong Kong Finance Chief Chan: Affirms NO intention to change the HKD peg to the USD.

- Hong Kong regulators are planning to unveil Yuan and market link measures on Wed - SCMP.

- China probes DeepSeek and Moonshot over data breaches to Claude - The Information.

- China Vanke [2202.HK] Reportedly China financial regulators ask some banks not to classify overdue Vanke loans as non-performing, extending loan repayments - press.

Japan

- Japanese markets return from holiday on Thurs.

- (JP) US President Trump: Japan is doing well under Takaichi.

- (JP) Japan PM Takaichi: Reiterates working to help stabilize the Strait of Hormuz; agreed with Trump on economic security ties; Had candid exchange with Trump about the International Criminal Court.

- SoftBank Group: Follow-up The expected pricing guidance has been issued for the co's USD-denominated bond sale; the guidance for the 3.5 year bonds is 8.75-8.875%, 9.375-9.50% for the 5.5-year bonds; The guidance for the 7.5 year bonds is 9.75-9.875%; The co. was said to draw >$20B in early interest for the junk bond offering, according to earlier released press reports.

Korea

- Kospi Index opens +1.9% at 7,153.

- South Korea Sept Consumer Confidence: 106.6 v 104.5 prior.

- South Korea Aug Retail Sales Y/Y: 7.7% v 6.4% prior.

- (KR) South Korea President Lee plans to meet with US President Trump on the sidelines of the UN General Assembly; both leaders affirmed commitment to deepening cooperation in various areas [nuclear submarines, fuel reprocessing, shipbuilding, wartime control transfer] - Press.

- (KR) South Korea PM Lee announces peace coexistence plan Korean peninsula - UN speech [EU market close].

Other Asia

- Asian Development Bank (ADB): Affirms China 2026 GDP growth forecast at 4.6%; raises 2027 Asia inflation forecast from 3.4% to 3.5%, lower the 2026 inflation forecast from 4.3% to 4.2%.

- India Sept Preliminary Manufacturing PMI: 55.7 v 52.8 prior (63rd month of expansion); Services PMI: 55.8 v 54.1 prior.

- Singapore Aug CPI M/M: 0.6% v 0.6%e; Y/Y: 2.3% v 2.3%e.

- Taiwan Aug export orders Y/Y: 71.4% V 63.0%E; Export Orders from US Y/Y: 88.9% v 88.9% prior.

- Taiwan Aug Unemployment Rate: 3.3% v 3.3%e.

North America

-(US) Pres Trump: Have been talking with Iran, even today officials talked for three hours; Discussed energy, immigration and Rolls Royce with UK PM Burhman [US market close].

-(US) Pres Trump: Ukraine Pres Zelenskiy and I are figuring out a solution to end the war; US relationship with Ukraine and Europe is strong [US market close].

-(US) US-China safety mechanism will consist of a channel between Treasury Sec Bessent and China Vice Premier He Lifeng in the event of an AI-related national security event - Politico [US market close].

-(US) Treasury $69b 2-year note auction draws 4.787% v 4.204% prior; bid-to-cover: 2.63x v 2.60x prior and 2.58 over the last 12 auctions [US market close].

-(US) Treasury Sec Bessent: Examining whether ban on diesel exports is feasible [US market close].

-(US) SEPT RICHMOND FED MANUFACTURING INDEX: -2 V 2E; Prices paid (current conditions) 7.08 v 6.22 prior [US market close].

-(US) Sept Philadelphia Fed Non-Manufacturing Activity: -22.0 v -8.7e; Prices Paid: 37.8 v 29.2 prior [US market close].

-(US) Weekly API Crude Oil Inventories: +1.8M v +7.1M prior [US market close].

-(US) Fed’s Barkin (non-voter): Last week's rate hike will help restore price stability; We will see if more hikes are needed [US market close].

-(US) Fed's Collins (non-voter): Now see an increased likelihood of future scenarios in which inflation remains notably above 2%; Supported last week's rate hike [US market close].

-(US) ANTHROPIC.IPO Introducing Claude Opus 5.5, now available on all platforms - company website [**Note: Claude Opus 5.5 (max with fallback) scores 58 on Artificial Analysis's Intelligence Index, +5ppts over Fable 5.1 and GPT-6 Ast [US market close].

-(US) OPENAI.IPO Introduces GPT-6 Sol and GPT-6 Luna in Work and Codex beginning today for All Plus, pro, Business and Enterprise users; Cuts pricing 50% versus prior promotions [US market close].

-Anthropic: Said to be in talks to secure control of more data centers, discusses up to 1Gw data center lease with Stream Data Centers - The information.

-KB Home [KBH] Reports Q3 $1.05 v $0.88e, Rev $1.30B v $1.29Be; Market conditions weakened further after the June call; Resale inventory is at a decade high and becoming a more formidable competitor; sellers are beginning to “capitulate” through lower prices or higher concessions, particularly in parts of Texas and Florida, requiring KB Home to remain closely tethered to local resale pricing.

-Boeing [BA] The co's unions said to 'recommend' the co's latest contract offer; SPEEA said representatives on both councils voted by the required 60% supermajorities to make the recommendations.

-(BR) Brazil Central Bank (BCB) Sept Minutes: Sees proof tight policy is gradually slowing economy [US market close].

-(AR) Reportedly US officials told Argentina that renegotiation of trade deal is off the table - press [US market close].

Europe

- (RU) US Secretary of State Rubio plans to meet with Russia Foreign Min Lavrov in NYC at 9 am ET on Wed.

- (EU) Eurozone Sept advance consumer confidence: -16.5 V -16.0E [EU market close].

- Netherlands Q2 Final GDP Q/Q: 0.6% v 0.4% prelim; Y/Y: 1.6% v 1.3% prelim.

- (UK) Sept CBI industrial trends total orders: -9 V -35E [EU market close].

- (HU) Hungary central bank (MNB) leaves base rate at 5.50%; as expected [EU market close].

- (HU) Hungary Central Bank (MNB) post rate decision statement: Lowering inflation target from 3.0% to 2.5%, effective from Jan 1st 2028 [EU market close].

Middle East

- (IR) Witkoff comments on Iran: Mediators will continue their work; hopes talks will be constructive and promising; confirms engaged in lengthy talks with the delegation from Iran.

-(IR) US President Trump: Kushner and Witkoff met with Iranian mediators, including Foreign Min Araghchi; There is a lot of momentum for Iran to make a deal.

-(IR) President Trump: I urge Iran to make a deal; We will get one done one way or another - UN General Assembly speech [US market close].

-(IR) Iran's strict conditions to open the Strait of Hormuz were the reason to accept Witkoff's request for meeting - Iranian state media.

-(IR) Iran Foreign Ministry Spokesperson: Confirms engagement with the US side in New York occurred through Qatar mediator.

-(SA) Saudi Arabia said to be restarting East-West Oil pipeline; prepares to resume Crude Oil exports from Yanbu port later today - CGTN'S X post [EU market close].

-(IR) 3 commodity vessels transited the Strait of Hormuz on Tues, below the 10-day moving avg of ~15; cites shipping data - financial press.

-(IR) Sec of State Rubio: Don't think anything is scheduled with Trump and Iran Pres but Trump is open to meeting anybody; Open to Iran meeting at UN [US market close].

- (IR) Iran President arrives in NY (as expected) - IRNA.

Levels as of 01:20 ET

Nikkei 225 closed; ASX 200 +0.2; Hang Seng -0.9%; Shanghai Composite -0.3%; Kospi +0.4%.

Equity S&P500 Futures +0.1%; Nasdaq100 flat; DAX +0.4%; FTSE100 +0.2%.

EUR 1.1451-1.1426 ; JPY 157.68-157.34 ;AUD 0.7118-0.7098 ; NZD 0.5730-0.5700.

Gold +0.1% at $4,379/oz; BTC +0.6% at $86,834 ; WTI Crude Oil -1.3% at $89.33/bbl; Copper -0.3% at $6.8238/lb.