Quick Take Asia

Asia Market Quick Take – 31 August, 2026

Macro 6 minutes to read

Key points:

  • Macro: US strikes Iranian rocket launchers
  • Equities: Nvidia fell 4.6% after hawkish Warsh while Amazon outperforms with +3.4%
  • FX: Hawkish Warsh drove USD gains on Friday; NOK outperforms, SEK lags.
  • Commodities: 2y Treasury yield +12 bps to 4.35%, second-biggest one-day rise this year
  • Fixed income: Gold falls 2% (biggest since July); Brent rallies near $90

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 Screenshot 2026-08-31 101825

Disclaimer: Past performance does not indicate future performance.

  

Macro:

  • The US struck Iranian the rocket launchers which were preparing to mine the Strait of Hormuz, its first such attack in over a month, while increasing sanctions pressure. An Iranian official said renewed talks with Washington “aren’t impossible,” and 6–8 million barrels of crude still pass through the strait daily.
  • Japan’s industrial production rose 0.1% month-on-month in July 2026, beating expectations for a 0.6% decline and marking a fourth straight increase. Output was driven by machinery, chemicals, and electronic parts, partly offset by weaker transport equipment, metals, and plastics. Year-on-year, production grew 4.1%, down from 4.9% in June.
  • Fed Chair Kevin Warsh said underlying inflation is not slowing and reaffirmed the PCE index as the main target. The Fed held rates at 3.50%–3.75% for a fifth meeting in July 2026, with three members favoring a hike. Warsh also played down the policy rate as the key inflation tool, preferring balance sheet reduction and criticizing forward guidance.
  • Japan’s industrial production rose 0.1% month-on-month in July 2026, beating expectations for a 0.6% drop and marking a fourth straight gain. Year-on-year, output grew 4.1%, down from 4.9% in June.
  • Canada’s GDP grew at its fastest pace in nearly two years on a rebound in auto production, helping offset trade risks, but Trump’s threat to lift auto tariffs to 50% from January 1, 2027, remains a major headwind.
  • US year-ahead inflation expectations (University of Michigan) were revised down to 4% in August 2026, the third monthly decline and lowest since March, while five-year expectations stayed at 3.3% for a third month.
  • BLS revisions showed the US added 79,000 fewer jobs in the 12 months through March 2026 (−0.1%). The biggest downward changes were in retail, private education and health, and wholesale trade, partly offset by gains in transportation and warehousing, government, information, finance, and construction.
  • Germany’s unemployment rate stayed at 6.4% in August 2026, the highest since 2020. Seasonally adjusted joblessness rose by 4,000 to 2.996 million, while the unadjusted total remained above 3 million at 3.061 million amid a sluggish economy.

Equities: 

  • US — On Friday 28 August, the S&P 500 fell 0.3% to 7,711.76, the Nasdaq Composite dropped 0.5% to 26,402.42, and the Dow slipped less than 0.1% to 53,559.99, as Warsh's hawkish Jackson Hole remarks triggered a tech-led selloff. Nvidia fell 4.6% and PayPal tumbled 12.7% — the largest single-stock decline in the S&P 500 after Stripe and Advent International abandoned their $53b bid. Marvell also retreated after results failed to clear a high bar. Amazon (+3.4%), Microsoft (+2.4%) and Apple (+1.6%) outperformed. S&P 500 futures are down a further 0.5% and Nasdaq 100 futures down around 0.5% at the Asia open this morning.
  • EU — European equities closed higher on Friday 28 August, with the Stoxx Europe 600 rising 0.5% to 655.16, the DAX gaining 0.8% to a record close of 26,569.99, the FTSE 100 up 0.3% to 10,824.26, and the CAC 40 rebounding 1% after its worst session of the prior day. Auto stocks led gains: BMW surged 4.5% and Forvia rose more than 4% after both were added to Citi's positive catalyst watch list. BioNTech tumbled after scrapping a cancer vaccine trial. The Stoxx 600 was on pace for a fifth consecutive monthly gain.
  • Asia — Asian equities are sharply lower this morning, weighed down by Warsh's hawkish tone and surging oil prices following the US–Iran military exchange. The MSCI Asia Pacific index fell 1% to 275.30. Japan's Nikkei dropped 2.3% to 64,860.54, with technology and semiconductor names leading declines. South Korea's Kospi fell over 3% at the open to around 6,582, with Samsung Electronics and SK Hynix both weaker in pre-market trading — the Kospi is seen as a key barometer for AI investment sentiment. China brokerages posted record first-half profits on a trading boom, with combined net profit up over 40% year-on-year among listed securities firms. BYD reported that overseas revenue exceeded domestic revenue for the first time in 1H 2026, with international sales rising 34% to 181.3 billion yuan. No specific STI or Hang Seng index levels were available at time of writing.

Earnings this week:

  • Tuesday: Nio, Sino Land, Palo Alto Networks, Medtronic
  • Wednesday: Broadcom, Snowflake
  • Thursday: Ciena

FX:

  • Fed Chair Warsh’s hawkish Friday remarks—signalling a possible September hike and a firm commitment to returning inflation to 2%. Today's modest USD pullback follows that Friday surge — the Bloomberg Dollar Spot Index rose 0.4% on Friday and was up 0.6% on the week.
  • USDJPY is holding above 160 after breaking its 100-day moving average, leaving the July 31 high near 160.88 as the next technical target despite an estimated $98.7bn of joint Japan–US intervention that only briefly supported the yen.
  • AUDUSD is slightly softer after Friday’s 0.4% drop, with the pair extending losses this morning and several major houses (SB1 Markets, Banco Santander, Danske Bank) warning the twomonth rally is peaking and projecting a move back toward 0.70 by year-end, even though AUD remains ~7.4% higher vs. USD year-to-date.
  • NZDUSD is marginally firmer on expectations of a 25bp RBNZ hike to 2.75% this week.
  • In the broader G10 space NOK is the top YTD performer (+7.6% vs. USD), SEK the worst (-4.2%).

Commodities:

  • Brent crude is trading just below $90 per barrel and WTI near $85, after the US military struck Iranian rocket launchers reportedly preparing to mine the Strait of Hormuz on Sunday. This marks a fresh escalation after weeks of relative calm and adds significant supply risk premium to energy markets.
  • Gold fell as much as 2%—its biggest drop since July—after Fed Chair Kevin Warsh vowed to return inflation to the 2% target, boosting the dollar and bets on a rate hike this year. Silver also reversed sharply after hitting fresh high $71.17

Fixed income:

  • The 2-year Treasury yield rose 12 basis points on Friday to 4.35% — the second-largest single-day increase this year and the most hawkish single-day yield move at Jackson Hole in at least 20 years. The move reflects sharply repriced Fed hike expectations, with swaps now pricing more than a 50% probability of a hike at the September 16 meeting and two hikes priced by March 2027.
  • The Treasury curve flattened dramatically on Friday, with the 2s10s and 5s30s spreads each tightening by approximately 7 basis points and the 2s30s by around 10 basis points. The 30-year yield ended only marginally higher as longer-end bonds were partially supported by Bessent's buyback programme.
  • Japanese government bonds are expected to fall at the open, tracking US Treasuries. Japan is scheduled to sell 10-year bonds on 1 September and 30-year securities on 3 September. Poor demand at these auctions could ricochet into global bond markets, adding further upward pressure on yields at a sensitive time.

 

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