Warsh’s comments have left traders divided about the Oct FOMC decision

Asia market update: Warsh’s comments have left traders divided about the Oct FOMC decision; Cautious trading in Japan ahead of possible BOJ rate hike on Fri, National CPI also due; Press speculates on Xi’s guest list; Trump still open to diplomatic solution for Iran.

General trend and developments

- The Nasdaq FUTs re-opened flat at 29,303 (v 29,272 prior) and the S&P 500 FUTs opened flat at 7,637 (v 7,623 prior), as the US Fed raised its target range by +25 basis points to 3.75–4.00% in a unanimous 12-0 decision, as expected.

- In the subsequent press conference, Fed Chair Warsh noted that financial conditions are hard to call restrictive, described an attitude of optimism within the FOMC, and emphasized that the predominant focus remains on inflation, while stressing the Fed cannot control individual prices but will act to prevent broader inflation. In line with the longstanding currency peg [(HKD trading band of HK$7.75–7.85 to the US dollar)] the Hong Kong Monetary Authority (HKMA) promptly raised its base rate by the same +25 basis points to 4.25%.

- Following the Fed’s rate decision, South Korean authorities, led by the Bank of Korea (BOK) and Ministry of Finance and Economy (MOFE), held their regular “Market Situation Review Meetings.” The BOK stated it would maintain heightened vigilance over FX and financial markets. Separately, the MOFE assessed that the domestic market impact from the Fed’s rate hike would be limited and stated that authorities stand ready to deploy market-stabilizing measures if bond-market moves become excessive, while continuing to monitor volatility.

- JGB yields have diverged ahead of Friday’s BOJ decision as longer-dated yields have dropped, while the 5-year yield has moved higher by <1bp. With that being said, weekly flows data suggested foreign investors purchased JGBs ahead of tomorrow’s BOJ rate decision, while selling Japanese equities [Japan releases weekly flows data [period ended Sept 11th]: Foreign buying of Japan equities: -¥1.52t v ¥689.6B prior; Japan buying of foreign bonds: ¥1.08T v ¥111.4B prior; Foreign buying of Japan bonds (long-term debt securities): ¥2.24T v ¥444.3B prior].

- LDP heavyweights remain after Japan’s cabinet reshuffle (as expected): Japanese Prime Minister Sanae Takaichi confirmed the well publicized cabinet reshuffle for Thursday, September 17, 2026 (local time). This will be her first cabinet reshuffle since taking office in October 2025. Key figures expected to retain their posts include Economy Minister (economic revitalization/economic security) Minoru Kiuchi, Finance Minister Satsuki Katayama, Defense Minister Shinjiro Koizumi, and Foreign Minister Toshimitsu Motegi. LDP Secretary-General Shunichi Suzuki is also set to stay on. Meanwhile, attention is on potential changes such as a possible replacement for the Education Minister and the inclusion of a cabinet role for the Japan Innovation Party (Ishin) member Hiroshi Nakatsuka, as the party seeks a special mission post to strengthen the coalition.

- US TIC data shed more light on whether Japan sold USTs to fund the late Jul FX intervention [Japan Jul-end Total Holdings of US Treasuries: $1.10T v $1.12T prior]. Recall, some were speculating if Japan had sold USTs to help fund the intervention [Japan end-August Foreign Reserves: $1.21T v $1.29T prior (record m/m decline); Foreign Securities: $0.84T v $0.93T m/m]. The same US data showed that China has continued to lower UST holdings as the PBOC raises purchases of gold. Interestingly, Chinese commercial banks have been reportedly buying US Treasuries over the past few months after lifting dollar deposit rates, according to a press report from Sept 4th.

- WTI Crude FUTs opened flat at $101.95/bbl (v $102.01/bbl prior); Brent Crude Oil FUTs opened -0.4% at $105.16/bbl (v $105.58/bbl prior)
WTI Crude Oil prices have eased from the recent highs [>$105/bbl] amid headlines related to possible de-escalation and supply improvements. Reported military skirmishes has also eased in recent days. As such, Trump reiterated he is still open to a diplomatic solution on Iran. This dovetails, nicely, with the reporting that Trump is reportedly scheduled to hold talks at the UN General Assembly in NY with Gulf leaders next week on Tuesday [September 22nd, 2026], according to Axios. This meeting is expected to include leaders from Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait and Oman.

- Incidentally, the delayed Gulf meeting on the Omani/Iran Strait of Hormuz proposal has still not been rescheduled. Amendments sought by Saudi Arabia were said to be the reason for the delay. Even still there have been positive signs regarding the Saudi geopolitical situation, as of late. The Kingdom could seek to resume 50% of the key East-West pipeline ‘within days’, according to a recent press report. ) Further, US officials were said to have met representatives of Yemen's Houthis in Oman over the weekend.

- After meeting with Iran’s Foreign Min on Wed, China's Foreign Min Wang Yi said he encourages Iran and the US to exercise rationality as all parties are urged to take effective measures to reopen the Strait of Hormuz. China’s position is plausible, especially given its dependence on oil imports. Chinese oil prices have hit record highs on the Shanghai International Energy Exchange, said the FT. As of September 15th, 2026, prices rose as high as CNY929.4/bbl ($138.50/bbl) on the Shanghai International Energy Exchange, the highest level since the contract was first listed in 2018. The Chinese marker generally tracks similar-quality crude benchmarks, with Oman and Murban futures last trading above $126/bbl.

- Nonetheless, the US remains positive on the topic crude oil supplies. According to US Energy Sec Wright, 18Mbbl of oil went through Hormuz yesterday. He further stated on Wed, the US will help escort refined product [not just crude; 7 day avg is about 11M bpd]

- Headlines regarding higher diesel prices remain prevalent: Diesel price increases continue to place pressure on companies and US politicians ahead of the Nov midterm elections. Therefore, the recent actions by US authorities should not be too surprising. The US is planning to allow more flexible hours for truck drivers if they are carrying either gas or diesel, said an earlier released press report. JB Hunt Transport Services [JBHT] shares declined by >10% during Wednesday’s NY trading session amid comments regarding the Q3 outlook and negative impact of diesel prices. The Ukraine war has been the main driver of diesel prices, according to Trump.

- NZ Q2 GDP beat estimates with higher prior revisions. Construction was the largest upward contributor to the overall increase in GDP, up 2.7 percent in the quarter. This was the largest increase in construction activity since the June 2023 quarter [Stats agency]. Oil-price sensitive components weighed on the data [transportation and accommodation]. GDP per capita rose 0.1 percent during the June 2026 quarter. The RBNZ’s Nowcast estimate previously implied Q3 GDP growth of +0.9% [Aug 21st]. Earlier this week, NZ also reported a surge in Q3 consumer confidence, but analysts have questioned whether this momentum is sustainable.

- In Australia, more hawkish comments are possible on Friday when the various RBA board members deliver their parliamentary testimonies. More sell-side analysts have been pricing in additional tightening by the RBA in recent weeks, especially with oil prices remaining elevated.

- US President Trump clarified the WSJ report about delays to the trade talks with Mexico. Trump stated ‘we are very close to a deal with Mexico.’ While the reason for the delay was not specified, the WSJ noted China President Xi’s upcoming US visit as being a possible factor. Mexico is said to be pushing for lower auto tariffs amid the talks with the US. Meanwhile, Trump continues to make economic threats toward the EU and Canada. Specifically, Trump threatened tariffs against the EU, if it ‘acts with bad intentions’. The most recent threat came after the EU offered Canada a role as an ‘associate member.’

- Looking ahead this week (Asian-weighted focus, EST/EDT), key data releases include, the UK BOE Interest Rate Decision, the JP August National CPI & Core CPI followed by the BoJ Interest Rate Decision on Thursday September 17th.

- US equity FUTs +0.5% to +0.6% during Asia trading.

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

-Sun Sep 15th: BRICS Summit, (Sun night, JP July Industrial Production, HK Q2 Industrial Production & PPI).

-Mon Sep 14th: CN Aug New Yuan Loans & Total Social Financing & M2 Money Stock, IN Aug CPI, (Mon night, KR Aug Trade Balance, CN Aug Retail Sales & Industrial Production/Fixed Asset Investment & Unemployment Rate, CN NBS Press Conference, KR July M2/M3 Money Supply).

-Tue Sep 15th: IN Aug Trade Balance, CN Aug FDI, EU July Trade Balance & Sep ZEW Economic Sentiment, US 20-Year Bond Auction, NZ Q2 Current Account, (Tue night, JP Aug Trade Balance).

-Wed Sep 16th: EU July Industrial Production, IN M3 Money Supply, US Aug Retail Sales, RU Aug PPI, US FOMC Interest Rate Decision, US FOMC Press Conference, BR BCB Interest Rate Decision, NZ Q2 GDP, (Wed night, SG Aug Trade Balance & Unemployment Rate, TW CBC Interest Rate Decision, HK Aug Unemployment Rate).

-Thu Sep 17th: EU Aug CPI & Core CPI, UK BoE Interest Rate Decision, US Aug Preliminary Building Permits & Housing Starts & Pending Home Sales, UR NBU Interest Rate Decision, KR Aug PPI, NZ Aug Trade Balance, (Thu night, JP Aug National CPI & Core CPI, JP BoJ Interest Rate Decision, MY Aug CPI & Trade Balance, DE Aug PPI, JP BoJ Press Conference).

-Fri Sep 18th: ECOFIN Meetings, US Aug Industrial Production & Manufacturing Production & Capacity Utilization Rate, AR Aug Trade Balance & Budget Balance.

-Sat Sep 19th: ECOFIN Meetings.

Holidays in Asia this week

-Mon Sep 14th: India.

-Wed Sep 16th: Malaysia.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 Index opens +0.1% at 8,7031.

-(NZ) NEW ZEALAND Q2 GDP Q/Q: 0.2% V 0.1%E; Y/Y: 2.6% V 2.2%E.

-(AU) Australia sells A$100M v A$100M indicated in 1.25% Aug 2040 indexed bonds: Avg Yield: 3.1641% v 2.3346% prior; bid-to-cover: 4.47x v 3.36x prior.

-(AU) IMF: RBA must keep tightening bias, be ready to hike as needed.

-(NZ) New Zealand sells NZ$450M vs. NZ$450M indicated in 2032, 2034 and 2054 bonds.

China/Hong Kong

-(CN) Shanghai Composite Index opens -0.4% at 3,877; (HK) Hang Seng Index opens -0.9% at 24,4812.

-(CN) President Xi: To strengthen advanced manufacturing; High-quality development and high-level security should be coordinated - Xinhua.

-(CN) Chinese oil prices have hit record highs on the Shanghai International Energy Exchange - FT [update].

-(HK) HKMA raises base rate by +25bps to 4.25% [as expected]; Tracking the US Fed.

-(CN) China Aug Swift Global Payments (CNY): 3.3% v 3.1% prior.

-(CN) China's Chief Trade Negotiator Li Chenggang met with a business delegation to discuss issues including US-China economic and trade relation [amid upcoming Trump-Xi summit] - Statement.

-(CN) China's fall grain harvest seen abundant despite El Niño - China Securities Times [Report].

-(CN) USD/CNY China PBOC sets the yuan mid-point at 6.7580 v 6.7628 prior (strongest level since February 3rd, 2023).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY162B in 7-day Reverse Repos; Net injects CNY159B v injects CNY113B prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY600B in 1-day Overnight Reverse Repos.

-(HK) Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue: HK$ may gradually ease after carry trade activity.

-(HK) Hong Kong Airport Aug Passengers Handled: +3.5% y/y; Cargo Volumes: -1.2% y/y.

Japan

-(JP) Nikkei 225 Index opens +1.1% at 64,644.

-(JP) Japan Cabinet Reshuffle: Government Spokesperson: Japan Finance Minister Katayama, Japan Defense Minister Koizumi, Japan Economy Minister Kiuchi to retain all posts in Cabinet Reshuffle [inline].

-(JP) Japan Fin Min Katayama: We have stated our determination to address excessive volatility when we launched Japan-U.S. Joint intervention; Expect BoJ to closely coordinate with government and conduct appropriate monetary policy to achieve 2% price target - Tokyo, Japan.

-(JP) Japan releases weekly flows data [period ended Sept 11th]: Foreign buying of Japan equities: -¥1.52t v ¥689.6B prior; Japan buying of foreign bonds: ¥1.08T v ¥111.4B prior.

-(JP) Japan PM Takaichi to hold press conference at 05:30ET (=18:30 JST).

-(JP) Japan Chief Cab Sec Kihara: Refrain to comment on specific FX moves; Continue close communication with us treasury to sustain orderly forex market - Tokyo, Japan.

-(JP) Japan Econ Minister Kiuchi: To balance strong economy with fiscal sustainability; Will communicate to ease market concerns; Will refrain from commenting on yield trends - Tokyo, Japan.

-(JP) Japan Trade Min Akazawa: To secure conditions for real wages to keep rising - Tokyo, Japan.

-(JP) Japan PM to retain Trade Minister Ryosei Akazawa - Yomiuri.

-(JP) Japan Health Minister Ueno to retain post in reshuffle - TV Asahi.

-(JP) Japanese Ishin's Nakatsuka to be regulatory reform minister - Kyodo.

-(JP) Japan sells ¥3.5T vs. ¥3.5T indicated in 3-Month Bills; Avg Yield: 1.2067% v 1.1149% prior; bid-to-cover: 3.22x v 3.34x prior.

Korea

-(KR) Kospi Index opens +0.9% at 6,779.

-(KR) (KR) Bank of Korea (BOK) releases statement after "Market Situation Review Meeting" convened by Senior Deputy Governor Kwon Min-soo.

-(KR) South Korea Ministry of Finance and Economy (MOFE) releases statement after "Market Situation Review Meeting" convened by South Korea's Deputy Prime Minister and Minister of Finance and Economy Koo Yun-cheol.

-(KR) South Korea Foreign Minister: Military deployment to Hormuz strait has not been decided.

-(KR) North Korea Vice Defense Minister: US arms buildup justifies North Korea's nuclear force building.

-(KR) USD/KRW South Korean won weakens to 1,384/USD, lowest level since August 27th, 2026.

Other Asia

-(IN) India Foreign Ministry: India has noted passage of sanctioning Russia and Iran act in US congress; Monitoring developments in Russia, Iran sanctioning act.

-(IN) USD/INR India Central Bank (RBI) said to be likely selling USD through state-run banks to limit the Rupee weakness – traders.

-(SG) Singapore Aug Non-oil Domestic Exports Y/Y: 46.2% v 35.1%e.

-(TW) USD/TWD Taiwan dollar weakens to 31.958/USD, lowest level since August 20th, 2026.

-(MY) USD/MYR Malaysian ringgit weakens to 4.098/USD, lowest level since June 26th, 2026.

-(TH) Thailand Energy Minister Akanat: Thailand still has sufficient fuel supply; Thai fuel subsidy helps lessen crude price surge.

-(TH) Thailand sells THB35B vs. THB35B indicated in 6-month bills; Avg Yield: 1.01774% v 0.92989% prior; bid-to-cover: 1.42x v 2.33x prior.

North America

-(US) FOMC raises target range by 25 bps to between 3.75-4.00% (as expected); unanimous vote, 12-0 [US market close].

-(US) Fed Chair Warsh: Hard-pressed to call financial conditions restrictive; Heard an attitude of optimism inside the FOMC over the last two days; Our predominant focus is inflation - post rate decision press conference [US market close].

-(US) Fed Chair Warsh: We cannot affect any individual price; Will ensure that any changes in price won't broaden out; Today was a firm and unanimous decision - post rate decision press conference Q&A [US market close].

-(US) US Pres Trump: Interest rates in the US should be 1%, or less; Calls on the Fed to lower interest rates 'fast' - Truth Social [US market close].

-(US) AUG ADVANCE RETAIL SALES M/M: 1.2% V 0.8%E; RETAIL SALES (EX-AUTO) M/M: 1.4% V 0.5%E [US market close].

-(US) SEC Chair Atkins: Will act to give investors certainty in crypto; Can act within SEC authority with or without a crypto law passed through Congress - X post [US market close].

-(US) AUG IMPORT PRICE INDEX M/M: 0.7% V 0.5%E; Y/Y: 7.0% V 6.5%E [US market close].

-(US) SEPT NAHB HOUSING MARKET INDEX: 32 V 34E [US market close].

-(US) DOE CRUDE: -0.6M V -1.5ME; GASOLINE: +0.8M V -1ME; DISTILLATE: +1.6M V 0ME [US market close].

-(US) Atlanta Fed GDP Now: Raises Q3 GDP estimate from 4.4% to 5.1% [US market close].

-(US) President Trump: Warsh has a tough board; Still have confidence in Fed Chair Warsh - The President delivers Remarks [Restricted Pool], Gastonia Municipal Airport, Gastonia, NC.

-(US) Follow up: President Trump: Iran war is going to end very soon; Iran not ready to make a deal; Could have a deal any time we want; War will end soon because Iran can't go on; It's going to be a really good conclusion - The President delivers Remarks [Restricted Pool], Gastonia Municipal Airport, Gastonia, NC.

-(US) President Trump reportedly scheduled to hold talks at the UN General Assembly in NY with Gulf leaders next week on Tuesday [September 22nd, 2026] - Axios.

-(US) Majority of US House votes to impose sanctions, tariffs over Russia's invasion of Ukraine; Voting continues.

-(US) White House CEA Chair Phelan: It was a mistake for Fed to raise rates today.

-(US) US allows more flexible hours for trucks carrying gas, diesel - US financial press.

-(US) House has enough votes to pass the data center cost bill; also passes employee stock ownership valuation bill - US financial press.

-(US) Some US officials raise concerns about China technology theft in sale of F-35 jets to Saudi Arabia - NYT.

-(US) FCC Carr: Wireless spectrum auctions over the next couple of years could easily generate more than $100B for the US.

-(US) Tier 1 Brokerage Firm Analysts revise Fed rate forecasts following FOMC decision and updated staff projections.

-(US) S&P Dow Jones Indices: Notes delay in end-of-day files for indices, cites validation issue; files are expected to be available at 11 pm EST; the issue was later resolved at 2:47 GMT.

-(US) Nuclear services firm Holtec said to suspend US IPO plan.

-(US) AMZN Raises minimum starting pay for US fulltime core operations employees to $20/hr; Average total compensation expected to exceed $32/hr [US market close].

-(US) AAPL Apple is developing enterprise servers using its own chips - The Information [US market close].

-(US) AAL 10:45 ET Morgan conf: Demand “remains strong” despite global uncertainty, supporting its view that substantial revenue opportunities remain ahead. [US market close].

-(US) UAL 11:30 ET Morgan conf: Demand is “incredibly resilient” despite higher fuel prices, with consumers continuing to spend on travel experiences and accept higher fares. [US market close].

-(US) CIEN Revenue is expected to more than double by 2029 with potential upside driven by supply; Provides FY27 financial 'floors' along with FY29 targets - Investor Forum slides [US market close].

-(US) XOM Reportedly near prelim deal to reinvest in Venezuela oil fields; Deal could still fail or be extended beyond Sept - WSJ [US market close]

-(US) OPENAI.IPO Statement: Launches new framework for tracking, disclosing model misalignment; publishes six reports on unexpected behavior observed in last 6 months.

-(US) OPENAI.IPO CEO Sam Altman reportedly to attend Trump-Xi dinner scheduled for next week - US financial press.

-(US) GOOGL Has reportedly lost the advertisement tech monopolization case to DOJ - US financial press.

-(US) GOOGL US Judge releases decision on why she declined to breakup Google's ad business, says Google and the DOJ should propose final judgement - press.

-(US) GOOGL Ex-Deepmind staffers startup Emulate nears $4B valuation - FT.

-(US) AAPL Chairman Tim Cook to attend Trump-Xi dinner scheduled for next week.

-(US) GNRC Forms pact with Amazon; Issues Amazon warrant for up to 1.69M shares at $200.93/shr (~2.9% of outstanding shares); $2.4B initial generator deliveries expected in 2027-28 - filing.

-(US) CRM Guides FY30 Rev $63B v $61.4B estimate; notes the FY30 revenue framework remains following Informatica.

-(BR) Brazil central bank (BCB) cuts selic target rate by 25bps to 13.75%; as expected; unanimous decision.

-(AR) Argentina Aug UTDT Leading Indicator: -0.3% v -0.7% prior.

-(PE) Peru Senate has confirmed Peru Central Bank Governor Velarde for another term - Press.

Europe

-(EU) EU Commission Pres Von der Leyen delivered her State of Union speech in EU Parliament and noted that a stronger and independent Europe was now emerging [EU market close].

-(EU) Euro Zone July Industrial Production M/M: -0.1% v -0.2%e; Y/Y: 0.0% v -0.1%e [EU market close].

-(RU) Russia govt said to be plans to extend diesel-export ban through Oct [EU market close].

-(DE) Germany Economic Ministry: Continuously assessing the gas sector; maintaining an open dialogue with market participants [EU market close].

-(SE) SVT projects that the Swedish center-left bloc is on track to win the election, ending 4 years of conservative rule; General elections were held on Sept 13th to elect 349 members of the Riksdag [EU market close].

-(EU) ECB Wage Tracker: Raises 2026 expected wage growth from +2.6% to +2.7% [EU market close].

-(EU) EU said to have asked China to voluntarily limit car exports - FT.

-(UK) Aug CPI M/M: 0.5% v 0.5%e; Y/Y: 3.1% v 3.1%e [EU market close].

-(UK) Aug PPI Input M/M: 0.3% v 0.4%e; Y/Y: 6.1% v 5.4%e; Aug PPI Output M/M: 0.7% v 0.5%e; Y/Y: 3.7% v 3.3%e [EU market close].

-(UK) Vue Cinemas explores London IPO - FT.

-(UK) BP.UK BP Whiting Refinery: Company remains committed to working toward a fair, mutually acceptable agreement; To meet with Union a second time this week.

-(IT) Italy Aug Final CPI M/M: 0.5% v 0.5% prelim; Y/Y: 3.3% v 3.3% prelim [EU market close].

-(SE) Sweden Aug Unemployment Rate: 8.5% v 7.8% prior; Unemployment Rate (seasonally adj): 8.9% v 8.6%e; Trend Unemployment Rate: 8.7% v 8.7% prior [EU market close].

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

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

Middle East

-(SA) Saudi Arabia seeks to resume half of their key East-West oil pipeline within days - press.

-(IR) China's Foreign Min Wang Yi: Encourages Iran and US to exercise rationality; Urge all parties to take effective measures to reopen Strait of Hormuz - comments after meeting with Iran Foreign Min [EU market close].

-(IR) Energy Sec Wright: 18Mbbl of oil went through Hormuz yesterday; US will help escort refined product, not just crude; 7 day avg is about 11M bpd [US market close].

-(IR) Commodity vessels transiting via Strait of Hormuz at 3 on Wednesday vs. 4 on Tuesday, remaining below the 10-day average of ~17 commodity vessels - Shipping Data.

-(IR) Hundreds of Iranian truck drivers are currently stuck at Iran's border with Pakistan - WSJ.

-(YE) US officials said to have met representatives of Yemen's Houthis in Oman over the weekend; Meeting was held at US Embassy in Muscat and helped by Oman - press [US market close].

Levels as of 01:20 ET

Nikkei 225 +0.4%; ASX 200 +0.3%; Hang Seng -1.0%; Shanghai Composite -0.2%; Kospi +0.2%.

Equity S&P500 Futures +0.5%; Nasdaq100 +0.6%; DAX +0.5%; FTSE100 +0.2%.

EUR 1.1473-1.1456; JPY 156.32-155.88; AUD 0.7113-0.7082; NZD 0.5730-0.5710.

Gold +0.5% at $4,287/oz; BTC +0.7% at $76,556; WTI Crude Oil -0.3% at $102.15/bbl; Copper +1.3% at $6.5288/lbs.