Crude oil prices holding above USD 100 per barrel further enhanced palm oil’s attractiveness as a biodiesel feedstock. In India, the world’s largest palm oil importer, August arrivals rose 7% month-on-month to 782,761 tonnes, the highest level since February, as refiners rebuilt inventories ahead of the peak festival season from August through November.

Meanwhile, Malaysia raised its October crude palm oil reference price, maintaining the export duty at 10%. Still, weaker export performance capped further gains, with cargo surveyors estimating that shipments in the first half of September fell by 17.8%–25.6% compared with the same period in August.

Even so, downside pressure is capped by relatively tight supply conditions. Lower mine output and production disruptions have constrained the availability of concentrates. Smelter treatment charges have dropped sharply into negative territory, underscoring the scarcity of feedstock for refiners. At the same time, LME zinc inventories remain low by historical standards, and physical zinc availability outside China is particularly tight.

Fed Chair Kevin Warsh reiterated that inflation remains elevated, a concern underscored by data released last week showing that core US inflation in August rose more than anticipated. Beyond inflation pressures driven by surging energy prices, Warsh noted that Treasuries are also under pressure as they compete for investor capital with an expanding supply of corporate debt.

Meanwhile, President Donald took to social media to call for rapid rate cuts to 1% or lower, although he stopped short of directly criticizing Warsh.

Mixed August economic data from China, Indonesia’s key trading partner, also fueled expectations of additional stimulus measures from Beijing. However, the advance was capped by mounting inflation concerns driven by higher oil prices and looming El Niño-related risks. Investor caution was further reinforced ahead of next week’s Bank Indonesia policy meeting, amid renewed pressure on the rupiah and signs of foreign capital outflows.

Despite these headwinds, all major sectors moved higher, led by energy, transportation, and cyclical stocks. Early notable gainers included Merdeka Battery Materials (up 3.0%), Indika Energy (2.6%), Indosat Tbk. (1.7%), and Bank Mandiri (1.2%).

The Bank of Japan is also expected to increase borrowing costs on Friday, with another rate hike anticipated by the end of January. On the geopolitical front, oil prices eased amid optimism that Saudi Arabia will be able to restore energy flows through its East–West pipeline.

Earlier this month, the yen had risen to a seven-month high, supported by expectations of more aggressive policy tightening by the BOJ, recent joint currency interventions by Tokyo and Washington, and the prospect of greater capital repatriation by Japanese investors.

Although the upcoming meetings are expected to help stabilize relations between the world’s two largest economies, investors remained wary amid persistent uncertainty over tariffs, sanctions, and broader geopolitical risks, including tensions involving Taiwan and the Middle East.

On the corporate front, BYD slipped 0.6% following reports that Chinese authorities may include the automaker in Xi Jinping’s business delegation for his summit with Trump. Energy shares were also among the leading decliners, with PetroChina down 1.9% and CNOOC losing 2.9%.

At the same time, robust demand from Asia and other importing regions is expected to heighten competition for LNG cargoes once colder weather arrives. Investors are also closely monitoring Germany’s gas procurement strategy; any increase in German buying could add further upward pressure to prices in an already tight global market.

In tandem with the Fed’s decision, the Hong Kong Monetary Authority lifted its base rate by 25 basis points to 4.25%. CICC noted that while renewed US monetary tightening could increase volatility in Hong Kong stocks, the impact is likely to be short-lived unless the Fed embarks on a sustained cycle of rate hikes.

Softer oil prices provided some offset to the cautious mood, as Saudi Arabia took steps to restore capacity at damaged pipelines.

Among major movers, Tencent (-1.4%), AIA (-0.6%) and Xiaomi (-1.2%) declined, while Z.AI Co. (+4.2%), Kingboard Laminates (+4.9%) and Lenovo (+1.9%) advanced.

At the same time, oil prices retreated as worries over supply disruptions in the Middle East moderated, with Saudi Arabia expected to restore pipeline capacity within days. Even so, crude remains above $100 a barrel, keeping inflation risks firmly in focus.

On the supply side, platinum remains structurally constrained. The World Platinum Investment Council (WPIC) expects market deficits to average 331,000 ounces annually over 2026–2030, despite projecting a moderate surplus in 2026. Industrial demand also provides support, driven by uses in emissions control, hydrogen technologies, and certain emerging AI-related applications. Nonetheless, the longer-term shift toward battery electric vehicles (BEVs) represents a structural headwind for autocatalyst demand.

The move widened the interest rate gap between the US and South Korea to as much as 1 percentage point. However, Korean authorities indicated that the market impact should be limited, noting that the decision had already been reflected in asset prices.

Sentiment was further supported by easing oil prices after the US announced that Saudi Arabia’s damaged East–West pipeline could resume operations within days, tempering inflation worries that had intensified with the recent surge in crude. Meanwhile, the stabilization of global AI and semiconductor stocks helped boost domestic technology names following recent pullbacks, with Samsung Electronics and SK hynix both edging higher.

Other notable gainers included KB Financial Group (up 2.0%), Doosan Enerbility (2.3%), Hanwha Aerospace (2.9%), and HD Hyundai Heavy Industries (6.9%).

As expected, the FOMC voted unanimously to raise the federal funds rate by 25 basis points to a target range of 3.75%–4.00%. Fed Chair Kevin Warsh stressed that inflation remains unacceptably high, reinforcing expectations of additional rate hikes. Supporting that view, data released last week showed that core US inflation for August rose more than anticipated.

In contrast, President Donald used a social media post to urge a rapid cut in interest rates to 1% or below, although he stopped short of directly criticizing Warsh.

Elsewhere, the Bank of England is widely expected to leave interest rates unchanged at its meeting today, while the Bank of Japan is scheduled to raise rates on Friday.

On the geopolitical front, oil prices eased amid optimism that Saudi Arabia will be able to restore energy flows through its East–West pipeline, alleviating some concerns over supply disruptions.

The August figure marks a continuation of Australia’s steady reserve accumulation, with the total stock of reserves now slightly above the July 2026 level. While the move is incremental, the higher reading may reflect ongoing efforts to maintain a robust external buffer amid shifting global financial conditions.

These reserves, which typically include foreign currency holdings, gold, and other liquid external assets, form a key line of defense supporting currency stability and broader financial resilience. Investors and analysts will be watching subsequent releases to gauge whether this uptick signals the start of a stronger build-up trend in Australia’s reserve position over the coming months.

Reserve Bank Governor Michele Bullock is due to testify before Parliament on Friday, an event closely watched for policy signals. In Australia’s top trading partner China, a mixed set of August economic data boosted expectations for additional stimulus, providing further support to local risk sentiment.

Gains were led by financials, technology, and manufacturing stocks, partly offset by weakness in healthcare and resources. The big four banks advanced, alongside insurers QBE (up 1.9%) and IAG (up 0.8%). Among individual outperformers, Qantas climbed 2.2%, Bluescope Steel added 2.1%, and Ramsay Health Care gained 1.2%. The energy sector lagged, with Woodside falling 1.5% and Santos down 2.1%.

Earlier this month, the central bank opted to keep its policy rate unchanged but signaled that rate hikes may be on the horizon. This comes on the back of a 6% year-on-year expansion in the economy in the second quarter, underpinned by resilient domestic demand and strong export performance.

Interest rate swaps now reflect an 80% probability of a cumulative 50-basis-point rate increase over the next 12 months, a sharp repricing from under 25 basis points implied at the end of August. At the same time, rising interest rates in Japan have heightened the risk of a reversal in yen-funded carry trades. Such an unwinding could prompt foreign investors to pare back their holdings of Malaysian bonds, exerting further upward pressure on yields.

Losses in the kiwi were partly limited after data showed New Zealand’s economy grew 0.2% in the three months to June, slightly above the 0.1% consensus forecast and the Reserve Bank’s expectation of flat growth. On an annual basis, GDP rose 2.6%, beating estimates of 2.2%. These readings pointed to a degree of resilience in economic activity despite the significant energy shock associated with the conflict in the Middle East.

Earlier this month, the RBNZ raised interest rates for a second consecutive meeting but signaled a less aggressive tightening trajectory. Even so, markets expect the official cash rate to reach 3.0% by December, as the recent surge in oil prices has heightened upside risks to inflation.

The decision comes against a backdrop of moderating economic momentum and cooling price pressures. Macau’s GDP grew just 0.3% year-on-year in the second quarter of 2026, a sharp slowdown from the 7.1% expansion recorded in the first quarter. Meanwhile, inflation eased for the second consecutive month, reaching 1.12% in July 2026.

Under Macau’s linked exchange rate system, the base rate is aligned with Hong Kong’s base rate, which is typically set 50 basis points above the lower bound of the target range for the US federal funds rate.

The Fed unanimously raised the federal funds rate by 25 basis points to 3.75%–4.00%, in line with forecasts, citing persistently elevated inflation. Updated projections showed that 16 of 18 policymakers anticipate at least one additional increase this year.

Attention now turns to the RBA’s policy meeting on September 29. Markets are assigning an 85% probability to a 25-basis-point hike from the current 4.35% cash rate, with expectations that the rate will rise to around 4.85% by early 2027. The IMF has also warned that stubborn inflation and higher energy costs pose upside risks to prices and could force the RBA to tighten policy further.

At the same time, traders are closely tracking developments in the Iran–US conflict and their implications for oil markets. Crude prices remain above $100 per barrel, though they have begun to ease as Saudi Arabia moves to restore pipeline capacity.

Electronics exports jumped 131.8% in August, up from 112% in July, led by disk media products (290.2%), personal computers (237.9%), and integrated circuits (90.9%). Non-electronics exports also returned to growth, rising 12.0% after a 2.4% contraction in July, supported by higher shipments of non-monetary gold (67.0%), specialised machinery (57.7%), and medical apparatus (22.1%).

By destination, exports increased to the US (91.0%), South Korea (87.1%), China (70.3%), Hong Kong (62.9%), Taiwan (58.5%), Malaysia (39.3%), and Indonesia (24.5%), but declined slightly to the EU (-1.7%). On a month-on-month basis, NODX rebounded 10.9% after a 0.3% drop in July, registering the fastest pace of growth in four months.

The improvement signals a notable month-on-month expansion in Singapore’s external surplus position over the summer period. While the underlying drivers—such as export growth, import dynamics, or sector-specific performance—were not detailed in the latest release, the increase in the headline trade balance suggests resilient external demand or moderated import activity, or a combination of both.

Market participants and analysts will be watching subsequent releases to assess whether August’s wider surplus marks the beginning of a sustained trend or a short-term fluctuation in Singapore’s external trade performance.

On a month-over-month basis, the latest reading shows that export momentum has shifted decisively back into positive territory. The “actual” August figure reflects the change from July to August 2026, while the “previous” July indicator captured the movement from June to July 2026. The reversal from a modest contraction to robust growth suggests improving external demand conditions for Singapore’s non-oil shipments as the third quarter progresses.

The data are presented on a year-over-year basis, meaning August’s 46.20% rise reflects the change in non-oil exports relative to August of the previous year, while July’s 24.10% gain was measured against July a year earlier. The near-doubling in the growth rate between July and August signals a strong upswing in export momentum for Singapore’s trade-reliant economy.

Fed Chair Kevin Warsh noted that inflation remains elevated, reinforcing concerns after last week’s data showed core US inflation in August rose more than expected.

At the same time, gold found some support from a decline in oil prices, as fears over supply disruptions in the Middle East eased. Saudi Arabia aims to restore roughly half of the capacity of its East–West pipeline within days and bring it back to full operation within six weeks. US Energy Secretary Chris Wright also reported that 18 million barrels of crude and petroleum products had transited the Strait of Hormuz earlier this week.