GGMA Markets Briefing: Oil Climbs and Treasuries Slip as Asia Stalls After Wall Street's Records

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Here is a brief summary of today’s Markets Briefing: Oil Climbs and Treasuries Slip as Asia Stalls After Wall Street's Records

·       Asian stocks slipped and Treasuries fell as oil climbed, breaking from a Wall Street rally that took the S&P 500 and Nasdaq 100 to records yesterday, and two Fed officials named AI as a growing driver of inflation ahead of tonight's minutes.

·       Oil rose as Iran stepped up tanker attacks in the Strait of Hormuz and a storm took aim at the US Gulf Coast, even as flows through the strait approach pre-war levels.

·       India's central bank raised rates for the first time in nearly four years and moved to a tightening stance, joining the global wave of rate rises.

·       Japan's real wages rose for an eighth month and a Bank of Japan dissenter backed further rises in stages, keeping December in play.

·       French fiscal risk kept pressure on the euro and French bonds, and the euro held near its weakest since May 2025.

·       Samsung heads into Thursday's results with investors questioning whether the memory-chip boom will last, while SpaceX is in talks to borrow to buy Nvidia chips.

Today's Macro Roadmap: US crude inventories and New York Fed inflation expectations, ahead of the Fed's September minutes at 20:00 CET.

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Below you will find the full article.

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GGMA Markets Briefing: Oil Climbs and Treasuries Slip as Asia Stalls After Wall Street's Records

Asian stocks slipped and Treasuries fell as oil climbed, in contrast to Wall Street's record-setting rally (BBG). The S&P 500 and Nasdaq 100 closed at all-time highs on Tuesday on optimism about technology earnings ahead of next week's US reporting season, and analysts expect third-quarter S&P 500 profits to rise about 25% from a year earlier (BBG). S&P 500 futures rose 0.6% on Tuesday, Nasdaq 100 futures 0.5% and Dow futures 0.5%; this morning US equity-index futures erased earlier gains (BBG), leaving S&P 500 futures little changed at 7,877 and Nasdaq 100 futures at 31,473, while Euro Stoxx 50 futures fell 0.7% to 6,253 and DAX futures 0.6% to 25,468.

In stocks, MSCI's Asia Pacific gauge dropped 0.7% as technology shares in South Korea and Hong Kong turned lower (BBG). Hang Seng futures fell 0.5% to 24,126 and Nikkei futures 0.6% to 70,500, ASX 200 futures were little changed at 8,762 and MSCI emerging-markets futures fell 0.4% to 1,739.3. Samsung Electronics is expected to report its largest-ever quarterly operating profit on Thursday, about 108.5 trillion won, yet its shares remain about 25% below their June peak as investors question whether memory demand and prices can hold into 2027 and 2028 (BBG). Nvidia's market value approached $6 trillion (BBG). Strategists including Arjun Goyal wrote that "low breadth is a classic feature of bubbles building", rank US technology highest on their bubble-risk indicator and recommend call spreads on the Nasdaq 100 tracker (BBG). Bridgewater founder Ray Dalio told a conference in Singapore that AI is a classic bubble nearing its bursting point, as rising rates lift the cost of the debt that funds it (BBG).

Regarding the Fed, Kansas City Fed President Jeff Schmid said the Fed has "some work to do on the short rate" even though higher long-term yields are changing behaviour through the cost of capital and credit, called AI one of the largest drivers of inflation and said the Fed's credibility is at stake (WSJ). San Francisco Fed President Mary Daly told Axios that AI demand looks less like a one-off shock and could outlast the one to three years over which the Fed usually looks through such shocks; she supported September's rise (BBG). New York Fed economists estimate that each percentage point of tariffs lifts consumer goods prices by about a quarter of a percent after a year, and that the tariffs' contribution to goods inflation, 2.9 percentage points at its February peak, is fading towards zero (Newyorkfed).

In Japan, Bank of Japan board member Ayano Sato, who voted against September's rise, told Kyodo she supports adjusting rates in stages with no pre-set pace (Kyodo), and said price risks are skewed to the upside by higher crude prices; people familiar with the Bank's thinking expect a pause in October with hawkish hints for December (Reuters). Prime Minister Sanae Takaichi said she would review public finances if bond yields move unexpectedly and named a consumption-tax cut and cash handouts as the best options (LS).

In India, the Reserve Bank raised its repo rate by 25 basis points to 5.5% in a unanimous vote, its first rise in nearly four years, and changed its stance to calibrated tightening from neutral; it raised its inflation forecast for the fiscal year to 5.2% from 5% and its growth forecast to 7.1% from 6.7% (Reuters). Indian stocks and bonds were lower after the decision (BBG).

In Australia, internal Reserve Bank papers estimate that a permanent 20% fall in AI stocks would cut household consumption by 0.7% in the long run, or 2.4% if it spread to other equities, and put the real neutral rate at 0.4% to 1.2% (BBG). Australian households are less vulnerable to rate rises than their debt loads suggest, macro strategist Lachlan Dynan wrote, because leverage measured against assets is at its lowest since 1997 (BBG).

In Europe, Bank of France Governor Emmanuel Moulin said France is in a "zone of risk" on its deficit and that the situation in bond markets is "complicated" (LS).

Currently, STIR traders price 5 basis points of tightening for the Fed's October meeting, a 22% probability of a rate rise, and 26 basis points cumulatively by December. For the ECB, markets price 3 basis points for the October meeting, a 14% probability, and 23 basis points by December. For the Bank of Japan, markets price 3 basis points for the October meeting, an 11% probability, and 23 basis points by December. For the Bank of England, markets price 23 basis points for the November meeting, a 93% probability of a rate rise, and 33 basis points by December. For the Reserve Bank of Australia, markets price 8 basis points for the November meeting, a 34% probability, and 12 basis points by December.

In currencies, the dollar strengthened against all its Group-of-10 peers (BBG). The dollar index rose 0.3% to 102.09 and the euro fell 0.2% to 1.1231, after touching its weakest since May 2025 on Monday as French fiscal risk spilled into the currency (BBG). The yen weakened 0.2% to 158.38 per dollar, sterling fell 0.2% to 1.3251 and the franc 0.2% to 0.8333 per dollar. The Australian dollar slipped 0.2% to 0.697 and the New Zealand dollar 0.3% to 0.5607, and the rupee eased 0.1% to 96.56 per dollar.

In bonds, Treasuries fell across the curve as oil climbed (BBG). The ten-year yield rose 3.2 basis points to 5.31% and the two-year 1.3 basis points to 4.81%, the 20-year rose 3.1 basis points to 5.73% and the 30-year 2.9 basis points to 5.69%. On Tuesday the ten-year yield had eased more than 2 basis points after reaching its highest since April 2002 on Monday (CNBC). Open interest in ten-year futures has risen in 14 of the last 18 sessions as yields climbed, and strategist David Bieber said positioning remains at "extreme short" levels (BBG). Rupert Harrison, a senior adviser at Pimco, called the yields "screaming good value" (Reuters). Rates strategist Guneet Dhingra warned that scrapping the 20-year bond, which yields more than the 30-year, could be read as panic and push yields higher, ahead of the Treasury's 4 November refunding statement (BBG). French bond futures underperformed German equivalents in Asian trading (BBG), after France's ten-year spread over Germany widened on Friday to its most since 2012 (BBG). In Japan, the ten-year yield eased 0.5 basis point to 3.11% and the two-year rose 1.8 basis points to 1.95%. Australia's ten-year yield rose 1.0 basis point to 5.41%. A Move proxy fell 2.6 points to 102.8. In credit, US leveraged loans trading below 60 cents on the dollar rose to $65bn, the most since March 2020, with technology accounting for 39% of distressed loans, strategists led by Nelson Jantzen said (BBG).

In commodities, Brent rose 0.9% to 101.47 dollars and WTI 0.7% to 90.07 dollars, extending small gains from Tuesday (LS). Iran has stepped up attacks on tankers in the Strait of Hormuz, with UK Maritime Trade Operations reporting nine this month, half of September's total, just as flows approach pre-war levels; the cost of shipping oil from the Gulf to China hit a record $1.3m a day (BBG). US Vice President JD Vance told Reuters that any deal to end the war requires Iran to make a "meaningful" cut to its enrichment capacity, and that Iranian forces can hit some ships but cannot stop energy exports (Reuters). A storm in the Gulf of Mexico is expected to become the first Atlantic hurricane of 2026 by Thursday, on a track east of the main offshore oil and gas fields (BBG), and Chevron said its US Gulf production remains at normal levels after evacuating non-essential staff (LS). President Donald Trump said he is considering suspending the federal gas tax and repeated that oil prices will come down once the war ends (LS). Pakistan and Turkey are supporting Saudi Arabia in a defensive role under their joint defence pact as the kingdom's offensive against the Houthis intensifies (BBG). The International Energy Agency meets today on the G7's release of up to 100 million barrels of diesel and crude (BBG), and natural-resources analyst Nikhil Bhandari expects diesel and jet-fuel cracks to average above $40 a barrel in 2027 because refining capacity is shrinking (CNBC). Gold fell 0.6% to 4,137 dollars, even as China's central bank added to its reserves for a 23rd straight month (LS). Copper fell 0.3%. Bitcoin fell 1.6% to 84,212 dollars and Ethereum 3.0% to 2,617 dollars.

In geopolitics, the Houthis said they attacked Riyadh's King Khalid International Airport with drones and Abha Airport and the Khamis Mushait air base with missiles and drones, without Saudi confirmation, and the Saudi-led coalition said it intercepted a ballistic missile north of Riyadh (LS). The Trump administration is reluctant to expand its support for the Saudi offensive beyond intelligence, targeting and refuelling, and has told Riyadh not to send its own troops into Yemen while the Iran war continues (BBG). Ukrainian President Volodymyr Zelenskiy said intelligence shows Russia is preparing a massive attack (Reuters), Russia said a large-scale strike hit Kyiv and six other regions, and EU envoys are expected to approve a new package of Russia sanctions today (LS).

In corporate news, Elon Musk's SpaceX is in talks to borrow about $40bn, $10bn in bank loans and $30bn in investment-grade debt, to buy Nvidia chips, among the biggest debt financings yet for the AI build-out (BBG). Paramount Skydance closed its $110bn acquisition of Warner Bros. Discovery, and Apple's smart-home push will include a doorbell and a thermostat developed with LG Electronics (BBG). The Dutch government plans to roughly halve its stake in ABN Amro (BBG) (LS), AMD chief executive Lisa Su meets Samsung's chip head in South Korea today, and the US Navy awarded Anduril a submarine contract worth up to $2.9bn (LS).

In other news, this article caught my eye: Inside Bessent's Treasury: tension, turnover and unmet goals (WSJ). Seven Senate-confirmed officials had left the Treasury by the end of August, while the deficit stands above 6% of GDP against Scott Bessent's 3% goal and the ten-year yield sits at two-decade highs despite his expanded buybacks.

Data and the day ahead: Japan's labour cash earnings rose 3.8% y/y in August, above the 3.7% consensus and down from a revised 4.3%, and real wages rose 1.5% y/y, in line with consensus, an eighth straight rise and the longest run of gains in almost a decade (Reuters) (BBG). The Reuters Tankan index for manufacturers rose to +22 in October from +21, its highest since December 2021, while the index for non-manufacturers fell to +23 from +29 (Reuters). China's foreign reserves fell to $3,400bn in September from $3,438bn, below the $3,425bn consensus, and Japan's preliminary leading index rose to 118 in August from a revised 117.6. Still to come: US crude inventories at 16:30 CET are expected to rise by 1.9m barrels after a 922k build, the New York Fed's one-year inflation expectations at 17:00 CET are seen at 3.64% from 3.58%, the Treasury reopens $39bn of ten-year notes at 19:00 CET and the Fed publishes the minutes of its September meeting at 20:00 CET (you can find our preview here). Speakers include the ECB's Cipollone at 07:00 CET and Vujčić at 09:20 and 19:15 CET. Later in the week, Samsung reports preliminary results on Thursday (BBG), the ECB publishes the account of its September meeting on Thursday and Canada's September jobs report is due on Friday.

Time Stamp: 7 October 2026, 07:45 CET