Asia market update: China’s Aug data was mixed; Trump dealt election-related Supreme Court setback; Cautious trading seen ahead of this week’s key rate decisions [including the US Fed and BOJ]; Hynix labor vote is scheduled for Sept 15-16th; JGB yields rise on speculated defense spending increase.
General trend and developments
– The US market re-opened during the Asia markets modestly higher, the Nasdaq FUTs opened +0.1% at 29,519 (vs. 29,490 prior) and the S&P 500 FUTs opened +0.1% at 7,708 (vs. 7,700 prior).
– China markets opened largely subdued ahead of the release of the monthly economic data , with the Shanghai Composite down -0.1% at 3,879 and Hong Kong’s Hang Seng up +0.1% at 24,934.
– China’s August 2026 economic data showed mixed results [Fixed-asset urban investments continued to contract down -7.2% (vs. -7.1% expected) and property investment plunging -19.9% year-to-date (vs. -20.1% expected), though new home prices eased only slightly by -0.1% month-on-month (vs. -0.2% prior) and the surveyed jobless rate edged up to +5.3% (vs. +5.2% expected)].
– In Aug, retail sales and FAI remained drags on the Chinese economy, while industrial production rebounded more than expected. The weak retail sales should come as no surprise, as Chinese auto sales continued to contract sharply in Aug [China Aug Retail Passenger Vehicle Sales -23.6% y/y – PCA]. Industrial production beat estimates as manufacturing output rose by 6.1%. There was some evidence that the figure supported by tech. Particularly, the added value of high-tech manufacturing grew by 16.7%. By product, output of lithium-ion batteries, industrial robots, and 3D printing equipment increased by 57.2%, 34.6%, and 29.9% year-on-year, respectively, according to NBS. Overall, NBS again characterized China’s monthly economic operations as ‘steady’. Interestingly, China did not initially comment on the feasibility of attaining the 2026 GDP growth forecast [4.5-5.0%].
– Commodity/oil markets opened the session modestly higher, with the US benchmark WTI Crude FUTs opening +0.1% at $101.98/bbl (vs. $101.89/bbl prior) and the global benchmark Brent Crude Oil FUTs opening +0.4% at $106.63/bbl (vs. $106.20/bbl prior). Oil prices remain elevated following Iran’s IRGC claiming an oil tanker caught fire and exploded after colliding with mines in the Strait of Hormuz, as the claim follows US CENTCOM’s Commander stating that international shipping lanes are open, confirming successful clearing of sea mines laid in the Strait of Hormuz [comments from August 27th, 2026]. Further, the delayed Gulf meeting on the Omani/Iran Strait of Hormuz proposal not been rescheduled, injecting even more uncertainty, in the face of the recent violence in the region, Trump again affirmed that US/Iran talks are still a possibility. ARAMCO has, also, yet to issue a formal assessment on its production or the status of the East-West Pipeline.
– With the Strait of Hormuz and Red Sea shipping chokepoints constrained, Oman has come into sharper focus amid the search for alternatives. On Monday, the country’s Energy Minister even suggested there is a need to diversify exit points and identify alternative export options, be it through Oman or Yemen. Incidentally, Saudi Arabia was said to offer crude oil near Oman, according to a financial press article released on Aug 17th.
– AI governance: China and Trump appear to agree on limiting AI-related regulations amid the ongoing ‘tech war’ and ahead of the Trump/Xi summit. President Trump pushed back against Anthropic calls to throttle frontier AI models, debating that the only control that AI needs is a strong President [referencing himself] and claims that “AI taking over the world is a hoax”. In related developments, Microsoft issued a code of conduct urging the AI industry to prioritize safety and maintain human control over the technology.
– Separately, China released its AI Safety Governance Framework 3.0 to address emerging risks. Beijing ,also, pushed back against recent calls from U.S. tech executives to slow AI development.
– 20-year JGB auction sees slightly stronger demand ahead of Friday’s BOJ decision; UST is also due to sell 20-year bonds. Recall, Japan is the largest foreign holder of US Treasuries. This is particularly interesting amid the recent reports of US Treasury Sec Bessent commenting on the BOJ and JP rates. Both countries, also, launched joint FX intervention in late Jul. Some, where even 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].
– Globally multiple central banks have had to confront a higher bond yield environment with the Iran war and surge in energy prices. Conversely in China, there have been additional signs that the PBOC is becoming unnerved by the declines in long-term bond yields. Recent reports indicated the central bank is planning to add a metric aimed at having banks cut their long-dated bond holdings. Recall, the PBOC had already surveyed financial firms on the topic of duration, back in late Aug. With that being said, Chinese bonds face ‘spiking’ volatility amid the ending one-way ‘rally’ [Chinese press from Aug 28th].
– President Zelenskyy stated on a post on X, that Ukraine had proposed its partners secure an agreement with Russia to halt strikes on critical infrastructure (energy facilities, ports, logistics, food and pharmaceutical warehouses). [Prior Trump concerns about diesel prices].
– Additionally, as ECB’s Stournaras (Greece) states timely ECB rate hikes limit the risks of more painful hikes down the road, Germany was said to lobby EU on new China policy with the possibility of more tariffs. (**Note: Recall around March, 2026, TTF was trading near multi-month highs at ~€70/MWh and was described as the highest levels seen since January 2023, this comes amid a backlog of intensifying Chinese EV competition).
– US equity FUTs -0.5% to -0.4% 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 -0.3% at 8,722.
-(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 73.9 v 71.9 prior.
-(AU) [Australian co.] Firmus seeks to raise up to $5B in Australian IPO – Sources.
-(AU) BHP.AU Australia’s Combined BHP Ports Union: Workers, their elected representatives met with BHP, formally rejected BHP’s proposal; Will begin this week processes of arbitrating a final agreement with fair work commission.
-(NZ) New Zealand Aug Total Card Spending M/M: -0.5% v 1.0% prior.
China/Hong Kong
-(CN) Shanghai Composite Index opens -0.1% at 3,879; (HK) Hang Seng Index opens +0.1% at 24,934.
-(CN) China Stats Agency (NBS): August economic operations generally steady, but unfavourable impacts from external environments deepening – Press conference on China’s economic performance in August, 2026.
-(CN) China Aug Retail Sales Y/Y: 0.4% V 0.8%E.
-(CN) China Aug Industrial Production Y/Y: 5.2% V 4.8%E.
-(CN) China YTD fixed urban assets Y/Y: -7.2% V -7.1%E.
-(CN) China Aug Surveyed Jobless Rate: 5.3% v 5.2%e.
-(CN) China Aug New Home Prices M/M: -0.1% v -0.2% prior.
-(CN) China Aug YTD Property Investment Y/Y: -19.9% v -20.1%e.
-(CN) China releases AI safety governance framework 3.0 to address emerging challenges – press [EU market close].
-(CN) China criticizes warnings from US tech executives to slow AI development – US financial press [update].
-(CN) Companies left China to dodge tariffs, now some are heading back – financial press [update].
-(CN) China Finance Ministry to auction 28-day bills, 91-day bills, and 3-year bonds.
-(CN) USD/CNY China PBOC sets the yuan mid-point at 6.7670 v 6.7698 prior (strongest level since February 3rd, 2023).
-(CN) China PBOC Open Market Operation (OMO): Sells CNY0B in 7-day Reverse Repos; Net injects CNY92B v injects CNY504B prior (second straight nil injection, fifteenth time since 2020).
-(CN) China PBOC Open Market Operation (OMO): Sells CNY597B in 1-day Overnight Reverse Repos.
Japan
-(JP) Nikkei 225 Index opens -0.4% at 63,226.
-(JP) Japan sells ¥700b vs. ¥700b indicated in 20-year JGB bonds; AVG yield: 3.8560% v 3.6980% prior; bid-to-cover: 4.01x v 3.98x prior.
-(JP) Japan to consider raising defense spending target to 3.5% in mid-term – press.
-(JP) Japan July Tertiary Industry Index M/M: 0.4% v 0.3%e.
-(JP) Follow-up: Japan considers drone-based defense option under new policies – financial press.
Korea
-(KR) Kospi Index opens +0.4% at 6,659.
-(KR) South Korea Aug Export Price Index M/M: -3.7% v +0.9% prior; Y/Y: 42.4% v 48.9% prior.
-(KR) South Korea July M2 Money Supply M/M: 0.3% v 0.7% prior.
-(KR) South Korea Finance Minister nominee Lee Hyoung-iL: US Investment discussions proceeding at a level not exceeding annual $20B, total $200B, as laid out in MOU.
Other Asia
-(IN) India AUG CPI Y/Y: 4.8% V 4.9%E [EU market close].
-(ID) Indonesia July External Debt: $454.8B v $453.4B prior.
-(ID) Indonesia Finance Min shakeup could lower negative ratings risk; cites economists at a large US bank – US financial press.
-(PH) Philippines July Overseas cash remittances: $3.2B v $3.0B prior; Y/Y: +1.9% v +1.7% prior.
-(PH) Philippines sells total PHP6.03B vs. PHP30-50B indicated range in 4-year and 10-year bonds.
-(VN) Vietnam Finance Ministry is considering first USD-denominated sovereign bond sale since 2014 – US financial press.
-(TW) USD/TWD Taiwan’s dollar weakens to 31.836/USD, lowest level since August 26th, 2026.
-(MY) USD/MYR Malaysia’s ringgit weakens to 4.08/USD, lowest level since August 17th, 2026.
-(TH) Cambodia Foreign Minister: Cambodia seeks a treaty to agree a single all-purpose maritime boundary with Thailand.
-(TH) Thailand Central Bank sells THB30B vs. THB30B indicated in 1-year bonds: Avg Yield: 1.02062% v 1.02356% prior, bid-to-cover 1.34x v 1.25x prior.
-(TH) Thailand Central Bank sells THB60B vs. THB60B indicated in 3-month bills; Avg Yield: 0.95754% v 0.94262% prior; bid-to-cover: 1.34x v 1.15x prior.
North America
-(US) TLT US 10-year Treasury yield rises above 5.021% (1st time since mid-2007).
-(US) President Trump: The only control that AI needs is a strong President; There is a sick conspiracy going on against AI and data centers [responding to Anthropic CEO call for throttling frontier models] [US market close].
-(US) Pres. Trump: Claims that ‘AI taking over the world is a hoax’; Wants Google to reconsider datacenter plans for Finland – Truth Social [US market close].
-(US) EPA Administrator Zeldin: US is proposing to rescind all major greenhouse gas emissions standards for all power plants; Proposal will save $370M in direct compliance costs – press conference comments [US market close].
-(US) Senate Aide: US Senators are debating a requirement that would force AI giants to commit to preventing future catastrophes [US market close].
-(US) US Supreme Court declines to allow Trump Administration to implement postal service rules related to restricting mail-in voting; the move by the court comes ahead of the Nov midterm elections – financial press.
-(US) US military has revealed it has ‘weapons in space’ – FT.
-(US) Pres. Trump: Just like I delivered on the Great Big Beautiful Bill, which everyone said was impossible to pass, a… – post on Truth Social
-(US) MSFT Issued a code of conduct that sets limits on its future AI models, following Anthropic CEO’s call to throttle frontier AI development – CNBC [US market close]
-(US) MSFT Follow up: CEO Satya Nadella urged the AI industry to prioritize safety and maintain human control over the technology – Business Insider
-(US) GOOGL Allows all engineers to use Anthropic’s Claude – Business Insider
-(US) TSLA Announced an upcoming $750M rated prime auto lease ABS transaction which is expected to price later this week – financial press [update]
-(CA) Canada AUG CPI M/M: -0.1% V -0.1%E; Y/Y: 3.0% V 3.0%E [US market close]
-(CA) Canada PM Carney: Foreign capital is underallocated to Canada; There’ll be more tax competitiveness measures coming soon; A mutually advantageous deal is possible between the US and Canada; Ready to sit down and negotiate deal [US market close]
-(VE) Venezuela Acting Leader Delcy Rodriguez to plan UN visit, expected to hold high-level meetings – US financial press
-(CO) Colombia congress approves COP634.9T ($205.0B) budget for 2027
Europe
-(UR) President Zelenskiy: Ukraine proposed partners secure agreement with Russia; Ukraine would agree to an energy truce if Russia does; We’re ready to ensure a corresponding halt to our strikes [US market close].
-(EU) ECB’s Stournaras (Greece): Timely ECB steps limits the risks of more painful hikes down the road [EU market close].
-(DE) Germany said to lobby EU on new China policy and possible seek more tariffs [EU market close].
-(FI) Finland Central Bank updates Economic Forecast:
-(LT) NATO military fighters have been deployed to Lithuania due to possible drone sighting in airspace near Vilnius; Confirms shooting down one drone.
-(PL) Poland’s Armed Forces: Military aviation operations have commenced in Polish airspace amid Russian drone attacks on Ukraine – post on X.
-(PL) Poland Central Bank’s Zarzecki: Current level of rate is slightly restrictive.
Middle East
-(IR) Iran’s IRGC claims an oil tanker caught fire and exploded after colliding with mines in the Strait of Hormuz – Iranian press [US market close].
-(IR) Commodity vessels transiting via Strait of Hormuz at four, down from ten during the previous day, remaining below yesterday’s 10-day average [14 commodity vessels] – Shipping Data.
-(SA) Saudi Arabia Civil Defense issues emergency alert for Yanbu [key port area], Jeddah, Taif, Jazan, Abha and Alula – post on X.
-(SA) Saudi-Led Coalition [in Yemen]: 13 civilians injured in Yemen’s Houthis attacks on Saudi cities of Khamis Mushait, Abha and Taif on Monday.
Levels as of 01:20 ET
Nikkei 225 -0.1%; ASX 200 -1.0%; Hang Seng -0.5%; Shanghai Composite -0.2%; Kospi -1.3%.
Equity S&P500 Futures -0.4%; Nasdaq100 -0.5%; DAX -0.1%; FTSE100 -0.3%.
EUR 1.1555-1.1534; JPY 154.91-154.21; AUD 0.7143-0.7117; NZD 0.5785-0.5752.
Gold flat at $4,298/oz; BTC -0.3% at $77,358; WTI Crude Oil +1.9% at $103.33/bbl; Copper flat at $6.3983/lbs.
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