Newsquawk Daily Asia-Pac Opening News - 7th October 2026

US stocks gained and most indices closed in the green with the S&P 500 and Nasdaq printing fresh record highs amid risk-on trade as global yields moved lower, although the small-cap Russell 2000 lagged and finished in the red. Given the sentiment, all sectors aside from Health were higher, with Utilities and Consumer Discretionary outperforming as the former was buoyed by Constellation Energy surging after it entered into a power deal with Google. Meanwhile, Treasuries gained, largely tracking global benchmarks, as some of the European political woes eased on Tuesday, and precious metals were also firmer, while the crude complex saw two-way trade with little new major developments regarding energy, although the Saudi Energy Minister reportedly said that 5.8mln BPD (vs capacity of 7mln BPD) is currently flowing through the East-West pipeline, and operations resumed around five days after the hit. USD was pressured as the bid in global bonds and risk-on across equities resulted in greater risk-appetite for other major currencies. As such, haven alternatives CHF and JPY lagged, marginally weakening against USD. The data calendar was light, while there were some comments from Fed speakers, with Daly (2027 voter) expressing concerns that AI, tariffs, and higher energy costs could keep inflation stickier than previously thought, requiring more tightening, while Schmid (2024) sees a way to go to combat inflation, arguing work still needs to be done on short-term rates despite higher long-term yields. Looking ahead, highlights include Australian AIG Manufacturing Index & Building Approvals, Japanese Labour Cash Earnings & Leading Index, RBI Rate Decision, Comments from Fed's Logan & Williams, Supply from Australia, Chinese Holiday Closure. SNAPSHOT STOCKS S&P 500 +0.6% Nasdaq Comp. +0.5% DJIA +0.5% Russell 2000 -0.6% ES Dec'26 +0.7% RTY Dec'26 -0.7% NQ Dec'26 +0.6% YM Dec'26 +0.6% FX DXY -0.2% (101.85) EUR/USD +0.4% USD/JPY +0.1% GBP/USD +0.4% BONDS US T-Note Dec'26 +7 ticks 10yr Bund Dec'26 -1 ticks US 10yr Yield 5.28% German 10yr Yield 3.48% ENERGY & METALS WTI Nov'26 +0.5% Brent Dec'26 +0.7% Spot Gold +0.5% LME Copper -0.1% CRYPTO Bitcoin -0.6% Ethereum -0.5% As of 21:50BST/16:50EDT LOOKING AHEAD Highlights include Australian AIG Manufacturing Index & Building Approvals, Japanese Labour Cash Earnings & Leading Index, RBI Rate Decision, Comments from Fed's Logan & Williams, Supply from Australia, Chinese Holiday Closure. Click for the Newsquawk Week Ahead. IRAN CONFLICT US President Trump said Iran is doing very poorly and stated regarding the Strait of Hormuz that millions of barrels of oil have been delivered just over the last couple of days, while he added that prices are now coming way down and oil will be going way down as soon as the war is over, which will be soon. US CENTCOM refuted claims that a US Navy helicopter was downed in the Red Sea. Qatari Foreign Ministry spokesperson said contacts and visits are ongoing in an effort to achieve progress in talks between the US and Iran, according to Al Jazeera. Separately, Qatar said the US and Iran are still engaged in talks, according to AFP. Iranian Interior Minister Momeni said talks in Doha addressed Qatar and Pakistan's mediation efforts, with proposals discussed aimed at reducing regional tensions and averting further war, according to IRNA. Momeni said talks with the Emir of Qatar were "constructive" and that he would convey the Qatari Emir's views on regional developments to President Pezeshkian. Iranian government spokesperson said Iran is ready for negotiations but will defend the country whether through war or negotiations, according to Iran International. Iranian Defence Ministry spokesperson said Iran's targets for hitting the enemy have been determined in advance and the armed forces are ready to target. He added that the armed forces will respond to any aggression with more advanced equipment and technologies. An explosion was heard on Qeshm Island, Iran, from the sea, according to IRNA. Several missiles were launched towards the Strait of Hormuz, according to Naya. Emirati tanker DRAGON FORTUNE was unable to pass through the Strait of Hormuz today despite a US escort. The ship changed course after receiving a warning, and its Automatic Identification System was also turned on. A ship was attacked off Oman's Musandam coast, according to Fars. Oman said it carried out a medical evacuation for 10 crew members of a Panama-flagged commercial vessel that was attacked northeast of Lima. UKMTO announced a time-delayed report that an outbound oil tanker was struck by an unknown projectile in the Strait of Hormuz on October 5. Local sources reported hearing an explosion in Sulaymaniyah province in northern Iraq, according to ISNA. Saudi-led coalition said it intercepted and destroyed a ballistic missile launched by Yemen's Houthis towards Khamis Mushait. Yemeni Houthis reportedly now have the capability to close all Saudi airports and ports, according to Al Mayadeen citing a Houthi political bureau member, who added that they believe it is unlikely Turkey and Pakistan will directly enter the Yemeni war. Yemeni sources said Saudi-backed forces carried out six airstrikes on Al-Amri and Bab al-Mandab in Dhubab district and three strikes on Hayfan, according to Al Alam. US TRADE US stocks gained and most indices closed in the green with the S&P 500 and Nasdaq printing fresh record highs amid risk-on trade as global yields moved lower, although the small-cap Russell 2000 lagged and finished in the red. Given the sentiment, all sectors aside from Health were higher, with Utilities and Consumer Discretionary outperforming as the former was buoyed by Constellation Energy surging after it entered into a power deal with Google. Meanwhile, Treasuries gained, largely tracking global benchmarks, as some of the European political woes eased on Tuesday, and precious metals were also firmer, while the crude complex saw two-way trade with little new major developments regarding energy, although the Saudi Energy Minister reportedly said that 5.8mln BPD (vs capacity of 7mln BPD) is currently flowing through the East-West pipeline, and operations resumed around five days after the hit. SPX +0.58% at 7,819, NDX +0.48% at 31,224, DJI +0.49% at 51,526, RUT -0.59% at 2,830. Click here for a detailed summary. TARIFFS/TRADE US Secretary of State Rubio said the era of free trade agreements is unlikely to return for the foreseeable future. US and China are holding informal, preliminary discussions on reciprocal nuclear site visits, with the Trump administration planning to pursue the proposal in the coming months, according to CNN. China's MOFCOM said it hopes France and Germany will uphold open cooperation and free trade, abide by WTO rules and refrain from encouraging the EU to use protectionist tools at every turn. It added that this would avoid taking the wrong path in the wrong way and ultimately backfiring on themselves. China and EU trade officials reportedly held a preparatory video meeting. China said it will monitor the UK's moves on EV tariffs and respond accordingly. NOTABLE HEADLINES Fed's Bowman (voter) did not comment on monetary policy and said the Fed will consider updating fixed-asset thresholds later this year. The Fed plans to overhaul bank supervision responsibilities, with the new structure consisting of five regions across the US, departing from the regional Reserve Bank-led model. Bowman said they are aiming for early next year as the start of a new oversight system. Fed's Daly (2027 voter) said she was very pleased and very supportive of the rate hike in September, while she added that whether more will be needed depends on the same set of conditions and noted that if shocks from tariffs, oil prices from the Middle East conflict and AI prove to be conventional shocks that are temporary, then they may not need more, which she still has some probability on. However, she also stated that if the shocks compound each other or last longer than forecast, including through a second round of tariff negotiations resulting in more tariffs, that would extend the period over which the shocks play out. Fed's Daly (2027 voter) told Axios some companies are preparing for an AI-fueled chip squeeze that could push up prices far beyond the data centre boom alone. She also stated that effects of AI, tariffs and higher energy costs could last longer than expected or compound each other, keeping inflation elevated and requiring more tightening. Fed's Schmid (2028 voter) said the labour force remains in a good place, adding that there is still a way to go in beating inflation and that credibility is at stake in the fight against inflation. US President Trump said they have a very strong dollar because they are doing well, while he added that a strong dollar is good in many ways but also stated that they can make a case that a strong dollar slows things down. US President Trump said he thinks they are going to do very well in the midterms, while he thinks that the rallies he is doing are really changing it around. DATA RECAP US Trade Balance (Aug) -105.60B vs. Exp. -102B (Prev. -88.60B) US Exports (Aug) 315.2B (Prev. 310.7B) US Imports (Aug) 420.8B (Prev. 399.3B) US ADP Employment Change Weekly 23.75K (Prev. 20K) FX USD was pressured as the bid in global bonds and risk-on across equities resulted in greater risk-appetite for other major currencies. As such, haven alternatives CHF and JPY lagged, marginally weakening against USD. The data calendar was light, while there were some comments from Fed speakers, with Daly (2027 voter) expressing concerns that AI, tariffs, and higher energy costs could keep inflation stickier than previously thought, requiring more tightening, while Schmid (2024) sees a way to go to combat inflation, arguing work still needs to be done on short-term rates despite higher long-term yields. EUR was firmer and shrugged off the weaker-than-expected EU Retail Sales, while attention was on comments from officials, including several ECB speakers, which ultimately provided little to shift the dial, while French National Rally leader Le Pen's draft alternative budget called for reigning in public spending and noted an openness to a wealth tax, but lacked funding details. GBP benefited from the weaker dollar and gained a firmer footing above the 1.3200 level, with data light although participants continue to await the Budget announcement later this month, with Chancellor Healey reportedly considering a major intervention to cut energy bills for poorer households, while he made no decision on taxes following a meeting with bank chiefs and told UK banks he is facing a difficult situation. Furthermore, Morgan Stanley recommended shorting GBP/USD at 1.3220 with a target of 1.2850 and a stop of 1.3350 ahead of the UK Budget. JPY was choppy and ultimately lagged alongside the heightened risk appetite, while the latest Labour Cash Earnings data from Japan is due overnight. FIXED INCOME T-notes rebounded, tracking gains across global bonds, with JGBs moving higher overnight following a strong Japan 10-year auction, while some follow-through was seen during the European morning as OATs rallied in the wake of Le Pen's draft budget, easing some of the recent French fiscal concerns. COMMODITIES Oil prices saw two-way trade on Tuesday, but ultimately settled more-or-less flat, with market-moving geopolitical headlines a bit thinner, and with traders continuing to digest the current whereabouts of the US/Iran talks and position of either side. IEA is expected to decide details of the G7 diesel and oil stock release at its Board meeting on October 14-15, according to sources. US EIA STEO sees 2026 world oil demand at 102.4mln BPD (prev. 102.6mln BPD) and 2027 at 104.6mln BPD (prev. 105mln BPD) while it sees world oil production in 2026 at 101.1mln BPD (prev. 100.6mln BPD) and in 2027 at 109.6mln BPD (prev. 109.9mln BPD). US Energy Secretary Wright said he thinks diesel prices peaked a few weeks ago, adding that Hormuz is still a conflict zone, hence crude being near USD 100/bbl, but crude prices are coming down. Saudi Arabia's East-West pipeline sustained damage to three of its 11 pumping stations, but the pipeline itself was not damaged, according to Argus citing sources. Saudi Energy Minister said 5.8mln BPD is currently flowing through the East-West pipeline, according to Al Hadath, adding that operations resumed around five days after the hit. Saudi Aramco CEO said oil market pressure will persist until the Strait of Hormuz reopens, according to Fars, adding that rebuilding oil inventories could take up to two years. EU officials will hold an Oil Coordination Group meeting on Wednesday. Ecuador's state oil company said it has resumed oil shipments via the SOTE pipeline. Chile's government estimates the 2026 average copper price at USD 6.15/lb and 2027 at USD 5.65/lb. US Agriculture Secretary Collins said he will make a big announcement on America's "seed supply". GEOPOLITICAL RUSSIA-UKRAINE Ukrainian President Zelensky said updated intelligence shows Russia is preparing a "massive attack", adding that much depends on the reaction of world leaders who "have the defensive capabilities we need and can provide them to the US." Russian Defence Ministry reported a strike on a fuel tanker in the Ukrainian port of Yuzhny, according to Interfax. Kremlin said Iranian President will take part in the Russia-led summit of ex-Soviet leaders in Turkmenistan on Friday and will meet Putin. It added that a trilateral meeting between Putin, Trump and Xi at the APEC Summit in China in November is an interesting idea, while a bilateral meeting between Putin and Xi Jinping will take place at the APEC summit. Russia's Kremlin said Lithuania's parliament vote to lift the nuclear arms ban is provocative, adding that Russia will be forced to act to protect its own security if Lithuania hosts nuclear weapons. Bulgaria's President said a drone struck two ships in the Black Sea economic zone of Bulgaria. EU envoys are expected to approve major new Russia sanctions on Wednesday, adding about 1,570 companies and people in the military-industrial complex, particularly missile production. US Secretary of State Rubio said Ukrainian membership in NATO is not on the table right now. ASIA-PAC NOTABLE HEADLINES BoJ Governor Ueda said Japan's economy is recovering moderately, albeit with some weakness, while the September Tankan showed business sentiment remained in good shape. Ueda stated the pace and timing of future policy adjustments will be decided based on the likelihood of the baseline projections materialising and associated risks, while he added that the BoJ will continue to raise the policy rate in accordance with economic activity, prices and financial conditions. BoJ board member Sato supports continuing interest rate hikes but did not specify a timing, citing concerns about weakening personal consumption, according to Kyodo. Sato said she "agrees with the policy of adjusting (the policy interest rate) in stages", aligning with the BoJ's stance of continuing to raise interest rates, while she expressed concern about weakening personal consumption and avoided specifying when the next interest rate hike would occur. DeepSeek is considering doubling its latest funding round to up to USD 15bln, according to CNBC citing sources. EU/UK NOTABLE HEADLINES UK Chancellor Healey made no tax decisions following a meeting with bank chiefs, who warned that a windfall tax could damage international investor sentiment towards the UK, according to The Times. It was separately reported that Healey told UK banks he is facing a difficult situation, but provided no details on potential bank-related measures in the budget, according to FT citing sources. UK Chancellor Healey is considering a major intervention to cut energy bills for poorer households at this month’s budget, according to The Guardian. BoE's Mann said supply shocks are embedding inflation. ECB's Elderson said a refocusing exercise launching in mid-October will review accumulated supervisory measures. ECB's Kocher said the Euro area economy is proving resilient to shocks, while he added that energy prices pose an upside risk to forecasts. ECB's Rehn said energy inflation has not yet spread to other goods, while he added that high long-term rates are contributing to a slowdown in growth and reducing the pass-through of energy prices to other prices and wages. Furthermore, he said he is closely monitoring market conditions but would not comment on developments in a specific country. ECB's Rehn said it is not timely to discuss the ECB safety net. French Finance Minister Lescure said France is not at the stage of talking about ECB TPI and needs to do everything to avoid reaching such a point. French National Rally leader Le Pen said France could face a default if President Macron's policy continues. Le Pen said she plans to bring the French deficit below 3% by 2032 at the latest and is planning for a deficit below 5% from 2027, while she added that they would be open to some kind of wealth tax and that it would be important to discuss an intervention with the ECB. DATA RECAP UK S&P Global Construction PMI (Sep) 46.1 vs. Exp. 45.2 (Prev. 44.3) German Factory Orders (Aug MM) -10.6% vs. Exp. -1.0% (Prev. 2.5%) European Retail Sales (Aug MM) 0.1% vs. Exp. 0.2% (Prev. -0.6%) European Retail Sales (Aug YY) 0.8% vs. Exp. 1.0% (Prev. 0.4%)