Asia Market Quick Take – 11 September 2026

 Key points:

• Macro: Houthis seized strategic seaport. ECB raises rates and US PPI rises
• Equities: Oracle rallies 4% after-hours on Q1 beat
• FX: Dollar strengthens on PPI, oil surge; G10, EM FX broadly weaker
• Commodities: WTI spikes to break above $100
• Fixed income: 2Y +15bp to 4.582% (highest since 2024); biggest selloff since Apr 2025

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Iranian media reported that the Houthis are nearing full control of the strategic waterway, including Zaqar and Mayun islands, the Al-Omari military base, and Al Mukha city.
• Japan’s large manufacturers’ BSI rose to 7.6% in Q3 2026 from -1.8% in Q2, far above the 2.5% forecast and the fastest gain since Q4 2021. Sentiment is expected to ease but stay positive at 5.8% in Q4 and 4.9% in Q1 2027. The BoJ lifted GDP forecasts to 0.6% for FY2026 and 0.8% for FY2027, and raised its FY2027 inflation forecast to 2.4%, warning inflation may exceed its 2% target.
• Japan’s producer prices rose 7.6% y/y in August 2026, just below July’s revised 7.7% but above the 7.4% forecast, reflecting continued commodity and energy cost pressures and broad-based gains across sectors. Month-on-month, PPI fell 0.2%, the first decline in a year, after a 0.4% rise in July.
• US producer prices rose 0.4% m/m in August 2026, the largest increase in three months, driven by a 1.1% jump in goods prices, including a 24.1% surge in diesel and higher gasoline and jet fuel prices, partly offset by a 0.5% drop in residential electric power. Services edged up 0.1%. Annual PPI accelerated to 5.4% from 4.8% (vs 5.3% expected). Core PPI increased 0.2% m/m and 4.6% y/y.
• The ECB raised rates by 25 bps in September, lifting the main refinancing rate to 2.65% and the deposit rate to 2.5%, citing persistent inflation from Middle East tensions. It kept its 2026 inflation forecast at 3.0% but raised 2027 and 2028 to 2.5% and 2.1%, while upgrading growth to 0.9% for 2026 and 1.4% for 2027 (2028 unchanged at 1.5%). Lagarde said growth risks are tilted down and inflation risks up, with policy set meeting by meeting.
• US initial jobless claims fell by 1,000 to 206,000 in early September 2026, near historic lows and close to the 205,000 forecast. Continuing claims edged down to 1,774,000, below expectations, signaling a still-tight labor market despite recent payroll declines. Federal employee claims rose by 51 to 388 amid plans to shrink the public sector.

Equities:

• US: S&P 500 fell 0.6% to 7,591.70 on Thursday, its fourth consecutive session of losses and the lowest close since 31 July. Nasdaq 100 dropped 1.1% and the Dow Jones shed 316 points (-0.6%) to 52,064. Micron (-4.9%) and Cooper Cos (-14.7%), after cutting full-year guidance) led declines. Apple rose +3.2% on positive analyst sentiment. Materials was the worst sector, with copper stocks hit hard (Freeport McMoRan -8.0%, Southern Copper -7.0%) on a report that the White House has yet to decide on refined copper tariffs. In after-hours trading, Oracle surged 4% after reporting Q1 adjusted EPS of $1.92 (vs. $1.75 est.) and cloud infrastructure revenue of $7.4 billion (+121% y/y), beating estimates. Adobe beats Q3 revenue and earnings estimates on AI product demand, with recurring revenue grew more than 150% yoy.
• EU: European equities fell for a third consecutive session on Thursday, weighed by surging oil prices and the ECB's hawkish tone. The Stoxx 600 dropped 0.7% to 635.97, its lowest since 8 July, led lower by industrials and mining stocks. The DAX fell 0.8% to 25,361, the FTSE 100 declined 0.6% to 10,608 — its fifth straight losing session — and France's CAC 40 retreated 0.5%, erasing all year-to-date gains amid growing fiscal deficit concerns ahead of the 2027 presidential election. ASML fell 1.6%, KGHM Polska Miedz dropped 8.2% (copper tariff uncertainty), and Associated British Foods fell 7.9% after Primark comparable sales missed estimates. Energy and financials were the lone bright spots, with Maersk and Frontline hitting 52-week highs on surging tanker rates.
• Asia: Asian equities are broadly lower on Friday morning, tracking Thursday's Wall Street selloff driven by surging oil prices and elevated Treasury yields. The MSCI Asia Pacific Index fell 1.4% at the open, led by South Korea and Japan. The Kospi opened down 3.3% to 6,802.50, compounded by DeepSeek's release of its V4.1-Flash model — which reportedly slashes HBM memory requirements significantly — hitting South Korean memory names SK Hynix and Samsung Electronics. Japan's Topix fell 2.2% to 3,967. The Hang Seng closed down 1.3% to 24,954 on Thursday, with Alibaba (-2.6%) and Weichai Power (-7.1%) leading declines; HK markets are expected to open lower Friday. The STI (5,689.75) had been supported by strong August trading volumes, with SGX securities daily average value up 35% year-on-year, though the index faces headwinds from the regional risk-off tone. Bonds across Asia are also under pressure as 5-year Treasury yields reprice higher.

FX:

• USD strengthened broadly on Thursday, with the Bloomberg Dollar Spot Index up 0.3% to 1,189.82 as hotter PPI revisions and oil above $108/bbl reinforced expectations of a Fed hike next week.
• JPY was the session's biggest G10 loser, falling to 154.42, snapping a three-day winning streak as rising US yields and oil weighed. Technically, resistance near 155 is seen capping further upside.
• AUDUSD down 0.83% to 0.7157 and NZDUSD down 0.70% to 0.5798, as surging oil prices fuelled inflation concerns and pushed Australian and New Zealand bond yields to multi-year highs.
• EURUSD slipped 0.18% to 1.1612 and GBPUSD 0.26% to 1.3512, despite a 25bp ECB hike and a matching move by Denmark.

Commodities:

• Brent crude surged to above $107 per barrel, the highest since May, before edging slightly higher to near $110 in late US trading. WTI rose approximately 6.7% to around $103 per barrel. The rally is driven by escalating US-Iran hostilities disrupting Strait of Hormuz shipping, with Saudi Arabia reporting a sharp drop in production last month. Brent is up a further 0.4% in early Asian trading on Friday.
• Copper hit a fresh all-time high of $14,875 per tonne on the LME on Thursday before slumping more than 3% after a report indicated the White House has not yet made a decision on refined copper tariffs, citing concerns that higher prices could raise manufacturing costs. Copper stocks were hit hard — Freeport McMoRan -8.0%, Southern Copper -7.0%, Teck Resources -7.9%.
• US natural gas futures settled higher, reversing earlier losses, as climbing crude oil and European gas prices triggered basket buying across energy products. European natural gas prices hit a three-year high amid the Middle East supply disruption.

Fixed income:

• Yields rose sharply across the curve, with the 2-year note up 15 basis points to 4.582% (highest since 2024), the 10-year up 11 basis points to 4.954% (approaching the psychologically significant 5% level), and the 30-year up 7.6 basis points to 5.369% (highest since 2007). The 3-year yield also rose 15 basis points to 4.678%. The selloff was the largest for the 2-year since the April 2025 market dislocation.
• A $22 billion 30-year Treasury auction cleared at 5.308% — the highest yield at auction since 2001 — stopping through the when-issued yield by 2.7 basis points, a sign of strong demand. The share awarded to primary dealers was a record low, indicating robust end-investor appetite at these yield levels.

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