Asia Market Quick Take – 07 September 2026

Key points:

• Macro: August payroll beats, Fed Sept rate hike probability above 50%
• Equities: Stocks fell after strong NFP data, Lululemon down 17.4%. US closed today.
• FX: Yen was steady after last week’s 2.4% gain, its strongest weekly rally since July
• Commodities: Oil posted its biggest weekly gain since July
• Fixed income: Treasuries fell with 2Y & 5Y yields hitting to their highest since Jan. 2025

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Disclaimer: Past performance does not indicate future performance.

Macro:

• US-Iran escalation dominates: The US military struck three Iranian crude oil tankers over the weekend — destroying one (the Suezmax Kylo) in the Gulf of Oman and disabling two near Kharg Island — in retaliation for IRGC ballistic missile attacks on two US Navy warships. Iran subsequently targeted three tankers in the Strait of Hormuz and declared a new restricted zone outside the strait. The US denied Iran's claim of striking an unmanned American vessel. Energy Secretary Chris Wright said the US Navy will continue escorting tankers through Hormuz until Iran stands down.
• US August payrolls beat: Friday's jobs report rose 162k in August (well above the est 55k), with the unemployment rate holding steady at 4.1%. Both June and July figures were also revised upwards by a combined 55k. The data boosted Fed rate hike bets, with money markets pricing over a 50% probability of a September hike. The 2-year Treasury yield rose 8 basis points to 4.416%, its highest since January 2025.
• ECB expected to hike Thursday: The ECB is widely expected to deliver a second consecutive 25bp rate hike at its Thursday meeting, cementing its status as the most hawkish G7 central bank. Debate is already shifting to whether a third hike will follow later in the year.
• BOJ September hike increasingly priced: BOJ Governor Ueda hinted at a rate hike at the Sept. 17–18 meeting, with the BOJ reportedly leaning toward a 25bp increase from 1%. Hawkish board member Takata left the door open for outsized or back-to-back hikes. Nomura flagged a scenario of three consecutive hikes through December if yen weakness persists.
• China capital injection: Beijing is injecting approximately 360 billion yuan (~$53.6bn) into at least eight major state-backed financial institutions, including AgBank (up to 160bn yuan), ICBC (100bn yuan), and PICC (15bn yuan), with the Ministry of Finance subscribing for the bulk of the placements to shore up core tier 1 capital.
• OPEC+ holds output steady: The OPEC+ sub-group led by Saudi Arabia and Russia kept October production quotas unchanged, in line with their roadmap to hold targets flat through year-end. Saudi Arabia will produce 10.5 million barrels per day in October.
• OpenAI GPT-6 announcement: OpenAI's GPT-6 announcement over the weekend has reinvigorated the AI trade, with the Philadelphia Semiconductor Index jumping 3.4% on Friday and Asian tech stocks set to outperform at the open.

Equities: 

• US equities fell on Friday after the stronger-than-expected August payrolls report boosted Fed rate hike bets. The Dow Jones fell 0.5%, the S&P 500 declined 0.4%, and the Nasdaq shed around 0.5%, though tech stocks partially cushioned the broader decline. More than 300 S&P 500 names fell on the day. Tesla dropped ~5.9% after its Cybercab launch disappointed. Lululemon was the session's worst performer, plunging 17.4% while Nike exits the S&P 100. US markets are closed today for Labor Day. Looking ahead, Oracle and Adobe are both set to report Wednesday, with options implying notable moves for both names, each down roughly 20% year-to-date.
• European equities posted their third weekly decline in four last week, with the Stoxx Europe 600 falling 0.8% — its worst weekly drop in nearly two months — as rising bond yields weighed on sentiment. The Euro Stoxx 50 ended the week 1.43% lower at 6,392.93. The DAX fell roughly 2% for the week, though Volkswagen was a standout gainer on Friday, rising 6.5%. The FTSE 100 was little changed on Friday at 10,831, with AstraZeneca and Experian (down 4.4%) among the laggards. ASML rose 3.1% on Friday, leading the Stoxx 600 higher on the day. The benchmark sits roughly 2% below its early-August record high.
• Asian stocks are opening higher this Monday morning, tracking Friday's US tech gains and buoyed by the OpenAI GPT-6 announcement. Japan's Nikkei and South Korea's Kospi are both gaining at the open, with the Kospi expected to lead given a 7% jump in the UBS Memory basket on Friday. The Hang Seng Tech Index jumped 2.5% on Friday (4 Sep), with mainland China indexes also well in the green. Earlier in the week (2 Sep), Asian markets suffered a sharp sell-off — the MSCI Asia Pacific Index fell as much as 2.1%, with the Kospi tumbling ~4% and the Nikkei sliding ~2.9% — driven by rising bond yields and oil prices. By Friday, the MSCI Asia Pacific had recovered 0.8% and was on track for a weekly gain. Japanese trading house stocks gained mid-week after Berkshire Hathaway CEO Greg Abel signalled long-term commitment, with Mitsubishi Corp climbing 4.1%.