investingLive Asia-Pacific market news: Oil eases on Trump’s Iran pledge

Summary:

  • The Pentagon has prepared options for a roughly three-day campaign against Iran, the New York Times reported, but Trump has vetoed five strike proposals and pledged no attack before the midterms
  • Oil prices edged lower as Trump’s pledge outweighed reports of US military preparations
  • Gold traded higher and the US dollar softened as Treasury yields pulled back
  • The onshore yuan strengthened after the PBOC defended its currency policy
  • Japan’s Nikkei 225 fell about 1% in early trade on AI sector doubts and global bond stress; the Topix eased 0.25%
  • Japanese household spending fell 3.1% y/y in August, a smaller drop than forecast, for a ninth straight month of decline
  • Japan is relaunching its DOGE-style spending review to help fund Prime Minister Takaichi’s food tax cut
  • SpaceX agreed to buy nationwide 800 MHz spectrum for Starlink Mobile, weighing on AT&T and Verizon shares
  • PepsiCo beat third-quarter forecasts but cut its profit outlook; JPMorgan trimmed its price target

Iran and oil

The Pentagon has drawn up options for a short, intense campaign of roughly three days against Iran, targeting its missile and drone arsenal, energy facilities and Islamic Revolutionary Guard Corps command posts, The New York Times reported, citing officials. Senior officials led by Vice President JD Vance discussed the plans at Camp David last Friday, and commanders are ready to act within days should the president change course.

The report also said President Donald Trump has vetoed five proposals for major operations against Iran or the Houthis in recent months. On Thursday he said the United States would not attack Iran before the midterm elections. Oil prices edged lower in Asian trade, with markets giving more weight to Trump’s public pledge than to reports of military preparations.

Gold, the dollar and the yuan

Gold traded higher as US Treasury yields pulled back for a second session, reducing the cost of holding the non-yielding metal. The US dollar softened alongside yields. In China, the onshore yuan strengthened after the People’s Bank of China defended its currency policy and denied weakening the yuan to gain a trade advantage.

Japan

Japan’s Nikkei 225 fell about 1% in early trade, weighed down by doubts over the AI sector and stress in global bond markets, while the broader Topix slipped 0.25%.

Household spending fell 3.1% from a year earlier in August, a smaller decline than the 3.6% forecast and July’s 3.6% drop, marking a ninth consecutive month of annual contraction.

The government said it would relaunch its DOGE-style spending review, modelled on the US Department of Government Efficiency, targeting 201 special-purpose public funds expected to hold around 7 trillion yen, Reuters reported. The money would help pay for Prime Minister Sanae Takaichi’s planned cut to the consumption tax on food. A first round of the review produced just three proposals. Japanese government bond yields are at multi-decade highs on concerns over the country’s finances.

Global markets

US stock indexes fell overnight, led by technology shares, after reports that OpenAI’s annualised revenue was about $50 billion, roughly $20 billion below the figure previously circulated. Axios reported that the higher number had been grossed up to match Anthropic’s method of counting cloud partner sales. Euro zone borrowing costs remained elevated as higher oil prices added to inflation concerns, with worries over France’s budget also weighing.

Corporate

SpaceX agreed to acquire Grain Management’s nationwide 800 MHz spectrum portfolio, up to 14 MHz of paired low-band airwaves, to provide indoor coverage for its Starlink Mobile service. The US Federal Communications Commission separately approved 15,000 next-generation satellites for direct-to-phone service. The deal positions SpaceX as a direct competitor to US wireless carriers, and AT&T and Verizon shares came under pressure.

PepsiCo beat third-quarter forecasts with core earnings of $2.34 a share on revenue of about $25.3 billion, but cut its full-year profit outlook as North American volumes weakened and input costs rose. Quarterly profit included a one-off boost from tariff refunds, meaning underlying margins were weaker than the headline result suggested. JPMorgan lowered its price target on the stock to $137 from $138.

Week ahead

US stock markets will trade normally on Monday for Columbus Day, but the US bond market will be closed, and Japan will be shut for a public holiday. 

This article was written by Eamonn Sheridan at investinglive.com.

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