Trump lays into UN agenda, gets tough on Russia

Asia Market Update: Trump lays into UN agenda, gets tough on Russia; KR/AU equities under-perform as HK/CN recover led by tech, BABA +7%,.

General trend and developments

- Pres Trump said a number of remarkable things in his one-hour long speech to the UN General Assembly on Tuesday. Heavily criticized the UN itself as ineffectual, called climate change “the greatest con job ever perpetrated on the world” and windmills a waste of money and ineffective; Pushed back on nations that have recognized Palestine as a state; Tells countries (singling out Europe) that ‘they are going to hell’ over uncontrolled immigration.

- Not long after his address Trump then posted via social media perhaps his biggest statement of the day, delivering a U-turn on Russia by saying that his relationship with Putin “meant nothing, unfortunately”, and he now supports Europe to “step it up” against Russia to see if Ukraine can take back all lost land, with full support of the US, EU and NATO.

- Australia PM Albanese appears to finally have gotten his long-wished for face-to-face meeting with Pres Trump, to be in Washington DC on October 20th.

- Hong Kong and China stocks bounced back, led by tech with Alibaba +7% (highest in nearly 4 years) as the CEO vowed to increase AI infrastructure investment and released latest LLM QWEN3-MAX. China CSI All Share Semiconductors Index higher by >2.0% [highest level since 2021]. Followed Micron giving positive outlook in its Q4 earnings after the US close.

- Came as Australian and Korean equities under-performed -1%.

- Japan September PMI Manufacturing stayed in contraction for the third month, with the downturn in manufacturing production gathering pace as factories reporting the quickest reduction in output since March amid reports of subdued sales and cautious inventory policies.

- Australia August CPI hotter than expected, with highest annual inflation rate since July 2024. Housing +4.5% Food +3.0%, Alcohol and tobacco +6%. Aussie dollar rose +0.4% back to last week’s levels and 3-year yields +8bps post-data.

- New Zealand appointed Sweden Riksbank's First Dep Gov Anna Breman as the new RBNZ Gov from Dec 1st, 2025 for a term of five years.

- Thai exports in August rose at the slowest pace in 11 months, but against the trend for Asia recently, US-bound exports actually rose +12.8% y/y. [However, authorities warned that US tariff impact will intensify from Sept].

- Democrat Adelita Grijalva wins US House election in Arizona, narrowing GOP majority to 219-214
** China Trade Note: Poland blocking China’s trade into Europe for 2 weeks highlights a larger risk for China: The recent announcement of China's Fujian province launching its first Arctic shipping route to Europe faces severe logistical challenges. However, it is a direct reaction to Poland closing its land border with Belarus following the recent drone incursion into Poland during joint Belarus-Russia military exercises. Three of the five train routes used for shipping goods from China to Europe pass through Poland, and the other two routes through Turkey only handle 10% of China-Europe rail freight. China immediately fell into a supply chain squeeze for goods into Europe. However, Poland has agreed to reopen its borders by Thurs Sept 25th. Fujian’s new Arctic service is feasible at this time being the end of summer when ice cover is minimal, but for a year-round navigation plan to be operational by 2030 will require new, specialized vessels including Russian nuclear icebreakers. Even with icebreakers the variability of Arctic ice levels will make it difficult to bulk ship “just-in-time”. The two-week trade blockade by Poland has perhaps demonstrated to Beijing the fragility of its trade into Europe and exposes its ongoing support of the Russia-Ukraine war more effectively than any diplomacy over the past three and a half years.

- Reminder that Japan MOF will hold its dealer meeting later today, with bond traders wondering if further long-dated issuance will be cut.

- US equity FUTs +0.1% during Asian trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

- Wed 24th (Wed eve DE Sept Ifo Business Climate).

- Thu 25th JP BOJ Minutes, JP 40-yr JGBs, (Thu night US Aug Durable Goods, Final Q2 GDP. US Aug Home Sales).

- Fri 26th JP Tokyo CPI, JP BOJ Noguchi, (Fri night US Aug Core PCE).

Holidays in Asia this week

- Tue 23rd Japan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.4% at 8,813.

- AUSTRALIA AUG CPI Y/Y: 3.0% V 2.9%E.

- Australia Treasurer Chalmers: Looking at new ways to cut red tape in tax system - press conference.

- Australia sells A$1.0B vs. A$1.0B indicated in 3.00% Nov 2033 bonds: Avg Yield: 4.0912% v 4.0742% prior; bid-to-cover 3.21x v 3298x prior.

- New Zealand Fin Min Willis: Appoints Sweden Riksbank's Anna Breman as new RBNZ Gov from Dec 1st, 2025 for a term of five years - announcement regarding RBNZ.

China/Hong Kong

- Hang Seng opens -0.3% at 26,073; Shanghai Composite opens -0.5% at 3,804.

-China plans to regulate food delivery platform services, according to draft rules related to platform fees and promotions - Chinese media.

- China Commerce Ministry (MOFCOM) official Han: Confirms will not seek preferential treatment at the WTO.

- China's COMAC aircraft maker said to be 'slashing' delivery targets for its C919 jet - financial press.

- China to deepen mineral collaboration with Saudi Arabia - China official
China NEA: to crack down on competition in solar sector; To push for orderly upgrades of aging power plants.

- Follow up: China said to tighten livestream rules for social media - financial press.

- 'White List' project loans in China said to help in the delivery of 20M homes - Chinese press.

- Shanghai Securities News notes the growth of quantitative funds in China, driving 20% of market trades; multi-strategy .products are seeing 'strong' demand; quant fund registrations +100% y/y to >3.5K during the first 8 months of 2025

- China Foreign Min Wang Yi: Taiwan issue is China's internal affair - comments at meeting with US House of Representatives delegation [overnight update].

- China reportedly courts foreign gold reserves in bid to boost global clout – press [overnight update].

- China NEA Aug Power Consumption Y/Y: +5.0% v 8.6% prior [overnight update].

- China PBOC sets Yuan reference rate: 7.1077 v 7.1057 prior.

- China PBOC Open Market Operation (OMO): Injects CNY402B in 7-day reverse repos; Net drains CNY17B v drains CNY11B prior.

Japan

- Nikkei 225 opens +0.1% at 45,517.

- *(JP) JAPAN SEPT PRELIMINARY PMI MANUFACTURING: 48.4 V 49.7 PRIOR (3rd month of contraction).

- Japan BOJ Aug Core CPI Y/Y: 2.0% v 2.0% prior (comes ahead of Tokyo CPI for Sept on Fri).

- Japan PM Contender Takaichi: JGB market is stable as mostly held domestically - financial press..

- Japan PM Contender Koizumi: Aiming for ¥1M wage rise based on BOJ's 2% price goal.

- BOJ Outright Bond Purchase Operation for 1~3 Years; 3~5 Years; 5~10 Years; 10~25 Years; (Leaves purchase amounts unchanged).

Korea

- Kospi opens +0.2% at 3,492.

- South Korea Sept Consumer Confidence: 110.1 v 111.4 prior.

- South Korea Aug Retail Sales Y/Y: 3.7% v 9.1% prior.

-South Korea Presidential Advisor: Expects progress on US tariff talks and other pending issues with US during APEC period - South Korea press.

- South Korea Finance Min plans to meet with US Treasury Sec Bessent in New York [timing uncertain] - South Korea press.

- South Korea Drug Watchdog: To ask the relevant companies to submit opinions and documents on US claims related to TYLENOL.

Other Asia

- India Steel Sec Poundrik: India to decide final 'safeguard duty' on steel prior to Nov 1st - financial press.

- Vietnam PM: To continue trade talks with the US and sign new free trade deals.

- Sri Lanka Central Bank (CBSL) leaves Overnight Policy Rate unchanged at 7.75%; as expected.

- TAIWAN AUG EXPORT ORDERS Y/Y: 19.5% V 12.8%E [overnight update].

North America

- US) Democrat Adelita Grijalva wins US House election in Arizona, narrowing GOP majority to 219-214.

- (AR) Follow Up: IDB said to be prepared to 'up' Argentina financial operations 'significantly', could end 2025 with approved operations worth $4.0B.

- (CA) Canada PM Carney: Had an 'open' discussion with China Premier with steel tariffs.

- (US) Weekly API Crude Oil Inventories: -3.8M v -3.4M prior.

- (US) Q2 CURRENT ACCOUNT BALANCE: -$251.3B V -$256.6BE.

- (US) Fed's Goolsbee (voter): Data shows low hiring and low firing labor market - CNBC.

- (US) Sept Philadelphia Fed Non-Manufacturing Activity: -12.3 v -17.5 prior; Prices Paid: 38.8 v 43.2 prior; New Orders: 0.5 v 21.5 prior.

- (US) Fed's Bowman (voter): Supported 25bps cut, important that Fed now actively supports job market - speech text.

- (US) SEPT PRELIMINARY S&P MANUFACTURING PMI: 52.0 V 52.2E (2nd month of expansion): Number of companies able to hike selling prices to pass these costs on to customers has fallen.

- (US) Pres. Trump: Rejects meeting with "Minority Radical Left Democrats", citing unserious demands for over $1 trillion in new spending.

- (US) SEPT RICHMOND FED MANUFACTURING INDEX: -17 V -5E; Volume of new orders: -15 v -6 prior; Number of employees: -15 v -11 prior.

- (US) Fed's Bostic (non-voter for 2025 & 2026): Would be open to using inflation target range; Could support inflation target range of 1.75-2.25% at some point down the road - comments on podcast.

- (US) TREASURY $69B 2-YEAR NOTE AUCTION DRAWS 3.571% V 3.641% PRIOR; BID-TO-COVER RATIO: 2.51 V 2.69 PRIOR AND 2.62 OVER THE LAST 12 AUCTIONS.

- (US) Fed Chair Powell: One-time price increases likely to be felt over several quarters; Recent price increases largely reflect tariffs; Reiterates that rate cut was another step towards neutral stance - speech text.

- (US) Fed Chair Powell: Equity prices are fairly highly valued; We're not targeting prices for financial assets - Q&A responses

- (RU) US Pres Trump: NATO countries should shoot down Russian aircraft in their airspace; We'll know about Russia Pres Putin in a month; Think Hungary PM Orban will stop buying Russian oil.

- (US) Pres. Trump: After getting to know and fully understand the Ukraine/Russia Military and Economic situation and, after seeing the Economic trouble it is causing Russia, I think Ukraine, with the support of the European Union, is in a position to fight and WIN all of Ukraine back in its original form.

- (CA) Bank of Canada (BOC) Gov Macklem: For many investors, question now is whether US dominance in financial flows will ebb; Increasing purchases of US govt debt by hedge funds is increasing leverage at financial system's core - speech text.

Europe

- (UK) PIMCO's Balls: UK economy will not be an outlier on inflation - FT.

- (SE) Sweden Central Bank (Riksbank): First Dep Gov Anna Breman to leave Riksbank on Oct 10th (Fri); To become Gov of RBNZ from Dec 1st, 2025.

- US Sec of State Rubio to meet Russia Foreign Min Lavrov at 12pm ET in NYC.

- (UK) SEPT CBI INDUSTRIAL TRENDS TOTAL ORDERS: -27 V -30E.

- (PT) Bank of Portugal Gov nominee (OECD chief economist) Pereira: Tariffs haven't fully fed through to inflation yet; More goods price inflation yet to come - TV interview.

- (US) Sec of State Rubio: Will work with allies to defend every inch of NATO.

- (HU) HUNGARY CENTRAL BANK (MNB) LEAVES BASE RATE UNCHANGED AT 6.50%; AS EXPECTED.

- (UR) Ukraine Pres Zelenskiy: Will speak to US Pres Trump about battlefield and security guarantees; Have good news on battlefield; Want to discuss how to keep Europeans from buying Russian oil & gas.

- (RU) European Commission Pres Von der Leyen: We want to stop Russia oil purchases by the end of the year; Want to end Russian energy flows to Europe by 2027.

Levels as of 01:20 ET

- Nikkei 225 +0.1%, ASX 200 -1.1%, Hang Seng +0.8%; Shanghai Composite +0.4%; Kospi -0.3%.

- Equity S&P500 Futures -+.1%; Nasdaq100 +0.1%; DAX -0.3%; FTSE100 +0.1%.

- EUR 1.1795-1.1820; JPY 147.47-147.96; AUD 0.6589-0.6624; NZD 0.5850-5866.

- Gold -0.3% at $3,805/oz; BTC -0.3% at $112,600; Crude Oil +0.2% at $63.53/bbl; Copper flat at $4.6410/lb.