Newsquawk Daily Asia-Pac Opening News - 2nd October 2026

US stocks closed with marginal gains on what was a choppy day, with the Nasdaq 100 mildly outperforming as Technology led, supported by software names following strong Accenture (ACN) earnings, while Synopsys (SNPS) also gained after raising guidance following its deal with OpenAI. Treasuries saw two-way trade, but ultimately bull steepened as front-end yields led the rally, with price action influenced by economic data, Fed speak, and geopolitics as markets entered Q4. There were several data releases in which jobless claims remained low, the Revelio Labs labour market report showed an acceleration in September, while the Chicago Fed unemployment nowcast was unchanged at 4.1%, while ISM Manufacturing PMI missed expectations, although prices paid jumped and the employment component improved, with all eyes now turning to Friday's NFP report. USD was largely firmer against peers amid choppy risk sentiment and in what was a haven trade across FX and fixed income, while there was an abundance of Fed speakers, including Jefferson (voter), who echoed Vice Chair Williams remarks on Tuesday and stated they may take more time to decide the next rate move and that giving more time to weigh data will allow the Fed to make a better call on rates, while Bowman (voter) also sees no urgent need for more rate moves this year. Meanwhile, data releases were somewhat mixed as the ISM Manufacturing headline missed, but the closely watched Prices component jumped to 77.9 from 71.1, while initial claims were little changed and Challenger layoffs eased slightly in September. Looking ahead, highlights include South Korean CPI, Japanese Unemployment Rate & Tokyo CPI, Supply from Australia, Holiday Closures in Mainland China & India. SNAPSHOT STOCKS S&P 500 +0.2% Nasdaq Comp. Flat DJIA Flat Russell 2000 +0.4% ES Dec'26 +0.1% RTY Dec'26 +0.4% NQ Dec'26 +0.2% YM Dec'26 -0.1% FX DXY +0.5% (102.00) EUR/USD -0.8% USD/JPY +0.5% GBP/USD -0.5% BONDS US T-Note Dec'26 +13 ticks 10yr Bund Dec'26 +86 ticks US 10yr Yield 5.25% German 10yr Yield 3.52% ENERGY & METALS WTI Nov'26 +2.8% Brent Dec'26 +5.8% Spot Gold +0.4% LME Copper -0.8% CRYPTO Bitcoin +1.3% Ethereum +0.5% As of 21:50BST/16:50EDT LOOKING AHEAD Highlights include South Korean CPI, Japanese Unemployment Rate & Tokyo CPI, Supply from Australia, Holiday Closures in Mainland China & India. Click for the Newsquawk Week Ahead. IRAN CONFLICT US President Trump said ramping up the bombing of Iran after the midterms was "possible", adding that some forms of ammunition were a little bit lower, according to Time Magazine. US President Trump reiterated that Iran cannot have a nuclear weapon, saying he now has to make a decision: either Iran signs a deal, or it will no longer exist. US President Trump said he had repeatedly stated it would take four to six weeks to eliminate the Iranian nuclear threat, but that he had achieved this in one night. He added that the remaining time was to ensure the threat stays eliminated. US President Trump said Iran was connected to the attempted attack on the plane, based on what he had heard. US official said three aircraft carriers and two landing groups will be deployed around Iran by the end of November, according to Al Jazeera. US Pentagon is sending a third aircraft-carrier strike group and additional Marine Corps ships to the Middle East, adding up to 10,000 more troops to the region, according to the Wall Street Journal, citing US officials. The report noted the arrival is expected by the end of November and that Trump recently told aides he expects to resume bombing Iran in November,** while the Roosevelt crew is prepared for an extended deployment, according to sources. Iranian President Pezeshkian said Tehran will never shy away from dialogue, despite the US having targeted Iran several times, according to Tasnim. Iranian Foreign Minister Araghchi said mediators are making efforts to advance the diplomatic track, according to Al Arabiya. Iran's Foreign Minister said the only way to restore security in the Strait of Hormuz and the region is to stop US movements. He added that Iran is determined to defend its interests and commends the efforts of some mediators to advance diplomacy, according to Al Jazeera. Iran’s Foreign Minister reportedly suggested in private talks that his country was willing to restore nuclear inspectors’ access to bombed facilities in exchange for sanctions relief, according to Bloomberg citing sources. However, IRNA denied Bloomberg reports that Iran proposed the return of IAEA inspectors to bombed nuclear facilities in exchange for easing sanctions. Local sources reported that a 2.5mln bbl capacity supertanker travelling through the Strait of Hormuz illegally was hit 8 kilometres off the coast of Oman and was burning, according to Fars News Agency. UK counter-terrorism police arrested a sixth man, a dual British-Iranian national, in connection with the RAF Fairford plot. The man was arrested on suspicion of preparing terrorist acts. Separately, Iran's Foreign Ministry summoned the British Ambassador over claims that Iran was linked to the Fairford military base incident. Israel could respond if investigators confirm an Iranian link to the co-pilot accused of trying to crash the Dubai-to-Tel Aviv flight, regional sources told Fox News, although Israeli PM Netanyahu cautioned that it was “too early to say whether he had any connections with Iran or with anyone else.” Houthi-run Saba News Agency denied that the group attacked a power station in Saudi Arabia's Medina, citing sources. US TRADE US stocks closed with marginal gains on what was a choppy day, with the Nasdaq 100 mildly outperforming as Technology led, supported by software names following strong Accenture (ACN) earnings, while Synopsys (SNPS) also gained after raising guidance following its deal with OpenAI. Treasuries saw two-way trade, but ultimately bull steepened as front-end yields led the rally, with price action influenced by economic data, Fed speak, and geopolitics as markets entered Q4. There were several data releases in which jobless claims remained low, the Revelio Labs labour market report showed an acceleration in September, while the Chicago Fed unemployment nowcast was unchanged at 4.1%, while ISM Manufacturing PMI missed expectations, although prices paid jumped and the employment component improved, with all eyes now turning to Friday's NFP report. SPX +0.19% at 7,666, NDX +0.31% at 30,502, DJI +0.04% at 50,932, RUT +0.35% at 2,807. Click here for a detailed summary. TARIFFS/TRADE US President Trump's administration has reportedly been taking steps to use China's dependence on US aviation suppliers as leverage in trade negotiations, according to sources. USTR Greer said the US is on track for record goods trade exports this year and that Trump's trade program is trending in the right direction, while he added that the Trump admin thinks the concept of unconditional most-favoured nation tariffs warrants reform. USTR Greer said the US has always been open to a deal with Canada, although gaps remain between the two sides. He added that the question is whether Canada wants to reach an agreement on some of the issues. NOTABLE HEADLINES Fed's Bowman (voter) said she sees no urgent need for more rate moves this year, while she touted benefits of a Fed capital plan tied to treasuries. Fed's Cook (voter) said supply shocks have had surprisingly persistent effects, becoming more salient for policy, while she stated it is possible that the optimal policy response to a supply shock could be sector-dependent, and they have to be attentive to consumer confidence. Cook also commented that AI is causing pockets of inflation and doesn't think private credit is having a big effect on financial stability. Fed's Jefferson (voter) said the Fed is fully committed to returning inflation to its 2% target and may need more time before deciding on its next rate move. He said future rate changes should be driven by the data and that weighing additional information would allow the Fed to make a better decision. Jefferson added that economic output and the labour market are broadly solid, while bond yields indicate that market participants are reassessing the outlook. He also said the September rate hike would help anchor inflation expectations. Fed's Kashkari (2026 voter) said the economy continues to surprise him with its resilience, adding that the Fed will do what is necessary to bring inflation back to target. He said he does not know how high rates will need to go to reduce inflation, while noting that the broader economy is strong, although some areas, such as housing, remain weak. Fed's Kashkari (2026 voter) said he does not have a strong view on an October rate hike and is open-minded about the pace of further tightening. He has pencilled in one more hike this year and another in 2027. Kashkari added that monetary policy does not appear to be providing much restraint at present and that he does not see meaningful tightening in financial conditions based on the data. Fed's Collins (2028 voter) said economic growth is near trend, if not above it, while the labour market is close to full employment but inflation remains too high. She added that she would not get ahead of the next meeting. Fed's Schmid (2028 voter) said there is more work to do on inflation and that energy prices are one of the biggest challenges for monetary policy. He said the Fed is trying to determine from the data how much inflation is driven by demand and how much by supply shocks. Fed's Schmid (2028 voter) said the persistent rise in long-term interest rates is beginning to affect more parts of the economy, according to Axios. He also noted that there are signs of friction among users of long-term credit, particularly in multifamily housing and commercial lending. He added that higher mortgage rates are beginning to affect home prices by changing the cost of credit relative to valuations. US President Trump said it was 'pretty bad' that interest rates keep rising and reiterated that the US should pay the lowest interest rate. He said he does not blame Warsh for rates, adding that high rates are hurting the economy more than inflation and that certain levels of inflation help pay off debt. US President Trump reiterated that interest rates will hurt US growth, adding that the administration has not done a good job explaining inflation to the public. He said he wants Warsh to vote the way he wants. Treasury Buyback (Liquidity support, 10-20-year nominal coupons, max USD 6bln): Accepts USD 6.0bln of USD 46.39bln offers, accepts 2 of 41 eligible securities. DATA RECAP US S&P Global Manufacturing PMI Final (Sep) 55.9 vs. Exp. 57.0 (Prev. 53.9) US ISM Manufacturing PMI (Sep) 54.5 vs. Exp. 55.0 (Prev. 54.6) US ISM Manufacturing New Orders (Sep) 55.3 (prev. 53.7) US ISM Manufacturing Prices (Sep) 77.9 vs Exp. 72.3 (prev. 71.1) US ISM Manufacturing Employment (Sep) 52.7 (prev. 51.2) US Construction Spending (Aug MM) 0.9% vs. Exp. 0% (Prev. -0.1%) US Initial Jobless Claims (Sep/26) 197K vs. Exp. 200K (Prev. 198K) US Continuing Jobless Claims (Sep/19) 1701K vs. Exp. 1730K (Prev. 1712K) US Challenger Job Cuts (Sep) 43.281K (Prev. 52.881K) Revelio Labs Nonfarm Payrolls (Sept.): +56.9k (prev. +36.5k, rev. +40k) FX USD was largely firmer against peers amid choppy risk sentiment and in what was a haven trade across FX and fixed income, while there was an abundance of Fed speakers, including Jefferson (voter), who echoed Vice Chair Williams remarks on Tuesday and stated they may take more time to decide the next rate move and that giving more time to weigh data will allow the Fed to make a better call on rates, while Bowman (voter) also sees no urgent need for more rate moves this year. Meanwhile, data releases were somewhat mixed as the ISM Manufacturing headline missed, but the closely watched Prices component jumped to 77.9 from 71.1, while initial claims were little changed and Challenger layoffs eased slightly in September. EUR saw notable underperformance as it gave way to CHF strength, while sources also noted that the US warned France and Germany to release emergency diesel stocks or face a possible export ban. GBP trickled lower throughout the day amid a firmer buck and dipped to sub-1.3200 territory. JPY remained pressured amid the firmer buck and recent weak Tankan survey, with USD/JPY back at the 158.00 handle, while participants look ahead to the latest Tokyo inflation data. FIXED INCOME T-notes settled higher on what was a choppy session for Treasuries amid mixed data, Fed speak and geopolitics, while participants look ahead to the looming NFP report. COMMODITIES Oil prices moved higher as further progress between the US and Iran remained to be seen, leaving markets dialling up the geopolitical risk premium, while further upside was seen ahead of settlement after WSJ reported that the US is sending up to 10k troops, ships, and aircraft carriers to the Middle East, with Trump reportedly telling aides he expects to resume bombing Iran in November. Crude flows through Saudi Arabia's East-West pipeline have recovered to around 5.5mln BPD, allowing exports to restart from the Red Sea port of Yanbu, according to Argus, citing a source. Iraq, Kuwait, Saudi Arabia, Qatar and the UAE have exported an average of 26% fewer barrels of crude oil during the conflict than over the same period last year, while the average price per barrel has risen 44% YTD, according to Tanker Trackers. US President Trump said the US will begin filling the Strategic Petroleum Reserve with Venezuelan oil at very little cost. Venezuela's oil exports fell to 1.08mln BPD in September, while exports to the US increased to 629k BPD and shipments to India and Europe declined to 253k BPD and 86k BPD, respectively. Canada PM Carney said Canada will fast-track the approval process for a proposed new crude oil export pipeline to its West Coast. The pipeline is intended to reduce reliance on oil exports to the US, while an expansion of the Roberts Bank terminal is planned to increase crude exports. US has reportedly told France and Germany to release emergency diesel stocks or face a possible export ban, according to sources. US Treasury Secretary Bessent said their European partners should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions. US Energy Secretary Wright said the US will ask Europe to release strategic diesel reserves, adding that he expects positive news and is highly confident Europe will help address the situation, according to Fox. He also said gasoline and diesel prices will be lower by the election. USTR Greer said the US believes Europe should release some of its diesel stockpiles, noting that Europe holds diesel reserves. EU Trade Chief Sefcovic said he discussed high diesel prices with USTR Greer and spoke about a coordinated approach to releasing diesel reserves, while he added that any release would form part of a wider ongoing discussion, according to FBN. EU Energy Union Taskforce is reportedly due to meet on Friday to discuss potential diesel stock releases, according to two EU diplomats. GEOPOLITICAL RUSSIA-UKRAINE Russian President Putin said Russia needs security guarantees over Ukraine and is ready to hold talks and conclude them as soon as possible, but only on conditions acceptable to the Russian people. He added that he does not see a willingness on Ukraine's part to negotiate. Russian President Putin said Russia is not threatening anyone, but would consider using all weapons in its arsenal if a threat emerged to the Russian exclave of Kaliningrad. He said Russia does not intend to attack anyone but would respond to aggression. Putin added that Ukraine had partially achieved its aims by striking Russian oil refineries and that Russia had responded in kind. He estimated that Ukrainian strikes on oil refineries had cost Russia 1% of GDP, said Russian diesel would not reach global markets due to sanctions on Russian oil, and rejected proposals to halt strikes in the Black Sea. Russian President Putin said he supports a meeting with Chinese President Xi and US President Trump, but added that the agenda would need to be worked out. He said Russia is developing its nuclear forces, which are more than 98% modernised, and is ready to resume dialogue with the US on strategic nuclear weapons if Washington expresses an interest. Russian President Putin said some European countries, including Germany, have seized Russian assets and that Russia is responding in kind. He added that those countries may recover the assets under a favourable scenario. Kremlin spokesperson Peskov said there are no signals yet of a trilateral Russia-US-China summit. He also said NATO has no reason to worry if the alliance is not planning any action against Russia, according to Interfax. The Kremlin said Russia's letter to NATO on its readiness to resort to nuclear weapons should not be viewed as confrontational. It said Russia wants to ensure Kaliningrad's security, adding that the message comes amid a rapid military build-up in Europe. German Chancellor Merz said Germany is preparing for major hybrid attacks by Russia, adding that it would respond quickly and very carefully. ASIA-PAC NOTABLE HEADLINES Japanese PM Takaichi said the government will appropriately control total annual government bond issuance, taking into account both initial and supplementary budgets. She added that the FX market is determined by a number of factors, that she had told President Trump the undervaluation of the yen is a problem, and that Japan's economic policy is not aimed at manipulating FX. Takaichi also expects the consumption tax cut on food to be passed on to sales prices. Japanese PM Takaichi said the government will secure funding while meeting necessary fiscal needs under its "responsible proactive fiscal policy". She added that the planned consumption tax cut from next April should be reflected in lower prices, according to NTV. EU/UK NOTABLE HEADLINES UK Ministers are working up sweeping plans for welfare changes including scrapping a key disability benefit for under-25s and replacing it with a multibillion-pound package of support to get into work, according to The Guardian. BoE's Mann said UK markets have priced in a greater risk premium since the Middle East conflict intensified. Given rising upside risks to inflation, she said a risk-management strategy for monetary policy is appropriate. Mann added that when inflation dynamics and second-round effects are uncertain, raising the Bank Rate to reinforce the inflation target can help ensure a sustainable return to the 2% target with smaller losses to economic activity. ECB's Nagel said all ECB instruments are intended to deliver price stability, not to target certain yield levels. French PM Lecornu reportedly aims to secure EUR 43bln in new budget savings, while the government intends to reduce the deficit to 5% of GDP by 2027, according to BFM TV. German Chancellor Merz has halted Finance Minister Klingbeil's sugar tax draft bill, which targeted EUR 1.2bln from consumers, compared with an earlier EUR 450mln estimate, according to Bild. DATA RECAP UK S&P Global Manufacturing PMI Final (Sep) 51.9 vs. Exp. 52.0 (Prev. 51.7)