US Sept Retail Sales and PPI in focus along with corporate earnings

Asia market update: Bond traders ignore US CPI and focus on equity weakness and AI-credit concerns ahead of TSMC earnings; Kospi circuit breaker triggered for the first time since Jul; CHF and JPY rise on safe-haven demand; US Sept Retail Sales & PPI in focus along with corporate earnings.

General trends and developments

- Chinese shipping firms collapse amid capacity concerns. The US is said to be discussing lifting some sanctions on shadow fleet vessels in attempt to lower global freight rates and boost oil flows in Middle East [financial press].

- Equity market headwinds include tech earnings/credit concerns and higher US inflation: US equity futures were mixed following a firmer-than-expected September CPI report with Nasdaq FUTs opening -0.1% to 30,155 (vs. 30,183 at close) and S&P 500 FUTs opening +1.3% to 7,873 (vs. 7,770 at close).

- US Headline CPI reading came at +0.6% m/m and +3.7% y/y (vs. +0.6%e and +3.6%e respectively), with the Fed’s preferred inflation gauge Core CPI reading at +0.3% m/m and +2.6% y/y (vs. +0.2%e and +2.5%e respectively). The inflation prints were driven by unadjusted components of fuel oil (+74.2%), gasoline (+34.2% y/y), while housing (+3.2% y/y) and food (+2.5% y/y) remained stable. Following the data, FED CME market probabilities priced in a 33.2% of at +25bps rate hike to 4.00-4.25% (vs. 22.1% a day earlier), indicating a +11.1% market probability increase. Fed’s Daly (non-voter, dove) subsequently stated that the Fed is more likely than not to need further rate hikes, though they are not needed urgently.

- Anthropic reported in an FT financial report that Q3 revenues surged nearly ~50% to $16.8B (vs. $11.5B in Q2), with the company stating positive cash flows for the quarter. Separately, the White House’s first AI task force meeting is scheduled for tomorrow, as the administration continues its work on AI-related policy and coordination amid looming AI financing concerns.

- Weaker Aussie jobs data will likely lead to a higher probability of the RBA leaving rates unchanged in Nov, the focus now shifts to CPI report [Wed, Oct 28th] [the unchanged probability was >70% ahead of the data]: Australia’s September labor force data came in much weaker than expected, with employment falling -39,300 (vs. +20,000 expected) and the unemployment rate remaining at a five-year high of 4.7% (prior revised up from 4.6% to 4.7%). The decline was driven by part-time employment change at -73.7K (vs. +33.3K prior), and only partly offset by full-time employment change at +34.4K (vs. -4.0K prior). Following APRA & RBNZ completing their first joint bank stress test to promote the trans-Tasman resilience since 2017, with results indicating the banking systems would remain resilient through a severe downturn in both economies. The ASX RBA Rate Tracker is currently pricing in a 73% probability of a hold at 4.60% and a 27% probability of a +25bps hike to 4.85%. RBNZ Chief Economist Conway, meanwhile, affirmed the Oct rate meeting is ‘wide open’ [Oct 28th].

- BOJ hawkish official Koeda did not address the sharp decline in BOJ rate hike probabilities, after the Oct probability plunged to only 5% as of Wednesday’s close. Koeda, also, would still like to examine monetary policy lags. BOJ Gov Ueda plans to attend the G20 in Thailand between Oct 13-17th.

- The Shanghai Composite Index opened down by -1.5% to 3,710, its lowest level since August 2025. The Hang Seng Index opened down by -0.8%, followed by the Hang Seng AI Index at -4% and the China CSI AI Index at -4%. China’s September YTD New Yuan Loans and Aggregate Financing read slightly higher-than-expected at 11.52T (vs. 11.47Te) and 27.46T (vs. 27.25Te) respectively, reflecting quarter-end and stimulus-driven rebound following the -0.25bps PSL rate cut in late-September. However, M2 Money Supply growth slowed further to 7.2% (vs. 7.4% expected) since March 2025, indicating still-weak underlying domestic demand.

- US equity FUTs +#% to +#% 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 -0.5% at 8,684.

-(AU) Australia Sept employment change: -39.3K V +20.0KE; unemployment rate: 4.7% V 4.6%E.

-(AU) APRA & RBNZ complete joint bank stress test to promote trans-Tasman resilience: The results indicate the banking systems would remain resilient through a severe downturn in both economies.

-(NZ) RBNZ’s Conway (chief economist): New Zealand felling effects of oil price shock. New Zealand dollar decline not good for CPI projections. Sees upside risk to Q4 CPI forecast - US Financial Press Interview.

-(NZ) New Zealand sells NZ$25M v NZ$25M indicated in 2.50% Sept 2040 Inflation-indexed Bonds; Avg Yield: 3.1325%; Bid-to-cover: 5.08x.

-(NZ) New Zealand sells NZ$450M vs. NZ$450M indicated in 2032, 2036 and 2054 bonds - update.

China/Hong Kong

-(CN) Shanghai Composite Index opens -1.5% at 3,710 (lowest level since August, 2025); (HK) Hang Seng Index opens -0.8% at 24,119; Hang Seng AI index -4%; China CSI AI Index -4%.

-(CN) China Sept YTD new Yuan loans (CNY): 11.52T V 11.47TE [EU market close].

-(CN) China Sept YTD aggregate financing (CNY): 27.46T V 27.25TE [EU market close].

-(CN) China Sept M2 money supply Y/Y: 7.2% V 7.4%E [EU market close].

-(CN) China Ministry of Foreign Affairs (MOFA): China's Wang Yi meets Russian counterpart.

-(CN) China corporate loan rates remain <3.0% amid ample liquidity as corporate borrowing costs remained 'low' during Sept – PBOC-backed Financial News.

-(CN) US and China 'race' to shape AI agenda ahead of Trump-Xi talks in Shenzhen; cites sources - SCMP.

-(CN) China Vice Premier He meets Bridgewater Associates' Founder Ray Dalio.

-(CN) China PBOC sets the yuan mid-point at 6.7253 v 6.7249 prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY45B in 7-day Reverse Repos; Net injects CNY45B v injects CNY56B prior.

-(HK) 9868.HK CEO Xiaopeng seeks for deeper global collaboration at the 2026 Paris Automotive Summit, Highlighting "Xpeng AI engineering".

Japan

-(JP) Nikkei 225 Index opens -1.2% at 66,875.

-(JP) Nikkei stock average falls below 65,000 for the first time since September 29th.

-(JP) Japan Trade Min Akazawa: Japan, US agree on first chip project under $550B investment plan - Tokyo, Japan.

-(JP) Japan BoJ's Junko Koeda (hawk): I believe that the Bank should adjust the policy interest rate in a timely manner with an eye on the economic and price situation, while keeping in mind the estimated range of the neutral interest rate - Remarks / Greeting at the Kumamoto Prefecture Financial and Economic Meeting, Kumamoto, Japan.

-(JP) Japan Aug Final Industrial Production M/M: -2.4% v -1.7% prelim; Y/Y: 2.7% v 3.4% prelim.

-(JP) Japan Aug Core Machine Orders M/M: 5.2% v 2.3%e; Y/Y: 18.6% v 15.6%e.

-(JP) Japan Fin Min Katayama: No change in US-Japan message since intervention. Won't hesitate to take action on FX if needed - IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand.

-(JP) Major Japanese Banks fixes yen stronger on "Gotobi" day in Japan.

-(JP) Japan names Takebe as new Farm Minister, replacing Yana - NHK.

-(JP) Follow up: Japan Agriculture Minister Takebe: Was appointed Agriculture Minister by PM Takaichi.

-(JP) JERA Invests in Koloma to Explore Natural Hydrogen as a Future Low-Carbon Energy Source.

Korea

-(KR) Kospi Index opens -5.6% at 5,673.

-(KR) Korea Exchange activates circuit breaker on Kospi following Kospi 200 FUTs falling by -8%, programme trading halted for twenty-minutes (first-time since late-July).

-(KR) SKHY Seeking US approval to export chipmaking equipment to China as condition for new US factory - [Exclusive] US financial press.

-(KR) South Korea Aug M2 Money Supply M/M: 0.9% v 0.3% prior.

-(KR) Korea Exchange activates circuit breaker on Kosdaq following Kosdaq 150 FUTs falling by -8%, programme trading halted for twenty-minutes.

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

-(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 has not decided on additional South Korea Treasury bond issuance reductions for Nov- Dec.

-(KR) South Korea Defense Ministry Spokesperson: If goalposts are moved constantly, transfer of operational control from US to South Korea will be impossible.

-(KR) North Korea state media says a submarine test fired cruise missiles on Oct 14th.

-(KR) SKHY Samsung Electronics, SK Hynix fall more than -6% in pre-market trading - NextTrade data.

Other Asia

-(TW) Taiwan dollar weakens to 32.29/USD, lowest level since mid-August 2026; TSMC is due to report Q3 earnings later on Thursday.

-(ID) Indonesia Central Bank Executive Director Hutapea: Continues to be active in the market to ensure the stability of Rupiah.

-(ID) Indonesia's rupiah weakens to as much as 17,955/USD, lowest level since October 1st 2026.

-(PH) Philippines Aug Overseas cash remittances: $3.0B v $3.2B prior; Y/Y: 1.9% v 1.9% prior.

North America

-(US) SEPT CPI M/M: 0.6% V 0.6%E; Y/Y: 3.7% V 3.6%E; Core CPI M/M: 0.3% v 0.2%e; Y/Y: 2.6% v 2.5%e [US market close].

-(US) Fed Beige Book: Two of the twelve districts reported moderate growth in economic activity: expectations tend to be for slight growth [US market close].

-(US) Sept Real Avg Hourly Earning Y/Y: -0.7% v -0.3% prior [US market close].

-(US) MBA Mortgage Applications w/e Oct 9th: -2.7% v -4.2% prior (6th straight weekly decline) [US market close].

-(US) Fed’s Barkin (non-voter): Today's CPI report was higher than I hoped; Not seeing AI job losses at scale [US market close].

-(US) White House CEA Chair Phelan: Referring to inflation report, this is not a good month; Bureau of Labor statistics data is reliable - press interview.

-(US) Fed's Daly (non-voter, dove): We're more likely than not to need more rate hikes; More are needed, but not urgently; It feels imprudent to react when you have time to make a good decision - press interview.

-(US) President Trump: [On inflation report] We're doing well. I hope the pope gets well - Reporters.

-(US) US consider unfreezing some Russian assets to restart Ukraine peace talks - FT.

-(US) White House Administration Official: First White House AI task force meeting is tomorrow - Semafor.

-(US) [Unnamed] US Official: US discussing lifting some sanctions on shadow fleet vessels in attempt to lower global freight rates, boost oil flows in Middle East.

-(US) US considering using "mother of all bombs" against Iran - CNN [citing multiple US officials familiar with the matter].

-(US) NRC streamlines future reactor licensing: the Nuclear Regulatory Commission updated and renewed the certification of Westinghouse's AP1000 reactor design

-(US) US Treasury 5-year yields extend declines, declines by -10bps.

-(US) US 10-year treasury yield falls -7bps to three-week low of 5.1183%; safe-haven bids in focus; Taiwan 10-year government bond yield +12.5bps, TWD declines 0.5% on losses in chip stocks.

-(US) President Trump: DoD will establish testing range in Montana - The President holds a political rally in Kalispell, Montana [Pre-Credentialed Media], Majestic Valley Arena, Kalispell, MT.

-(US) White House Press Secretary Zacharia didn't pass the bar exam - WSJ.

-(US) Pres. Trump: Just spoke with TSMC CEO Wei; The 'terrible' Fed has interest rates artificially high - campaign event.

-(US) ANTHROPIC.IPO*Revenue jumps to $16.8B in Q3 - FT.

-(US) ANTHROPIC.IPO Follow-up: Reportedly said to have Q3 Adjusted Gross Margin: 85%; Adjusted Operating Margin: >11% - US financial press.

-(US) SPCX Senator Thom Tillis (R-NC) calls for DoD Inspector General probe into SpaceX - post on X.

-(US) STARLINK.IPO Senior US Official: Trump Admin had nothing to do with Starlink constraints in Ukraine; Zelenskyy advisers spoke to White House earlier today about restoring service - Axios.

-(US) TIKTOKUS.IPO Received CID from Missouri AG, must comply by Nov. 13 - Press.

-(BR) Brazil Senate advances bill to shorten workweek in intial vote (as expected).

Europe

-IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand for Wednesday 14th October.

-IMF Official: South Korea has benefitted most from AI, Japan benefitting too but much less than Korea in sign of heterogeneity in AI impact on Asian economies - IMF-World Bank 2026 Annual Meetings in Bangkok, Thailand.

-(RU) Russia Dep PM Novak: Talks between Russian and US governments are under way to ensure diesel supplies; Number of Russian refineries completed maintenance [EU market close].

-(EU) ECB's Simkus (Lithuania): Don't see role for ECB intervention on France at present [EU market close].

-(EU) ECB’s Dolenc (acting Slovenia member): Don't see second-round effects yet. Labor market isn't so tight anymore. Must be vigilant on inflation data. Approaching restrictive policy stance - US Financial Press Interview.

-(UK) UK Chancellor of the Exchequer Healy: Tighter ban on Russia-linked shipping services needed.

-(UK) UK Government: UK to provide £17M in funding towards repairs to the Chernobyl nuclear power plant damaged by Russian drone strike last year.

-(UR) Ukraine President Zelenskyy: Ukraine to resume strikes on Russian refineries - FT.

-(UR) France conservative leader Marine Le Pen: France is not in a position to continue to finance Ukraine [EU market close].

-(NL) Netherlands Sept Unemployment Rate: 4.0% v 4.0% prior.

-(NL) ASML.NL EU reportedly set to lift sanction on Chinese firm to save ASML supplier - press.

-(NL) ASML.NL Reports Q3 €12.95 v €11.14e, Rev €11.7B v €11.8Be; Now expect that its supply as currently planned for both 2027 and 2028 will not fully meet the demand of its customers.

-(DE) Germany Fin Min Klingbeil: Worrying that US is opening itself to Russia again - Following G20 Meeting.

-(SE) Sweden Sept PES Unemployment Rate: 3.6% v 3.8% prior.

Middle East

- (SA) Saudi-led Coalition: Intercepted and destroyed a drone in Kingdom's Eastern region.

Levels as of 01:20 ET

Nikkei 225 +#%; ASX 200 +#%; Hang Seng +#%; Shanghai Composite +#%; Kospi +#%.

Equity S&P500 Futures +#%; Nasdaq100 +#%; DAX +#%; FTSE100+#%.

EUR #-#; JPY #-#; AUD 0.6981-0.6945; NZD 0.5635-0.5586.

Gold +0.9% at $4,143/oz; BTC -2.8% at $81,184; WTI Crude Oil -1.0% at $94.13/bbl; Copper -1.4% at $6.5668/lbs.