GGMA Markets Briefing: Micron Lifts Tech Futures as the BoJ Summary Sinks the Yen and Bonds Steady

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Here is a brief summary of today’s Markets Briefing: Micron Lifts Tech Futures as the BoJ Summary Sinks the Yen and Bonds Steady

·       The yen was the weakest major currency after the Bank of Japan's Summary of Opinions gave no signal of an October hike, with intervention risk now the two-way factor near the levels where the finance ministry last checked rates.

·       US stock futures rose, and Japanese shares jumped after Micron's forecast for the current quarter came in well above estimates, while Treasuries held near Wednesday's 2002 highs and the dollar gained against most majors.

·       Minneapolis Fed President Kashkari said inflation is still too high after the softer PCE print and that he projects one more hike this year and another in 2027, while Goldman Sachs pushed its next-hike call to December.

·       South Korea's exports rose by a record amount in September as semiconductor shipments more than tripled on AI infrastructure spending, leaving the widest trade surplus on record.

·       France presents a deficit-reduction budget today with its risk premium over Germany at the widest since 2012, and strategists see no obvious catalyst for a sustained narrowing of spreads.

·       Oil fell as traders bet the recovery in Middle East flows can be sustained, with Trump cooling on a diesel export ban and saying prices will start coming down, though US-Iran talks have stalled and two ships were hit in the Gulf.

Today's Macro Roadmap: Swiss CPI at 08:30 CET, the final euro-area and UK manufacturing PMIs from 09:55, euro-area unemployment at 11:00 and the French budget presentation, then US jobless claims at 14:30 and the ISM manufacturing index at 16:00 CET. Speakers include Bailey at 10:00, Nagel at 12:35, Kashkari on Bloomberg TV at 13:30, Mann at 14:00, Lagarde at 15:30, Waller at 16:00, Schnabel at 17:30, Jefferson at 19:30, Bowman at 21:00 and Cook with Williams at 21:30 CET, and OPEC+ meets on Sunday.

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GGMA Markets Briefing: Micron Lifts Tech Futures as the BoJ Summary Sinks the Yen and Bonds Steady

US stock-index futures rose and Asian technology shares gained after Micron's forecast for the current quarter came in well above estimates, while Treasuries held near Wednesday's peaks and the dollar strengthened against most of its major peers (BBG). Micron continued to post historically high gross margins but warned they will tighten slightly, and Alphabet rose in late trading after Google began rolling out its Gemini 4 Argon model (BBG). "While Micron shares lacked direction in after-hours trading, the results were encouraging as they underscored the need for continued investment to keep pace with robust AI demand," said Yugo Tsuboi, chief strategist at Daiwa Securities (BBG). Bloomberg writes that attention now turns to Friday's payrolls for clues on whether stocks can regain ground after the MSCI All Country World Index fell in September for the first time in three months (BBG).

In stocks, the Nikkei jumped 2.9% to 68,910, and the Kospi rose with chipmakers, while the ASX fell 1.8% to 8,657 after a much narrower Australian trade surplus and the RBA's Financial Stability Review (BBG). MSCI's emerging-markets index rose 0.6% to 1,722, with mainland China and Hong Kong closed for the National Day holiday. Nidec plunged in Tokyo after its auditor declined to give an opinion on its financial statements (BBG), and an investor managing about 1.8% of UBS urged the bank to leave Switzerland over the capital rules backed by the upper house of parliament, which UBS says would require an additional 16 billion dollars of CET1 capital, according to Bloomberg (BBG). In Europe, futures were lower: the Euro Stoxx 50 fell 0.5% to 6,264, the DAX 0.5% to 25,244 and the FTSE 0.5% to 10,610 ahead of the French budget. US futures were higher: S&P 500 futures rose 0.5% to 7,754, Nasdaq futures 0.9% to 30,977 and Dow futures 0.3% to 51,414, after Wednesday's cash session gave up its gains late in the day and the S&P 500 posted a slight loss for September (BBG) (LS).

Regarding central banks, the Bank of Japan's Summary of Opinions from the September meeting recorded one member saying the Bank will need to accelerate the pace of rate hikes if signs of an upward deviation in prices are observed, and another saying it is desirable to bring the policy rate closer to the approximate goal relatively soon, but it offered no clear signal of a move at the 30 October meeting (BBG) (Reuters) (LS). Reuters reports that opinions probably from the two dissenters cited lacklustre consumption and subdued services inflation, and that a Cabinet Office representative urged the Bank to examine the cumulative effects of past hikes carefully and to take its neutral-rate estimates into consideration (Reuters). Minneapolis Fed President Neel Kashkari told CNBC that inflation is still too high at around 3% and that Wednesday's data did not change that story for him, that he has raised his estimate of the neutral rate, and that he projects one more hike this year and another in 2027 (CNBC). Goldman Sachs pushed its forecast for the next Fed hike to December from October and said it sees a strong chance that the FOMC will ultimately conclude that additional hikes are unnecessary, Reuters reports (Investing). President Trump said former Chair Jerome Powell should be forced to resign from the Board after the Fed's inspector general found management failures but no misconduct in the headquarters renovation, and later said Chair Warsh will make his own decision (Ndtvprofit). Bank of England Governor Andrew Bailey told the BBC that the Bank is watching the money being invested in AI very carefully and that "you could see some correction of asset prices at some point," per Bloomberg (BBG). Currently, STIR traders price 9 basis points of tightening for the Fed's October meeting, a 36% probability of a rate rise, and 30 basis points cumulatively by December. For the ECB, markets price 6 basis points of tightening for the October meeting, a 24% probability of a rate rise, and 28 basis points by December. For the Bank of England, markets price 21 basis points for the November meeting, an 83% probability of a rate rise, and 39 basis points by December. For the Bank of Japan, markets price 5 basis points for the October meeting, a 20% probability of a rate rise, and 26 basis points by December, after this morning's summary. For the RBA, markets price 5 basis points for the November meeting, a 22% probability of a rate rise, and 13 basis points by December.

In currencies, the dollar index rose 0.2% to 101.62 after its best month since March, and Bloomberg writes that the dollar strengthened against most of its major peers (BBG). The yen was the weakest in the G10, falling 0.6% to 158.30 per dollar, as swaps pricing for an October hike slipped after the BOJ summary, and Takuya Kanda at Gaitame.com told Bloomberg that intervention concerns are likely to cap the dollar above 158 (BBG). The New Zealand dollar fell 0.3% to 0.5619, its lowest since late November (BBG); the Australian dollar slipped 0.1% to 0.6942; the euro fell 0.1% to 1.1316; sterling fell 0.1% to 1.3247; and the franc eased vis-a-vis the dollar to 0.8367 ahead of the Swiss CPI.

In bonds, the ten-year Treasury yield was little changed at 5.28%, down 0.8 basis points, after reaching its highest since May 2002 on Wednesday when the initial rally on the softer PCE print reversed by midday (LS), and the thirty-year eased 0.8 basis points to 5.62% after setting a 2002 high in New York trading (BBG). The two-year yield was at 4.88%. Global government bonds posted their worst quarter since late 2024, and Jimmy Louca at Australian Retirement Trust told Bloomberg that bond markets face a triple whammy of big government spending, strong growth and geopolitical supply shocks (BBG). Bloomberg's survey of the drivers lists resilient growth, the oil shock, rate hikes, more than 400 billion dollars of bonds sold this year to fund AI infrastructure, record government borrowing and Japan's likely sale of foreign bonds to defend the yen, and quotes AXA's Gilles Moec saying long-term yields have not necessarily reached a self-stabilising level (BBG). The Japanese ten-year yield rose 3.8 basis points to 3.10%, with the thirty-year also higher, as longer JGB yields rose after the BOJ summary (BBG). The Australian ten-year yield rose 3.5 basis points to 5.38% after Tuesday's rate rise. The spread on CCC rated US corporate bonds crossed into distressed territory for the first time since the 2023 regional-bank crisis, Bloomberg writes, as higher yields raise refinancing costs for the most levered borrowers (BBG). France presents a 54 billion euro deficit-reduction plan today with the ten-year premium over Germany at its widest since 2012, and ING's Charlotte de Montpellier told Bloomberg she sees no obvious catalyst for a sustained narrowing of spreads (BBG). The Move proxy fell 2.7 points to 87.5.

In commodities, oil fell as traders bet that the recovery in Middle East flows can be sustained: WTI fell 1.3% to 89.20 dollars and Brent 1.1% to 96.96 dollars (BBG). President Trump said daily exports through Hormuz are back at pre-war levels, that oil prices are going to start coming down, and that a diesel export ban he is still thinking about would probably raise gasoline prices, while Energy Secretary Wright said European announcements of new diesel supply will push prices meaningfully lower (CNBC). Reuters reports that Iran has received a US response to its seven-day proposal, that the sides largely agree on the steps but not their order, and that the UKMTO reported two ships hit by projectiles on Tuesday (Reuters). Axios reports that Secretary of State Rubio ordered Iran's UN delegation to leave the country after the talks stalled (Axios). The Dallas Fed's energy survey showed activity expanding at a slower pace in the third quarter, with respondents expecting WTI at 88 dollars at year-end, below the price that prevailed during the survey (Dallasfed). Gold rose 0.5% to 4,180 dollars and the precious-metals index 0.7%, copper slipped 0.1%, and the grains index fell 0.4% after the USDA's quarterly stocks report showed corn stocks above estimates (LS). Bitcoin rose 0.4% to 83,990 dollars and Ethereum 0.9% to 2,704 dollars.

In corporate news, Micron reported fourth-quarter revenue and earnings above estimates and guided first-quarter revenue well above consensus, and said it plans to increase capital returns (LS). Apple plans to make its push into the smart-home market on 13 October, and the Federal Trade Commission is scrutinising OpenAI, Anthropic and other AI companies about the safety of their products after cybersecurity incidents, Bloomberg writes (BBG). Tencent leased a large block of advanced AI chips from Oracle in a multibillion-dollar deal, the FT reported, and Paramount Skydance and Warner Bros. Discovery expect their merger to close on 6 October (LS). President Trump said South Korea will launch 200 billion dollars of new US investments, including nuclear reactors and a Texas gas power project, though Seoul said participation in the Alaska LNG project is not yet decided (LS).

In geopolitics, the last US troops left Iraq after 23 years, which Iran-backed factions celebrated as a defeat for Washington, and the Revolutionary Guard urged Americans to vote out President Trump's allies five weeks before midterm elections that polls show the war has made unpopular (Reuters). The BBC's Russia editor writes that everything points to Putin continuing the war in Ukraine, encouraged by Kyiv's shortage of air-defence missiles, and that Foreign Minister Lavrov described the conflict as a war Europe is waging against Russia (BBC). Putin speaks at the Valdai forum today (BBC).

Data and the day ahead: Japan's Tankan index for large manufacturers rose to 24 in the third quarter from 22, a sixth straight improvement on AI-related demand but short of the 25 expected, the large non-manufacturers' index slipped to 35 from 37 against 36 expected, and large firms' capital-spending plans were trimmed to 11.3% from 11.5% against 12.3% expected (Nikkei). South Korea's exports rose 83.5% from a year earlier in September against 61.7% expected and 68.7% in August, a record, with the trade surplus at 49.85 billion dollars against 38.2 billion expected, as semiconductor shipments more than tripled (Reuters). Australia's trade surplus narrowed to A$495m in August against A$2,000m expected, from A$1,923m, and job vacancies fell 0.9% in the three months to August after a 2.1% decline (LS). Japan's final manufacturing PMI was confirmed at 54.1, Australia's was revised up to 49.6 from the 49.3 flash, and New Zealand building permits rose 5.6% in August after a 4.3% fall (LS). The RBA's Financial Stability Review said private credit does not pose a system-wide risk and that most borrowers would keep positive equity even if house prices fell a further 20% (BBG). Still to come: Swiss CPI at 08:30 CET, where consensus looks for 1.0% y/y from 0.8% and core at 0.5% from 0.4%, the final euro-area and UK manufacturing PMIs from 09:55 CET, euro-area unemployment at 11:00 CET, expected unchanged at 6.4%, and the French budget presentation. In the US, initial jobless claims at 14:30 CET, where consensus looks for 200k from 197k, precede the ISM manufacturing index at 16:00 CET, where consensus looks for 55 from 54.6 with prices paid at 73 from 71.1. Speakers include Bailey at 10:00 CET, Nagel at 12:35, Kashkari on Bloomberg TV at 13:30, Mann at 14:00, Pill at 14:30, Barkin, Collins and Schmid at 15:05, Lagarde at 15:30, Waller at 16:00, Schnabel at 17:30, Jefferson on the economy and monetary policy at 19:30, Bowman at 21:00, Rogers of the Bank of Canada at 21:05 and Cook with Williams at 21:30 CET. OPEC+ meets on Sunday, and Friday brings September payrolls and the euro-area flash inflation estimate.

Time Stamp: 1 October 2026, 07:40 CET