Asia Market Quick Take – 26 February, 2026

Asia Market Quick Take – 26 February, 2026

Key points:

• Macro: BoJ Ueda hints at potential rate hikes
• Equities: Nasdaq gained 1.4% on software stocks recovery;Nvidia flat after earnings
• FX: Yuan nears strongest close in nearly three years as onshore and offshore gained
• Commodities: Copper extended gains to a three-week high, rising 1.4% to $13,350 a ton
• Fixed income: Treasuries fell with soft demand at 5-year note auction

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Disclaimer: Past performance does not indicate future performance.

Macro: 

• BoJ Governor Ueda hinted at a potential rate hike, keeping the March and April meetings open for action. Rate increases depend on hitting a 2% inflation target by late fiscal 2026, with the timeline potentially moved up by strong wage gains. Decisions will follow data analysis by March and April, amid speculation of an April hike.
• US 30-year fixed mortgage rate fell to 6.09%, the lowest since September 2022, according to the Mortgage Bankers Association. Applications grew 0.4%, with refinancing up 4.1% but purchases down 4.7%. Lower rates help affordability, but home prices are higher than last year amid economic uncertainty.
• Hong Kong's inflation rate fell to 1.1% from 1.4% in December. Price growth slowed in housing, food, and transport, with deeper deflation in durable goods and clothing. Utilities prices rebounded, while inflation increased for services and goods. Consumer prices rose 0.2% monthly, with underlying inflation at 1%, down from 1.2%.
• Sentiment in Hong Kong improved as the 2026/27 budget projected an earlier-than-expected surplus. Financial Secretary Paul Chan announced measures to enhance the city's financial role and innovation. Q4 GDP growth hit 3.8%, the fastest in two years, with annual growth rising to 3.5% from 2.6% in 2024.
• Germany's economy grew 0.3% in Q4 2025, rebounding from previous stagnation due to easing inflation and lower borrowing costs. Household consumption rose by 0.5%, government spending by 1.1%, and construction investment by 1.6%. Inventory and external demand slightly trimmed growth. Annually, Q4 growth was 0.4%, with full-year GDP up 0.2% after a 0.5% decline in 2024.

Equities:

• US - US equities extended gains Wednesday, with the S&P 500 up 0.9%, the Nasdaq climbing 1.4%, and the Dow adding 0.7%. Oracle gained 1.2% on an upgrade, and Microsoft and Palantir jumped 3% and 4.2%. Optimism grew as Anthropic’s new integrations reinforced AI as complementary to, rather than disruptive of, legacy software. Snowflake gained 5% after forecasting product revenue this year to be above initial estimates while Circle rallied 35% after reporting earnings that topped estimates on stablecoin demand. In after hours, Nvidia stayed flat despite beating both earnings and revenue estimates,growing data center business by 75%. Salesforce fell 4.3% after giving a disappointing sales outlook;
• EU - The Euro STOXX 50 gained 0.9% to a record 6,172, while the STOXX 600 added 0.7% to a fresh high of 633. Attention turned to Nvidia’s upcoming earnings, with AI‑linked names such as ASML up 2%. HSBC jumped 7.6% after strong 2025 results. Autos advanced over 1% after the U.S. confirmed a lower‑than‑feared 10% tariff on European imports, though SAP, Adyen and major banks lagged. German confidence weakened, while France improved.
•  Hang Seng Index rose 0.7% to 26,766 on Wednesday, rebounding from Tuesday. Sentiment improved after Hong Kong’s 2026/27 budget projected an earlier‑than‑expected return to surplus and outlined measures to strengthen the city’s financial hub status and support innovation. Q4 GDP growth was confirmed at 3.8%, lifting full‑year expansion to 3.5%. Mainland market gains added momentum, helped by U.S. plans for a global metals trading zone that boosted rare‑earth and metal shares. Haidilao surged 6%, with KE Holdings, Orient Overseas, China Hongqiao and Meituan also advancing.

Earnings this week:

• Thursday: Baidu, Intuit, Block
•  Friday: None

FX:

• A dollar gauge fell on trade uncertainty, with the Australian dollar leading G10 peers after stronger‑than‑expected January inflation driven largely by housing, lifting AUDUSD by 0.9% to 0.7123 and bringing it close to the three‑year high touched earlier this month, while AUD against JPY rose 1.3% to 111.399, the highest since 1990. 
• The yen lagged after Prime Minister Sanae Takaichi’s government nominated two dovish Bank of Japan policy board members, pushing USD against JPY up 0.4% to 156.41; money markets now price about 43 basis points of tightening by year‑end versus 58 on Tuesday, with USD against JPY holding above its 55‑day moving average, resistance at the 9 February high of 157.76 and a break opening a path toward the 23 January high at 159.23; EURUSD advanced 0.3% to 1.1806 and GBPUSD gained 0.5% to 1.3550.
• The Chinese yuan extended gains onshore and offshore, heading for its strongest close in almost three years as the US dollar retreated and the People’s Bank of China strengthened its daily reference rate. USDCNH fell 0.36% to 6.8548, down for a fourth day and set for the lowest close since March 2023, while one‑month implied volatility rose to 3.15% for the first time this week; USDHKD declined to 7.82, its first drop in five days. Hong Kong began to move away from austerity, with the financial secretary pledging billions in technology spending and tax relief for more than two million people.

Commodities:

• Oil steadied ahead of US–Iran nuclear talks, as fears of wider Middle East conflict spurred some of the region’s biggest producers to raise exports, with WTI near $66 a barrel after a slight dip and Brent below $71. A US delegation including special envoy Steve Witkoff is due to meet Iranian Foreign Minister Abbas Araghchi in Geneva on Thursday amid a US military buildup in the region.
• Gold steadied as traders weighed Middle East tensions and US tariffs on global trade, with bullion near $5,170 an ounce in early trading after a 0.4% rise, as the US sanctioned more than 30 entities supporting Iranian oil and weapons sales ahead of Thursday’s nuclear talks in Geneva.
• Copper rose to a three‑week high, up as much as 1.4% to $13,350 a ton after a 2.3% gain, buoyed by prospects of lower US import tariffs improving China’s export outlook, even as a sharp jump in inventories — with Shanghai Futures Exchange warehouse stocks surging by 80,409 tons on Tuesday — signalled high prices have dampened physical buying.

Fixed income:

• US Treasuries ended with small losses after downside pressure for most of the US session, including block sales in classic and Ultra Bond futures, with intermediates hit by a 5-year auction that tailed by 0.7bp, while investors piled into Australian bonds amid the AI scare trade, with Morningstar-tracked inflows topping A$4 billion last year and the 10-year benchmark at 4.72%, the highest among developed markets.

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