Asia Market Quick Take – 16 October, 2026

Asia Market Quick Take – 16 October, 2026 

Key points:  

• Macro: US PPI and retails sales hotter than expected 
• Equities: SP500 snaps 3 day losing streak; TSMC lower post earnings. 
• FX: USD slumped on bond rally; AUD weakened, Asia FX underperformed 
• Commodities: Precious metals recover while oil remains elevated 
• Fixed income: US Treasuries rally; curve bull flattens 

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Disclaimer: Past performance does not indicate future performance.  

 Macro: 

• US producer prices jumped 1.3% month-on-month in September 2026, the biggest rise since March 2022 and well above the 0.5% forecast, driven by a 10.8% surge in energy and higher transport, trade, and food costs. Core PPI rose 0.7%, while annual PPI climbed 6.3%, the highest since December 2022.
• US retail sales rose 0.8% month-on-month in September 2026, after a revised 1.3% gain in August and above the 0.3% forecast, largely driven by a 6.4% jump at gasoline stations on higher prices. Excluding gas, sales were up 0.2%. Control-group sales used for GDP rose 0.1%, after 1.2% in August.
• Stronger Canadian manufacturing data boosted bets on a Bank of Canada rate hike. Manufacturing sales rose 1.5% in August 2026 to C$79.9 billion, beating the 1.1% forecast, but the economy showed signs of cooling as employment fell by 68,300 versus expectations for a 7,000 gain, amid ongoing US–Canada trade uncertainty.
• US jobless claims rose by 1,000 to 199,000 in the week ending October 10, 2026, just below the 200,000 forecast. Continuing claims fell by 4,000 to 1,710,000, near recent lows, underscoring a still-strong labor market. Federal employee initial claims rose by 68 to 463.
• The Philadelphia Fed Manufacturing Index fell to 20.9 in October 2026 from 37.8, below expectations and the weakest growth since June. New orders, shipments, and employment all slowed but stayed positive, while prices paid and received continued to indicate rising prices. Firms remained optimistic, though most future indicators softened.

Equities:  

• US: S&P 500 snapped a three-day losing streak on Thursday, closing up 0.3% at 7,744. The Dow Jones Industrial Average outperformed, rising 1.1%, while the Nasdaq 100 pared a steep intraday loss of 1.8% to close roughly flat. The session was characterised by a rotation out of AI and chip names — Nvidia fell ~2%, Tesla -1.6% — into healthcare, financials and materials. Coreweave rebounded after 9.5% drop to close 5% higher after Jensen Huang says financial health is improving. BNY Mellon (+3.2%) and Marsh McLennan (+4.6%) were notable gainers on earnings beats. TSMC closed 1.8% lower despite Q3 results coming in better than expected with net profit growing 68.7% yoy and operating margin 58.7%, above estimates.
• EU: European equities showed resilience on Thursday despite the global chip rout. The Stoxx 600 rose 0.4% to 640.16, led by healthcare; AstraZeneca gained 3.2% and Barry Callebaut surged 7.7%. The FTSE 100 climbed 1.1% to 10,840, boosted by banks after UK Chancellor comments suggested the sector may avoid a windfall tax. The CAC 40 rose 0.8% to 7,934.70, and the DAX gained 0.3% to 25,382. The Euro Stoxx 50 underperformed, falling 0.4% to 6,168. European chip stocks were hit hard — ASML fell 5.7%, ASM International -8.6%, and Infineon -8.0% — as Anthropic's results added to AI slowdown fears. Ericsson surged ~11% after beating sales and profit estimates.
• Asia: Asian equities are broadly recovering this morning, tracking Thursday's Wall Street rebound. The MSCI Asia Pacific Index is up ~0.6%, led by South Korea. The Kospi is up 1.6% to 5,644 as chip stocks Samsung Electronics and SK Hynix edge higher after Thursday's brutal session, when the Kospi had plunged as much as 6.5% on AI spending fears. The Nikkei 225 closed Thursday's session at 64,426, with the Topix up ~1.5% this morning. The Hang Seng closed Thursday at 24,063, with China's Shanghai Composite falling 1.6% and the ChiNext dropping 2.9% on Thursday amid the tech selloff. The STI fell 0.4% to 5,403.50 on Thursday as the chip rout weighed on Singapore. Taiwan's Taiex dropped 3.4% on Thursday — its sixth-largest one-day point decline — dragged by TSMC, whose ADRs slipped 1.8% despite a better-than-expected Q4 revenue outlook of up to $54.3bn. Australia's ASX 200 is up ~1% this morning at 8,805.

FX: 

• USD had its weakest day in over a month on Thursday, with the Bloomberg Dollar Spot Index down 0.3% as AI-related worries sparked a bond rally and drove 10‑year Treasury yields to 5.05%.
• NOK edged out the CHF to register the best performance among 14 major currencies, gaining 0.41% against the USD.
• AUDUSD fell as much as 1.1% intraday to 0.6894 — its lowest since July 2 — before settling at 0.6921. The selloff was driven by weaker-than-expected Australian jobs data, which prompted traders to trim RBA rate hike expectations, compounded by the broader tech stock rout. 
• USDJPY edged down to 158.00, though the yen was actually the worst performer among 14 major currencies as of the Asian session, before recovering ground later in the day.
• USDCNH edged up as the dollar fell broadly. The PBOC set Thursday's fixing at 6.7253 per dollar, slightly weaker than Wednesday's 6.7249.
• Emerging Markets Taiwan dollar & South Korean won: Underperformed sharply as the semiconductor stock selloff spilled into Asian FX markets — TWD fell as much as 0.8%, KRW as much as 1%.

Commodities: 

• Spot gold is trading at $4,154/oz, down ~0.4% on the day, consolidating after slumping on Wednesday when the hot September CPI print reignited Fed rate hike bets. The precious metal remains sensitive to the trajectory of real yields, which fell ~10bps on Thursday as the AI-driven equity selloff sparked a flight to Treasuries.
• Oil was set for a second weekly advance as Middle East supply risks outweighed a fresh release of emergency reserves; Brent near $106 (up ~1% w/w) and WTI around $97, amid heightened uncertainty over Persian Gulf flows after US Central Command said the sunk ship was hit by an Iranian projectile.
• LME 3-month copper is at $14,347/ton, flat on the day, after falling for a third consecutive session on Wednesday as the hot US inflation print spurred bets on more aggressive Fed tightening. Europe's top copper producer Aurubis has flagged tight market conditions, reportedly offering a record premium of $347/ton for 2027 supply contracts.

Fixed income:

• Treasuries staged a significant rally as the AI-driven equity selloff triggered a flight-to-quality bid. The 10-year yield fell as much as 15bps intraday to a three-week low of ~5.04%, while the 30-year fell ~13bps. The move was amplified by a large block trade in Ultra-long bond futures ($720k/DV01) and CTA short-covering flows. Yields settled: 2-year at 4.77%, 10-year at 5.09%, and 30-year at 5.42%.
• Investors liquidated two Treasury option bets targeting higher yields at a combined loss of nearly $18 million. The trades — initiated on Tuesday as CPI hedges — were unwound as Treasuries surged immediately after the equity selloff deepened, underscoring the speed of the rates reversal.
• The rally extended to European government bonds, with the 10-year Bund yield hitting an intraday low of 3.35%, its lowest in more than five weeks, as risk aversion outweighed the prior day's inflation shock. Falling oil prices also supported the move lower in yields across the eurozone.

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