APAC stocks traded mixed following modest gains on Wall Street, with focus on the length of the US government shutdown after the Senate rejected the House-passed CR, whilst Chinese participants were away for Golden Week.
The Senate has rejected the House-passed CR (as expected), cementing a shutdown, while House and Senate GOP leaders will hold a 10 a.m. (15:00 BST) news conference Wednesday, according to Politico, citing sources.
BoJ Tankan Survey came in mixed and not strong enough to trigger hawkish repricing. Pricing tilted incrementally dovish as the dust settled, with a BoJ official noting firms were divided on the impact of US tariffs.
The OPEC Secretariat firmly rejected media reports alleging that the OPEC-8 countries are planning to increase production by 500k bpd, calling the claims wholly inaccurate and misleading.
Looking ahead, highlights include EZ & UK Final Manufacturing PMI (Sep), EZ Flash HICP (Sep), US ADP (Sep), ISM Manufacturing (Sep), Atlanta Fed GDP, BoC Minutes, Fed’s Barkin, ECB’s Elderson, de Guindos, Rehn, BoC’s Rogers, supply from UK and Germany.
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US TRADE
EQUITIES
US stocks finished near session highs, finding strength through the afternoon and into month/quarter-end, though the Russell 2000 still closed flat. The late recovery came without a clear headline catalyst.
Sectors ended mixed with a slight positive bias: Energy lagged, weighed by lower oil prices, while Health led gains, supported by Pfizer (+6.5%) following a series of Trump-related announcements. Meanwhile, spot gold reversed earlier losses, extended its climb, and printed a fresh all-time high.
SPX +0.41% at 6,688, NDX +0.28% at 24,680, DJI +0.18% at 46,398, RUT +0.05% at 2,436
Click here for a detailed summary.
US GOVERNMENT SHUTDOWN
The US government officially went into shutdown, with a majority of operations halted after no funding deal was reached in the Senate, marking the first shutdown since 2018.
The Senate has rejected the House-passed CR (as expected), cementing a shutdown, while House and Senate GOP leaders will hold a 10 a.m. (15:00 BST) news conference Wednesday, according to Politico, citing sources.
US President Trump said on government spending that they are going to see what happens, noting he had a good discussion with Schumer and Jeffries. On a potential government shutdown, he said “we’ll probably have one,” adding that Democrats are taking a risk and that during a shutdown, the government can cut benefits and take medical actions that are irreversible, according to Reuters.
US Senate Democrats urged colleagues to resist President Trump’s stance on government funding during a private caucus meeting on Tuesday, according to Axios sources. A US government shutdown looms within hours amid a lack of compromise from lawmakers, with Democratic opposition strengthening, according to Reuters.
The Office of Management and Budget issued official guidance that the government will shut down at about midnight, according to FBN’s Lawrence.
NOTABLE HEADLINES
Fed’s Goolsbee (2025 voter) said the US seems to be headed into a new wave of tariffs, while the labour market remains pretty steady, according to Reuters.
Fed’s Collins (2025 voter) said gradual rate cuts are likely if the economy meets expectations, but warned that aggressive cuts risk fuelling inflation. She noted the economic outlook aligns with Fed forecasts, said supportive financial conditions give space to watch data, and emphasised the Fed must continue managing inflation risks, according to Reuters.
Fed’s Logan (2026 voter) said the Fed will be cautious in any further reductions and that the US may need additional labour market slack to reach the 2% inflation target. She noted resilient consumption and business investment show policy is only modestly restrictive, adding that inflation expectations cannot be taken for granted and that financial conditions are now a tailwind, further evidence that policy is modestly restrictive. Logan said it is unclear how much further the Fed can cut before hitting neutral and warned that even excluding tariff impacts, inflation may be as high as 2.4%, driven by non-housing services, according to Reuters.
TRADE/TARIFFS
US President Trump said Eli Lilly (LLY) has been fantastic, warning that pharma companies will face an extra 5–8% tariff if no deals are made. He said drug pricing will have a huge impact on the mid-term elections and that on Pfizer (PFE), drug price lowering will be immediate, according to Reuters.
US President Trump said Pfizer (PFE) agreed to offer discounts, with the US paying the lowest price, 50–100% off and in some cases more. He added that all US medications will be sold at most favoured nation prices and that Pfizer will offer all of its prescription medications to Medicaid at MFN prices, according to Reuters.
US FDA Chief said that if drugmakers equalise their prices, their applications will go to the front of the line, and if they build in the US, they will also move to the front of the line, according to Reuters.
USTR Greer said President Trump’s pharmaceutical tariff is aimed at ensuring that the most innovative drugs are produced in the US, according to the Economic Club of New York.
US Commerce Secretary Lutnick, on 232 investigations, said that while negotiations are ongoing, they are going to let it play out, according to Reuters.
USTR Greer said the US will always trade with China but needs to find a place where both countries are comfortable, adding that China’s reliance on exports is not sustainable and that trade should become more balanced. He said China’s “wolf warrior” ethos has leaked into US-China economic relations, noted that the average tariff of 55% on Chinese imports is the status quo, and added that the USTR will be fully functioning in the event of a government shutdown. He said US tariff revenues could reach USD 600bln to USD 1tln per year, according to Reuters.
US President Trump said other drugmakers will commit in the coming weeks to sell at most favoured nation prices, which will help bring Medicaid costs down. He added that medicines will be available for direct purchase on a US government website, according to Reuters.
US Deputy Secretary of State encouraged investment from South Korea, with the US and South Korea holding a working group on visas for South Korean businesses investing in the US, according to a statement.
South Korea and the US released a joint statement on a foreign exchange policy agreement, pledging to avoid manipulating exchange rates to gain an unfair competitive advantage. The statement did not mention a bilateral currency swap or South Korea’s state-run pension fund. Both sides agreed that FX market intervention should be reserved for combating excessive volatility and would be considered for both disorderly depreciation and appreciation. They also agreed to exchange FX intervention operations on a monthly basis and said any macroprudential or capital flow measures will not target exchange rates, according to Reuters.
Taiwan rejected a US request to produce half of its chips locally, according to Bloomberg.
Japanese Economy Minister Akazawa said they will operate a USD 550bln US-bound investment without causing FX impact, suggesting USD 550bln is the range where there is no FX impact, according to Reuters.
NOTABLE US EQUITY NEWS
USTR Greer, when asked whether the Trump administration has discussed taking a stake in NVIDIA (NVDA), said US President Trump would love a stake in every company that is doing well, according to Reuters.
Nike Inc (NKE) Q1 2026 (USD): EPS 0.49 (exp. 0.27), Revenue 11.72bln (exp. 11.00bln). Gross margin decreased 320bps to 42.2%, primarily due to lower average selling price, reflecting higher discounts and channel mix, as well as higher tariffs in North America. CFO said tariffs will cost approximately USD 1.5bln, higher than the prior estimate of around USD 1bln, and expects Q2 revenue to fall by low single digits versus estimates of a 3.1% decline, according to Reuters. Shares rose 4.5% after hours.
Fed to ease Morgan Stanley’s (MS) capital requirements following a review, according to Bloomberg.
US Energy Secretary said the US government is taking an equity stake in Lithium Americas (LAC), via Bloomberg TV; US DoE to take a 5% stake in Lithium Americas (LAC), according to Reuters sources.
Berkshire Hathaway (BRK.B) is reportedly in talks to buy Occidental Petroleum’s (OXY) chemical unit for USD 10bln, via WSJ.
BlackRock’s (BLK) GIP is said to be nearing USD 38bln takeover of utility AES (AES), according to FT sources
APAC TRADE
EQUITIES
APAC stocks traded mixed following modest gains on Wall Street, with focus on the length of the US government shutdown after the Senate rejected the House-passed CR, whilst Chinese participants were away for Golden Week.
ASX 200 fluctuated between small gains and losses, supported by gold miners at the top of the index, while Energy and Tech lagged. BHP came under pressure after China banned its iron ore cargoes amid a pricing dispute.
Nikkei 225 underperformed as the regional laggard despite a relatively mixed BoJ Tankan Survey.
KOSPI was modestly firmer after above-forecast trade data, whilst reports suggested the US and South Korea agreed to establish a visa desk for Korean firms investing in the US. The two sides also issued a joint statement on foreign exchange policy, though it did not mention a bilateral currency swap or South Korea’s state-run pension fund.
Nifty 50 traded flat and was little changed as the RBI kept its repo rate unchanged at 5.50% as expected in a unanimous decision, maintaining a neutral policy stance.
Hang Seng and Shanghai Comp were shut for Golden Week and will return next Thursday.
US equity futures (ES -0.5%, NQ -0.5%) traded softer as focus remained on the government shutdown after the Senate rejected the House-passed CR, while this week’s US jobs reports are delayed until the government reopens.
European equity futures are indicative of a mildly firmer open with the EuroStoxx 50 future +0.1% after cash closed +0.4% on Tuesday.
FX
DXY traded flat in a tight 97.80–97.88 range for most of the session as attention stayed on the US government shutdown after the Senate rejected the House-passed CR. Towards the end of the APAC session, DXY weakened to an intraday low of 97.58 despite a lack of headlines, but as European players reacted to the US government shutdown. Focus now turns to its duration, with Jobless Claims and NFP releases likely delayed unless the government reopens before their respective scheduled release days. Elsewhere, traders also await the ADP and ISM Manufacturing PMI data on Wednesday.
EUR/USD was uneventful in a 1.1730–1.1742 range for a bulk of the session before being supported by recent USD softness. Traders now look ahead to the Flash HICP metrics and commentary from ECB speakers on Wednesday.
GBP/USD was little changed after initially finding resistance at 1.3450 overnight, with UK newsflow quiet and the domestic docket light. Late USD weakness prompted upside in GBP/USD, which eventually topped 1.3450.
USD/JPY held in a narrow range on either side of 148.00 for most of the session with a slight upward tilt after the BoJ Tankan Survey came in mixed and not strong enough to trigger a further hawkish repricing. USD/JPY fell to a fresh session low at 147.63 ahead of the European open amid late USD weakness.
Antipodeans were softer throughout, with China closed for a week-long holiday. Additional downside pressure stemmed from a revision lower in the Australian Manufacturing PMI and reports that China banned BHP iron ore cargoes amid a pricing dispute.
FIXED INCOME
10yr UST futures were slightly softer after mixed data left yesterday’s price action choppy before settling flat, with focus now on the length of the US government shutdown as this week’s Jobless Claims and NFP are likely delayed unless the government reopens, while traders also await the ADP and ISM Manufacturing PMI data on Wednesday.
Bund futures traded weaker in tandem with peers, slipping back under the 128.50 handle as traders looked ahead to Flash HICP metrics, a 2035 Bund auction, and commentary from ECB speakers on Wednesday.
10yr JGB futures were mildly firmer after the BoJ Tankan Survey, which was not strong enough to prompt hawkish repricing.
Australia sold AUD 1.2bln 3.50% 2034 bond; b/c 2.1x (prev. 3.73x), average yield 4.29% (prev. 4.09%)
COMMODITIES
Crude futures eked out mild gains for most of the session after a choppy Tuesday amid mixed reporting around OPEC’s upcoming weekend meeting, with the OPEC Secretariat firmly rejecting media claims that the OPEC-8 plan to raise production by 500k bpd, calling them wholly inaccurate and misleading. Little action was seen from the surprise draw in Private Inventories, with the internals more bearish.
Spot gold had an upward bias for most of the session as the US government shut down, with the yellow metal hitting another fresh all-time high at USD 3,875/oz before waning.
Copper futures edged slightly firmer, holding above the USD 10k/t handle despite the absence of Chinese participants during the eight-day Golden Week holiday.
The OPEC Secretariat firmly rejected media reports alleging that the OPEC-8 countries are planning to increase production by 500k bpd, calling the claims wholly inaccurate and misleading. It said discussions among relevant ministers concerning the upcoming meeting have not yet commenced and urged media outlets to exercise accuracy and responsibility to avoid fuelling unnecessary speculation in the oil market, according to OPEC via X.
Private inventory data (bbls): Crude -3.7mln (exp. +1.0mln, prev. -3.8mln), Distillate +3.0mln (exp. -1.1mln, prev. +0.5mln), Gasoline +1.3mln (exp. +0.7mln, prev. +1.1mln), Cushing -0.7mln (prev. +0.072mln)
A fire reportedly broke out at Glencore’s (GLEN LN) Lomas Bayas copper mine in Chile, via local radio.
CRYPTO
Bitcoin was choppy in a narrow range on either side of USD 114k.
NOTABLE ASIA-PAC HEADLINES
A BoJ official, following the Tankan Survey, said firms were divided on how they viewed the impact of US tariffs. Some suggested the US-Japan deal has reduced uncertainty and improved the business outlook, while others saw a worsening outlook, according to Reuters.
RBI kept its repo rate unchanged at 5.50%, as expected, in a unanimous decision, maintaining a neutral policy stance, with 2026 CPI now seen at 2.6% (prev. 3.1%). RBI Governor noted the Indian economy shows strength and headline inflation has significantly moderated. He said rationalisation of GST will have a sobering impact on inflation while stimulating consumption and growth, and added that tariffs will moderate exports. He highlighted the global economy is proving more resilient than anticipated but the outlook remains clouded amid elevated policy uncertainty, according to Reuters.
DATA RECAP
Japanese Tankan All Big Capex Est (Q3) 12.5% vs. Exp. 11.3% (Prev. 11.5%)
Japanese Tankan Big Mf Idx (Q3) 14.0 vs. Exp. 15.0 (Prev. 13.0)
Japanese Tankan big non-mf outlook DI (Q3) 28.0 vs. Exp. 29.0 (Prev. 27.0)
Japanese Tankan Big Mf Outlook DI (Q3) 12.0 vs. Exp. 13.0 (Prev. 12.0)
Japanese Tankan Big Non-Mf Idx (Q3) 34.0 vs. Exp. 34.0 (Prev. 34.0)
Japanese Tankan Sm Non-Mf Outlook DI (Q3) 10.0 vs. Exp. 9.0 (Prev. 9.0)
Japanese Tankan All Sm Capex Est (Q3) -2.3% vs. Exp. -2.2% (Prev. -5.6%)
Japanese Tankan Sm Mf Outlook DI (Q3) -1.0 vs. Exp. -1.0 (Prev. -2.0)
Japanese Tankan Small Mf Idx (Q3) 1.0 vs. Exp. 2.0 (Prev. 1.0)
Japanese Tankan Small Non-Mf Idx (Q3) 14.0 vs. Exp. 14.0 (Prev. 15.0)
Japanese S&P Global Manufacturing PMI Final SA (Sep) 48.5 (Prev. 48.4)
South Korean Import Growth Prelim (Sep) 8.2% vs. Exp. 5.6% (Prev. -4.1%)
South Korean Export Growth Prelim (Sep) 12.7% vs. Exp. 7.2% (Prev. 1.2%)
South Korean Trade Balance Prelim (Sep) 9.56B vs. Exp. 7.81B
New Zealand Building Consents (Aug) 5.8% (Prev. 5.4%, Rev. 5.3%)
Australian S&P Global Manufacturing PMI Final (Sep) 51.4 (Prev. 51.6)
Australian AIG Manufacturing Index (Sep) -13.2 (Prev. -20.9)
Australian AIG Construction Index (Sep) 12.3 (Prev. 1.0)
GEOPOLITICS
MIDDLE EAST
A diplomatic source told i24NEWS that the plan presented by President Trump is without negotiations and that “the answer should be yes or no,” while the US administration is signalling it may be ready for some kind of minimal but not lengthy negotiations. On the other hand, Qatar and Hamas said the plan is in fact an opening, via Jerusalem Post’s Stein.
Yemen’s Houthis said they attacked the Dutch-flagged ship Minervagracht with a cruise missile, according to Reuters.
RUSSIA-UKRAINE
Ukrainian President Zelensky warned the situation at the Zaporizhzhia nuclear power plant is critical, noting that Russian shelling is obstructing efforts to restore external power supply and that one backup diesel generator has stopped working, according to Reuters.
The IAEA said it is engaging with both sides of the military conflict to restore off-site power at Ukraine’s Zaporizhzhia nuclear power plant, according to Reuters.
EU/UK
NOTABLE HEADLINES
UK Chancellor Reeves said she cannot set out policies without explaining where the money will come from, adding that child poverty will be reduced in this Parliament and details will be laid out in the budget, according to Reuters.
UK Chancellor Reeves will lift the two-child benefit cap in the November budget, according to The Guardian.
BoE’s Breeden said the recent “hump” in inflation is unlikely to lead to additional inflationary pressure, noting that while the underlying disinflationary process looks on track, policymakers face a balancing act in managing the risks around the outlook. She said inflation this month is expected to peak at 4%, well above target, stressing it is too high and the BoE’s job is to return it sustainably. She added the hump reflects external shocks and is unlikely to create further pressures, and said she has not yet seen evidence that the underlying disinflationary process is veering off track. Breeden cautioned that the path ahead is uncertain, with risks on both sides, and stressed focus will be on indicators of wage and services price inflation, along with pricing intentions from surveys and BoE agents, as key signposts for when it might be appropriate to remove further restrictiveness, according to the BoE.
LATAM
Brazil Treasury official Leal said they will roll over debt of just over 100% this year, adding that while the maximum target for debt is BRL 8.8tln, this does not mean the Treasury is seeking or will reach it. He said a comfortable range has been set as the goal, noted that in recent weeks issuance has proceeded at a more moderate pace than at the start of the year, and emphasised they will be more cautious to respect any market restrictions. He added that if conditions arise, the Treasury would have no problem accessing the international market again this year, according to Reuters.
Colombia’s central bank held interest rates steady at 9.25%, in line with expectations, with the decision backed by a majority of board members, while Central Bank Chief Leonardo Villar announced the cancellation of the IMF flexible credit line, according to Reuters.
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