Asia Market Quick Take – 31 August, 2026

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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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