ASIA STOCKS: All Major Markets Down, As Risk Off Grows, Tech Hit Hardest
All the major indices are down in Asia Pac so far today, with tech sensitive plays the worst hit. Japan markets off over 2%, likewise Taiwan, while the South Korean Kospi is down around 3%. Focus remains on the crypto space, where Bitcoin is under 90k, which is fresh lows back to April of this year. Markets will be mindful of deleveraging if we see further downside and spill over to broader risk trends. US equity futures are off, Eminis down close to 0.60%, while Nasdaq futures sit down over 0.750%. Eminis are at levels last seen in mid Oct. The next downside target may be the 100-day EMA near 6586 (we were last around 6654)
- Japan markets are off over 3%, with the NKY 225 testing under 49000. This is an important support area in light of the recent step uptrend. USD/JPY is back under 155.00 amid the risk off mood. Japan is also looking to mend ties with China - via BBG: "Foreign Minister Toshimitsu Motegi told lawmakers on Tuesday that Tokyo has been working on multiple fronts to clarify Takaichi’s remarks, including sending a senior diplomat to Beijing this week. “Our stance is being conveyed clearly at various levels,” Motegi said.
- We also have the meeting later at 3:30pm local time between PM Takaichi and BoJ Governor Ueda.
- In Hong Kong the HSI is off around 1.5%, while the CSI 300 is down a more modest 0.22% at the lunch time break (as is typical for risk off days).
- The Taiex is down over 2%, while the Kospi has fallen by over 3%, continuing its high beta/vol trend of late. This puts the index back under the 4000 level. The other focus point for chip/AI related markets is Nvidia results on Wednesday. Tech is seen as susceptible to further risk off though as this is where we have seen strong outperformance so far in 2025.
- In South East Asia markets are weaker, we are down, but losses are generally more modest, and less than 1% at this stage. In Australia the ASX 200 is down 2%.
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LOOK AHEAD: US Week Ahead Headlined By Delayed CPI Report On Friday
- The September US CPI report will be released on Friday, delayed amidst the government shutdown but with the BLS making a special exception on social security payment considerations.
- Bloomberg consensus looks for headline CPI inflation at a rounded 0.4% M/M after 0.38% back in August and for Y/Y inflation to firm two tenths to 3.1% for what would be its highest since May 2024.
- Core inflation is seen at a rounded 0.3% M/M after 0.35% in August (exceeding the median unrounded estimate of 0.31%) and 0.32% in July. It’s expected to see core CPI inflation hold at 3.1% Y/Y having in August increased to its highest since February.
- Core details should see focus on both goods and services angles: underlying goods inflation has clearly firmed in recent months on tariff pressures although the median increase has currently seen a peak back in June, whilst services will be watched for any spillover after some strong recent non-housing readings.
- The report will come within the FOMC blackout period ahead of the Oct 28-29 decision, with a 25bp cut fully priced and likely needing a large surprise to alter this.
- As for broader inflation details, Fed Chair Powell this week confusingly suggested that we will have the September PPI report but the BLS had previously said “No other releases will be rescheduled or produced until the resumption of regular government services”.
US DATA: Latest Jobless Claims Estimates During The Shutdown
As noted earlier, MNI estimates initial jobless claims at a seasonally adjusted 218k in the week to Oct 11 and continuing claims at a seasonally adjusted 1929k in the week to Oct 4.
- To give a better idea of sensitivity around these estimates, which rely on estimates for some missing states, we note the below analyst estimates:
- Goldman Sachs have a central estimate of 217k for initial claims in a range of 211-225k, whilst they see continuing claims at 1917k in a range of 1885-1930k.
- JPMorgan meanwhile also see 217k for initial claims whilst they see continuing claims as having held constant at 1927k.
NATGAS: Venture Global in Talks with Ukraine for more LNG Deliveries, Reuters
Ukraine is seeking more cargoes from Venture’s Plaquemines facility as the embattled nation approaches the winter heating season, according to Reuters sources
- Venture is in talks with Ukraine’s DTEK to procure more LNG cargoes after a year of gas infrastructure attacks by the Russians.
- Venture Global CEO Michael Sabel met with President Volodymyr Zelenskiy on Thursday October 16.
- DTEK signed an agreement in 2024 for an undisclosed amount of LNG from the facility, as well as 2 mtpa from Calcasieu Pass Phase 2 currently under construction.
- Plaquemines currently has spare capacity to deliver more cargoes to Ukraine on the spot market, per Reuters.
- Plaquemines now sends out the second highest LNG volume in the US, with feedgas demand averaging 3.45 bcf/d according to MNI figures.
