Asia Market Quick Take – 21 August, 2026

Key points:

• Macro: US-Iran in stalemate with talks frozen by Trump
• Equities: Dow fell 1.32% as Walmart plunge 9% after sales miss
• FX: Dollar stabilizes after buyback shock; yen weakens, options stay dollar-bearish
• Commodities: Brent crude rose up to 3.4% to nearly $95, a near four-week high
• Fixed income: 30Y US Treasury yield up to 5.25%, reversing buyback‑rally declines

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Iranian adviser Rezaei said the best response to Trump’s economic pressure would be for Tehran to quit the Nuclear Non-Proliferation Treaty. Trump reportedly told his team a deal with Iran is unlikely and ordered talks frozen for several weeks. Houthis are preparing a new phase of escalation against Saudi Arabia.
• Japan’s annual inflation rose to 1.9% in July 2026 from 1.6% in June, the highest since December 2025, driven by smaller declines in electricity prices after subsidy cuts and higher costs for food and other services. Core inflation increased to 1.8%, its highest since March, but remained below the Bank of Japan’s 2% target for the sixth straight month.
• Canada’s Industrial Product Price Index rose 0.6% month-over-month in July 2026, rebounding from a 1.4% drop in June and defying expectations for a decline. The increase was driven by a 6.4% jump in energy and petroleum products, led by diesel and gasoline, while lower prices for non-ferrous metals and chemicals, including fertilizers and pesticides, partly offset the gain.
• US initial jobless claims fell by 6,000 to 206,000 in the second week of August, below expectations and near July’s multi-decade lows, signaling a still-resilient labor market. Continuing claims rose to 1.799 million, while federal employee claims inched up to 449.
• Australia’s consumer inflation expectations rose to 4.9% in August 2026 from 4.7% in July, signaling persistent price pressures. Trimmed mean CPI increased 3.6% year-on-year in June, the fastest since September 2024, while RBA officials warned inflation remains too high even as tight policy works to cool demand.
• Germany’s producer prices rose 3.0% year-on-year in July 2026, up from 1.8% and above forecasts, the fastest increase since April 2023. Gains were led by intermediate goods and energy, while non-durable consumer goods fell 2.3%. Excluding energy, prices climbed 2.7%. Month-on-month, producer prices increased 1.1% after a 0.3% decline.

Equities: 

• US — S&P 500 fell 0.9% on Thursday to 7,641.16, its worst session since July 29, as rising oil prices and bond yields weighed on sentiment. The Nasdaq 100 dropped 0.7%, marking its fifth consecutive day of losses. Walmart sank the most since 2022 after reporting its slowest US comparable sales growth in six years and issuing below-consensus guidance. Moderna plunged 23.6%, the largest single-stock decline in the index. Apple fell 1.8%, contributing the most to index losses. Anthropic prepares to file for IPO as soon as end August, expecting to match the size of SpaceX’s IPO. After hours, Ross Stores surged 6.8% after boosting its full-year EPS forecast on strong traffic.
• EU — The Stoxx 600 fell 0.1% on Thursday, extending its losing streak to seven sessions — the longest since September 2023. The DAX dropped 0.4% to 25,983, its lowest close since July 31. The FTSE 100 was little changed at 10,748. LVMH was the largest drag on the Stoxx 600, falling 2.8%. JD Sports Fashion had the sharpest single-stock decline, dropping 14.3%. SSAB fell 8.7% on the prospect of lower tariffs on Canadian steel and aluminium exports. On the upside, Sandvik rose 2.9% and Epiroc gained 3.4% on the Stockholm exchange.
• Asia —Kospi opened Friday down 1.4% to 6,759.95, with Samsung's announcement of up to $79 billion in shareholder returns failing to lift the index amid broader AI-rotation concerns. Alibaba weighed on Hong Kong sentiment after quarterly profit dived 75% on $10 billion in AI spending despite revenue growing 9% and cloud revenue growing 45%. BABA, its US ADR fell 5% at the open but ended the session +1%. NetEase fell 5.6% in US trading on Thursday after missing adjusted EPS estimates. The Hang Seng index compiler is expected to announce its quarterly rebalance on Friday, with Hua Hong Semiconductor, Kingboard Laminates and Zijin Gold among potential additions. The Nikkei is set to open lower, tracking US futures, while the STI faces pressure from the broader regional risk-off tone. Samsung to unveil up to 110trn won shareholder return plan after a 4 p.m. board meeting; details to follow, source says.

Earnings this week:

• Friday - BJ’s Wholesale Club

FX:

• USD partially reversed Wednesday’s buyback-driven selloff on Thursday, with the Bloomberg Dollar Spot Index up about 0.1% after a 0.8% drop.
• JPY was the notable underperformer among G10, weakening past 159 against USD. The dollar's partial recovery weighed on the yen after its prior-session gains.
• GBP and EUR held onto most of Wednesday's gains, with options markets showing dollar-bearish positioning — roughly two out of every three options traded since the Treasury announcement were dollar-negative, with EUR and GBP as the primary beneficiaries.
• The yuan edged up to its strongest level since early 2023, even as the PBOC set a weaker-than-expected daily fixing at 6.7808. USDCNH touched its lowest since February 2023.

Commodities:

• Brent crude surged as much as 3.4% to nearly $95 a barrel, the highest in almost four weeks, after President Trump threatened Iran with "economic warfare." Oil settled near $88 as gains partially pared. Brent has broken above its 100-day moving average, with options markets setting up a potential test of $100, as traders price in a prolonged Hormuz disruption and tightening product markets.
• Gold held above $4,500 an ounce, following its biggest single-day gain in six months on Wednesday when the Treasury buyback announcement sent yields lower. The GLD ETF recorded its largest single-day inflow since January 16, adding $1.35 billion.

  Fixed income:

• The 30-year US Treasury yield rose over 7 basis points on Thursday to as high as 5.27%, fully reversing the gains from Wednesday's buyback-driven rally and returning to near its 19-year high of 5.31% reached earlier this week. The 10-year yield rose 4.4 basis points to 4.692%, while the 1-year yield edged up 1.2 basis points to 3.984%.
• Treasury Secretary Bessent's doubling of buyback operations for long-dated bonds provided only a temporary reprieve. Markets are increasingly viewing the intervention as a short-term fix that does not address the structural drivers of elevated term premium — including large fiscal deficits, above-target inflation, AI-capex-driven corporate bond supply, and the ongoing Iran conflict.
• Japanese government bond yields declined on Thursday, tracking the initial Treasury rally, with 20- and 30-year JGB yields falling at least 8 basis points ahead of a 20-year JGB auction.

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