Macro

• Most central bank decisions surprised consensus expectations this week, despite the void over the US situation. Neutral rate views often contributed to the directional news.
• The Fed is encouraged to ease by the lack of evidence not to, stimulating market values further. The UK government is suffering from another likely downgrade to productivity.
• Next week’s calendar is thinned by the possible delay of the US CPI data, leaving the EA as the inflationary highlight. The UK gets a potentially hawkish labour market report.

• As the US retreats from rules-based trade under Trump 2.0, China and ASEAN’s commitment to an upgraded ASEAN-China FTA (ACFTA 3.0) underscores their support for openness.
• While ASEAN’s integration with China has boosted trade and investment, import surges of low-cost products are squeezing ASEAN’s manufacturers and heightening dependence on Chinese capital is raising geopolitical risks.
• ACFTA 3.0 could deepen digital and services linkages, but its economic pay-off for ASEAN hinges on technology transfer, local supply-chain integration, and balanced FDI.

• Iron ore futures rallied as Chinese steel mills restocked post-Golden Week holiday, despite weak margins and persisting trade policy uncertainty.
• Managed money participants expanded net long positions, signalling sustained bullish conviction.
• The 65%-62% spread fell sharply while the 62%-58% spread surged, marking pronounced divergence in grade spreads following the post-holiday sessions. 

• Exports plunge 43% from February peak, hitting mid-year lows  
• Trump tariffs, weak Chinese demand deepen pressure on shipments  
• Thailand players, well-prepared for EUDR, upset over the recent update from the EU 

• IPOs /In Depth: Chinese Firms Face Shifting Global IPO Landscape
• Airlines /In Depth: From Skies to Shackles, HNA Founder Chen Feng Sentenced to 12 Years in Prison
• Holiday /China’s Golden Week Travel Boom Masks Frugality

• The OBR looks likely to trim its productivity trend assumption to 1%, which would still be a bullish break from the current stagnation. Trends rarely break outside recessions.
• High taxes are squeezing the most productive and being transferred to the inactive. It should not be surprising that the UK’s political choices have stalled productivity.
• We see no reason to think the UK will pull off an internationally exceptional jobs-light boom from here. Ongoing stagnation would extend the UK’s rule for fiscal slippage.

• Shift in capital flows and rise of domestic emerging market investors
• Discussion with experts in UAE and Singapore on their experiences and perspectives
• Impact of global events like financial crisis and COVID on emerging markets and expat communities

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• Market sentiment on rate cutting and its impact on the housing market in 2026 is largely optimistic
• Home prices are up two and a half percent through June but have been declining month-over-month
• Housing supply at a national level is back to pre-Covid levels, transitioning to a buyer’s market from a seller’s market with strong mortgage credit but affordability challenges due to higher rates

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• Crude oil futures Thursday were drifting lower with the market looking for direction, although concerns over a supply glut remain the dominant factor.
• Front-month Dec25 ICE Brent futures were trading at $65.01/b (2025 BST) versus Wednesday’s settle of $66.25/b, while Nov25 NYMEX WTI was at $61.31/b against a previous close of $62.55/b.
• Analysts are increasingly moving towards the supply glut scenario, particularly after OPEC+ made its intension clear with a further quota increase for November among the eight members taking part in voluntary cuts.

• Debt / In Depth: The Unfinished Transformation of China’s LGFVs
• Port /: U.S. Details Steep Port Fees on China-Linked Vessels Starting Oct. 14
• Foreign reserves /: China’s Foreign Reserves Edge Higher in September as Global Bonds Rally

• Highlights    • Market shift from premium to mid-tier brands   • Profit vs volume strategy hurting premium brands   • Mid-Tier brands expanding globally There is a lot of uncertainty around the ongoing tire demand and supply situation.
• The first thing to note is that while demand is growing slightly, the distribution of sales between premium tire makers and less well-known brands is changing.
• The transfer of market share away from the premium tire makers is rapid and appears to be accelerating.

• Japan’s new leadership under Takaichi promises more fiscal stimulus and low rates, risking higher inflation and political instability.

• Thailand faces economic concerns like weak consumer confidence and high debt, with uncertain monetary policy.

• Vietnam’s economy is booming with 8.2% GDP growth in Q3, though risks from US exports and transshipment could threaten stability.

• Centre releases Rs.10.9 bln as 1st installment of untied grants for RLBs in 2 states
• FICCI survey shows strong manufacturing growth in Q2 FY 26
• India likely to have surplus sugar production in sugar season 2025-26

• BSP cut rates 25bp to 4.75% surprising market expectations for a pause, citing a weakened growth outlook from infrastructure governance concerns.
• Benign inflation at 1.7%, well below the 2-4% target, provides scope for accommodation despite electricity and rice tariff upside risks.
• Further easing is likely in December as BSP signals the policy “sweet spot” is lower than expected amid persistent growth headwinds.

• The Democrats opted for a US government shutdown despite the Administration being well prepared for what it sees as an opportunity to promote its longer-term agenda.
• While they hold out, the president’s ‘grim reaper’, OMB Director Russell Vought, will have a free hand to cut the size of government and pursue his unitary executive vision.
• Some of his actions will undoubtedly be challenged in the courts, but the signs are that the Supreme Court will continue to side firmly with the Administration.

• Southbound net buying jumped sharply to US$24.2bn in September. This was the highest ever. So was the average daily trading volume of US$20.3bn. Alibaba constituted 40% of total net buying.
• Tencent, SMIC, Meituan were bought heavily, while Xiaomi and Pop Mart continue to be sold. Investors are likely avoiding the sectors with disorderly price wars and stocks with super-premium valuations.
• In H2’25, the biotech companies, Innovent Biologics, XTALPI and Akeso are Southbound investors’ favorites. The buying momentum could continue here as long as the tailwind of frequent licensing deals lasts.

• BOT holds rate at 1.50% in a 5-2 vote, surprising 70% of economists who expected a 25bp cut, citing limited policy space and timing concerns amid economic uncertainty.
• Economy faces 2H25-2026 slowdown from US tariff impacts, with exports declining and GDP growth revised to 2.2% (2025) and 1.6% (2026) despite a front-loaded boost.
• Credit contraction continues affecting vulnerable SMEs while inflation at -0.72% remains below target, but the dovish new governor signals potential future easing.

• How have our major investment themes performed so far in 2025?
• Review of the performance of the major markets and asset classes we focus on
• We revisit our outlook for each of those asset classes for Q4 25

• Visa / China to Launch New Visa to Lure Young Tech Talent Amid U.S. Curbs
• Wahaha /Exclusive: Wahaha Heiress’s Confidant Investigated for Disciplinary Violations

• China-India /: India and China to Resume Direct Flights After Five-Year Suspension

• The RBNZ cut its OCR by 50bps to 2.5%, beyond the 25bp consensus, with unanimous committee support signalling a more aggressive stance than August’s split vote.
• Inflation is forecast at 3% in Q3 but returns to 2% midpoint by H1 2026 due to spare capacity, providing scope for further easing.
• The Committee remains open to additional cuts with the November meeting live, as terminal rate expectations fall below the previous neutral 3% estimate.

• Crude oil futures were trading at one-week highs Wednesday with Q4 balances under scrutiny, holding on to gains even after US crude stocks were seen higher for a second week.
• Front-month Dec25 ICE Brent futures were trading at $66.15/b (2038 BST) versus Tuesday’s settle of $65.45/b, while Nov25 NYMEX WTI was at $62.43/b against a previous close of $61.73/b.
• The more upbeat tone prevailed even after US crude stocks were seen 3.72 million barrels higher, buoyed by more imports.

• The US government shutdown causes vital economic data to go dark, leaving the Fed facing market pressure to blindly cut rates as priced, creating risks of policy error.
• Both parties see strategic value in prolonging the shutdown, risking disruption that lasts well beyond historical norms. But levels will rebound when it inevitably ends.
• In the interim, private surveys signal weakness, and this picture is unlikely to improve significantly enough to block cuts in 2025, but that won’t drive more Fed cuts in 2026.

• SGX iEdge has launched the SGX iEdge Singapore Next 50 indices to track the 50 largest and most liquid SGX Mainboard companies beyond the 30 companies featured in the Straits Times Index (STI). 

• The Next 50 index has the highest weighting in the Real Estate sector, comprising ~47% of the index by weight. Other meaningful sectors are Financials, Industrials, and Consumer.

• By utilizing the new index in conjunction with the Straits Times Index (STI), investors and asset managers can more effectively construct tactical asset allocation strategies that aim to enhance portfolio performance.

• The Gaza conflict introduces a geopolitical risk premium to Brent crude prices, counteracting bearish market fundamentals driven by oversupply and downward demand revisions.
• Immediate price movements, such as this summer following an escalation of conflict, demonstrate the market’s sensitivity to regional tensions and the integration of a risk premium.
• Ongoing indirect negotiations for a Gaza ceasefire and hostage release represent a potential turning point; a comprehensive resolution could diminish the geopolitical premium, allowing crude prices to adjust lower.

• U.S. tire shipments projected at a record 340.2 million units in 2025  
•  Dynamics shift, with Chinese tire imports falling and SE Asian imports rising  
• Top players pursue expansion, innovation, and portfolio revamp  

• Asia’s base oils price-premiums to gasoil recover amid lower crude oil prices.
• Firmer margins, and signs of crude prices mostly holding in lower range, curb pressure on refiners to adjust base oils output.
• Rise in Asia’s base oils supply coincides with more muted demand in China and southeast Asia and more complicated arbitrage to move heavy grades to India.

• Crude oil futures Tuesday were largely consolidating early-week gains after OPEC+ agreed to a production increase at the low end of expectations, although markets continued to face mixed signals.
• Front-month Dec25 ICE Brent futures were trading at $65.68/b (2006 BST) versus Monday’s settle of $65.47/b, while Nov25 NYMEX WTI was at $61.96/b against a previous close of $61.69/b.
• The producer group said on Sunday it would raise quotas by 137,000 bpd in November, a move SocGen described as “a sign that markets priced in an expectation of a greater hike and, perhaps more importantly, a growing consensus that spare capacity is quite limited.”

• Global Group I brightstock prices stay unusually high relative to other grades.
• Brightstock price-strength helps to cushion impact of lower prices for lighter-grade base oils, supporting firm Group I base oils margins in markets like Europe.
• Firm Group I base oil margins incentivize refiners to maintain high output.

• US Group II base oils prices edge up versus vacuum gasoil (VGO) as crude prices correct lower.
• Firm, rangebound base oils margins sustain incentive for refiners to maintain high output.
• High output in Oct 2025 would help to cushion impact of scheduled plant-maintenance.

• Asia’s base oils demand could ease amid expectations that supply is likely to rise from already-healthy levels.
• Signs of healthy inventory levels in China and southeast Asia curb further any urgency to buy.
• Reversal of crude oil prices back to their medium-term range erodes further any pressure on prices to rise in response to squeezed margins.

• US base oils demand likely to stay muted.
• Buyers could cover more of any seasonal pick-up in demand at start of Q4 with unused stocks.
• Lack of weather-related supply disruptions in recent months likely leaves those stocks at higher-than-expected levels.

• Hawkish inflation and policy rate pricing shifts toward our UK/EA view did not stop US rates frontloading more cuts.
• We still see markets overpricing easing, with UK inflation expectations stuck above target, and neutral rates high.
• A break in activity data, especially unemployment, and underlying price/wage inflation, would threaten our view.

• Recent data has shown better-than-expected growth globally, leading to a shift in the macro landscape.
• The US economy has shown signs of weakness, particularly in the labor market, but overall growth forecasts have been revised upwards.
• Emerging markets have maintained a positive bias, with inflows steadily coming in, but there are concerns about potential vulnerability in EM currencies and local rates markets if the US growth environment remains strong.

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• Newly-Appointed Fed Governor Miran has shifted his attention of monetary policy conduct away from data dependency towards r*, the neutral real policy rate. Data-dependent policy has been detrimental to credibility. 
• Governor Miran believes r* will fall due to the impact of President Trump’s policies on inflation, including lower immigration and lighter business regulation, as well as lower structural budget deficits.
• Stronger-Than-Expected economic data has resulted in some Federal Reserve Bank Presidents cautioning against continued near-term policy easing, citing lingering inflation concerns. Chairman Powell wants policy easing twice more in 2025.

• China holding large soybean inventories and US soybean exports to China at zero for the 2025-26 marketing year
• President Trump late in addressing trade issues with China, leaving US farmers and exporters struggling to recapture market share
• US seeing strong exports of corn and wheat due to competitive prices, with potential exemptions for certain agri products from tariff rates in trade deals

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• After the remarkable bull market in frozen orange juice concentrate futures (OJ) between 2022 and 2024, the market topped out during the early days of 2025.
• Since then, the market corrected 60% from its highs. But for the most part of 2025 the market is actually in a consolidation phase.
• From a chart perspective, the market offers now an interesting setup

• China and the U.S. are discussing the a potential trillion dollar investment from China to help “Make America Great Again.” China is setting its terms for the investment.
• China hawks in the Administration have had their wings clipped, while many Congressional hawks remain vocal as Trump drops barriers to technology exports to China.
• In a sign of U.S. trade policy failure, tariffs on China have not reduced the U.S. trade deficit nor have they had any meaningful impact on China’s exports or economy.

• Crude oil futures opened the week higher after OPEC+ over the weekend announced a relatively modest output increase for November, coming in at the low end of expectations.
• Front-month Dec25 ICE Brent futures were trading at $65.47/b (2011 BST) versus Friday’s settle of $64.53/b, while Nov25 NYMEX WTI was at $61.68/b against a previous close of $60.88/b.
• The production group agreed to add 137,000 bpd to quotas in November, citing “steady global economic outlook and current healthy market fundamentals” for what is now an eighth consecutive monthly rise.

• Strong economic data last week: New home sales above expectations, GDP growth revised up to 3.8%
• Discussion on the accuracy of economic estimates and its impact on investment decisions
• Economic data suggesting fewer Fed cuts, affecting short term stock market sentiment

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• Miran’s appointment as Fed Governor represents a skilful attempt by the Trump Administration to influence Fed policy
• His first speech betrays his propensity to pivot from a data-based approach to monetary policy to a politically based less flexible and doctrinal view.
• If President Trump gets his way and takes over the Fed, the market can look forward to a dogmatic and doctrinally driven Federal Reserve.

• While elevated valuations and excess equity allocations pose risks to long-term returns, we see no signs of an imminent U.S. equity market top.
• The intermediate bull case is supported by both price and fundamental momentum.
• However, the advance is extended and stock prices could correct at any time.

• Crude oil futures steadied Friday after four consecutive losses left prices sharply lower on the week, coming ahead of Sunday’s keenly anticipated online OPEC+ meeting.
• Front-month Dec25 ICE Brent futures were trading at $64.42/b (2005 BST) versus Thursday’s settle of $64.11/b, while Nov25 NYMEX WTI was at $60.73/b against a previous close of $60.48/b.
• Benchmarks had traded higher earlier in the day before losing steam in late trading.

• How have our major investment themes performed so far in 2025?
• Review of the performance of the major markets and asset classes we focus on
• We revisit our outlook for each of those asset classes for Q4 25

• Investors are under-appreciating a sharp narrowing of the US current account deficit in 2Q25. This is a sustainable trend as net government borrowing normalises to around 5% of GDP
• The US is not losing its ability to attract long term capital flows. In 2Q25, net foreign direct investment reached $121b, the strongest since 3Q22
• The result is a sharp improvement in the basic balance. Investors should monitor this indicator to assess whether Trump’s policy mix of fiscal consolidation and re-shoring is succeeding or not

• While political and economic factors have left the sector relatively unscathed by Trump’s protectionism, new policy measures threaten trade in a sector where the U.S is a net exporter. 
• The proposed HIRE Act would add a 25% surcharge on outsourcing payments. While it faces legislative delays and dilutions, it nonetheless represents a latent threat to the sector. 
• India and the Philippines stand out as being most exposed due to their reliance on American IT and BPO demand. The H-1B visa changes will also hit remittances into India.

• Negative steel mill margins will likely result in production cuts that could adversely impact the near-term demand for iron ore. 
• Beijing’s stricter stance on BHP and Simandou’s safety-related suspension are altering the iron ore power dynamics and tightening supply.
• Bearish MA crossover and weakening MACD signal fading momentum, with prices below key MAs, pointing to increasing downside pressure.

• China has skillfully used its position as a supplier of rare earths and a customer of soybeans to create leverage in trade negotiations with the U.S.
• China has not purchased any soybeans from the U.S. for the first time since the 1990’s, creating a financial squeeze on mid-western farmers.
• President Trump announced he would use some of the money collected from tariffs to bail out the farmers hurt in the U.S. trade war.

• India on course to become 3rd largest economy, says N K Singh
• Forex reserves fall by USD 2.3 billion during week ended 26 September 2025
• UPI transactions volume dips 1.9% m-o-m in Sept 20 25

• The US government shutdown removes the potential for official statistics to damp dovish concern, raising the likelihood of October’s cut, especially with other weak data.
• EA unemployment’s rise reflected rounding rather than substance. UK national accounts revealed healthy balance sheets, aside from the government, and bullish lending stats.
• Next week’s calendar stays thin with US releases suspended and Europe’s cycle focusing on the following week. The RBNZ, BoT, BSP and Peru announce rates next week.

• July exports rebound, second-best month of 2025  
• Seven-month exports slip on weaker tire and tube demand  
• Five-year car import ban lifted, boosting rubber outlook  

• Australian economy remains sluggish, but some positives include recovery in small caps and resilience of Australian consumers
• Market volatility and narrow leadership driving unhappiness among active investors
• Resilience of Aussie consumer and strong retail results stood out in recent reporting season, with small caps and US housing exposure also notable themes

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• US monetary policy is accommodative and markets are buoyant, especially in commodities
• Investors need to be cautious about being overly bullish in current environment
• Similarities seen with 2006-2007 period, particularly in disruptions in copper supply and new technologies in metal recovery; investors should be wary of hype and potential risks involved

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• A surprise rise in EA unemployment reflects rounding rather than alarming weakness, with labour supply and demand still surging. Finland’s woes are more idiosyncratic.
• Supply has trended much faster post-pandemic, sustaining demand at its old trend without extreme capacity constraints. Migration has more than accounted for the rise.
• Ukrainians are dominating the flow and complicating the read through to disinflationary spare capacity. Wage growth is an even more critical signal when supply is uncertain.

• The US shutdown remains political theatre, with no real progress on deficit reduction or fiscal reform.

• Thailand’s baht is Asia’s strongest currency, but structural issues and weak growth outlook persist despite strong external balances.

• Regional PMIs show a mixed picture, with Thailand surprisingly strong, Taiwan weak, and India continuing to lead.

• Crude oil futures were sliding lower Thursday as benchmarks racked up a fourth consecutive retreat of the week, coming amid expectations of a further OPEC+ hike offsetting heightened geopolitical tensions.
• Front-month Dec25 ICE Brent futures were trading at $64.16/b (2035 BST) versus Wednesday’s settle of $65.35/b, while Nov25 NYMEX WTI was at $60.57/b against a previous close of $61.78/b.
• Briefings from OPEC+ delegates over the last few days have wiped out the previous week’s healthy gains, with the group now expected to bring back a second tranche of voluntary cuts at a quicker-than-expected pace.

• Inflation’s break above target to 2.23%, within 1bp of our forecast, came as past energy price falls dropped out to reveal the more resilient underlying pressures.
• Small upside surprises in large countries, like Germany and Italy, were balanced in number and contribution by larger surprises in small ones, like Greece and Estonia.
• We expect less negative payback in October and January, preventing our profile from languishing below the target through 2026, like the consensus view does.

• Hong Kong Alpha portfolio gained 8.45% in September and 60.89% and 62.80% YTD and since launch one year ago.  The portfolio has outperformed Hong Kong indexes by more than 40%.
• The portfolio has a Sharpe ratio of 3.23 YTD and has generated more than 40% of its returns from stock-picking (alpha).  Its beta is low at only 1.17.
• At the end of September, we increased exposure to AI and robotics and sold positions in the consumer and finance sectors.

• The central bank held rates at 9.25% in a 4-3 split vote, matching consensus expectations but extending the pause cycle to four months amid 5.1% inflation.
• Slower inflation convergence toward 3% target drives caution as service prices remain sticky and analyst expectations rise to 5% for 2025.
• Fiscal deficit widening to 7.1% of GDP and rule suspension through 2027 limits monetary policy flexibility and prolongs the restrictive stance.

• Bankers Optimistic on Loan Demand and Terms: RBI Lending Survey
• Capacity utilisation declines to 74.1% in Q1FY26: RBI OBICUS survey
• New project announcements fall to Rs.5.2 trillion in September 2025 quarter

• Quantum Commodity Intelligence – Crude oil futures were drifting lower Wednesday, extending the heavy losses in the early part of the week amid growing concerns that markets could face a significant supply glut in Q4.
• Front-month Dec25 ICE Brent  futures were trading at  $65.54/b (2000 BST) versus Tuesday’s settle of $66.03/b, while Nov25 NYMEX WTI  was at  $61.97/b against a previous close of $62.37/b.
• Benchmarks came under pressure after Bloomberg reported on Tuesday that OPEC+ is considering an accelerated schedule on unwinding a second tranche of production cuts, which could fast-track the return of around 1.5 million bpd in just three months.

• The RBI held its repo rate at 5.5%, unanimously keeping a neutral stance as the committee assesses the impact of prior cuts amid an improved inflation outlook.
• Inflation projections were slashed to 2.6% from 3.1%, driven by GST reforms and benign food prices, creating policy space despite growth risks from 50% US tariffs.
• Domestic demand raised the growth forecast to 6.8%, but H2 FY26 faces headwinds from trade tensions. The MPC adopts a wait-and-see approach before its next move.

• It is imperative to closely monitor the China economy in the current environment
• My China Monthly Alternative Growth (CMAG) gauge provides a timely assessment of the aggregate economy
• The CMAG is currently tracking below average in August, all else equal, with early indications of additional sogginess going forward