Morning Market Brief – 2026-10-13

Tuesday morning brings sharp shifts across Asian markets and the return of a risk premium in the crude oil market. While markets yesterday pinned their hopes on an easing of geopolitical tensions, today's reports are testing that optimism. Meanwhile, Wall Street investors are gearing up for the start of earnings season, kicked off by major US banks, which will provide insight into the true health of the global consumer and corporate sector.

Geopolitical Environment

Yesterday, we reported on the "energy ceasefire" between Russia and Ukraine announced by Donald Trump, which initially provided relief to the commodities market. However, the situation quickly grew complicated. President Volodymyr Zelensky announced that Russian attacks on Ukrainian energy targets are still ongoing and Kyiv is awaiting the details of any potential agreement. At the same time, concerns over maritime transport security in the Middle East have resurfaced. The United Kingdom Maritime Trade Operations (UKMTO) reported a drone attack on a tanker near the port of Sohar (Oman) and damage to another vessel transiting the strategic Strait of Hormuz. In response to these developments, European Brent crude surged approximately 2% on Monday, reaching $106.76 per barrel. (Sources: Reuters; Geo News; Arab News)

We also highlight the dangerous situation in Saudi Arabia. Saturday's attack on Riyadh International Airport (claimed by Yemeni Houthi rebels) claimed 13 lives. Facing these logistical challenges, the Saudi energy minister announced that over the next two to three years, the country intends to expand the capacity of its pipelines bypassing the Persian Gulf to 10 million barrels per day. (Sources: Reuters; NDTV Profit)

Today's Highlights

• Sharp sell-off in the South Korean semiconductor sector. Tuesday's Asian trading session brought heavy declines. The KOSPI (Korea Composite Stock Price Index – the primary index of the Seoul stock exchange) tumbled as much as 7.4% intraday. Investors dumped shares of tech giants en masse: Samsung Electronics slid 7.7%, while SK Hynix dropped 8.8%. The market attributes this capital flight to growing concerns over competition from China's CXMT and mounting doubts about the sustainability of the current artificial intelligence (AI) boom. (Sources: Associated Press; Korea Economic Daily)

• Tencent raises capital for AI development. Tapping into the AI arms race, Chinese tech giant Tencent has launched a sale of dollar-denominated and "dim sum" bonds (denominated in Chinese yuan but issued outside mainland China). The transaction is estimated to raise at least $4.5 billion. The proceeds will fund the company’s rising expenditure on AI infrastructure and new products. (Sources: Reuters)

• International Monetary Fund (IMF) raises forecasts, but warns of risks. In its latest October World Economic Outlook (WEO) report, the IMF projects global GDP (Gross Domestic Product) growth at 3.1% in 2026, slightly above its July forecast (3.0%). However, the Fund outlined a downside risk scenario: if oil prices were to remain at $130 per barrel through the end of the first quarter of 2027, global growth would be reduced by 0.2 percentage points in 2026 and by 0.5 percentage points in 2027. (Sources: Reuters; IMF)

• Wall Street kicks off earnings season. As anticipated yesterday, markets are eagerly awaiting third-quarter financial reports from major US banks. Market calendars indicate that JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo will report earnings today before the US market open. These reports traditionally serve as a barometer for the overall health of the economy. (Sources: Business Insider)

Market Background

• Smartphone market loses steam. According to preliminary data from analysts at Counterpoint Research, global smartphone shipments in the third quarter of 2026 fell by 20% year-on-year, reaching their lowest level for a third quarter since 2012. The primary culprits are memory shortages and rising component costs, which are weighing heavily on electronics manufacturers. (Sources: Reuters; Counterpoint Research)

• Weakening Chinese consumer hits luxury. French luxury goods conglomerate LVMH reported approximately €18.5 billion in revenue for the third quarter. While solid, this represents organic growth of just 1%. Analysts were particularly focused on a 5% organic drop in the prestigious Fashion & Leather Goods division, alongside a 5% decline in sales across Asia (excluding Japan). LVMH attributed the results to a softer macroeconomic environment in China. (Sources: LVMH; CNBC)

• Japan's wholesale inflation remains elevated. Japan's Corporate Goods Price Index (CGPI – a measure of wholesale inflation) rose 6.8% year-on-year in September. While this marks a deceleration from August's 7.6% (and came in below consensus), the reading is seen by the market as firm enough to support expectations of an interest rate hike by the Bank of Japan (BOJ) in the near term. (Sources: Reuters; Bank of Japan)

What to Watch

The coming days are packed with key macroeconomic data. Particular attention should be paid to releases from the US and China:

• 13.10 (08:00) – Germany: Final September CPI inflation. Final confirmation of price dynamics that will influence expectations regarding subsequent European Central Bank (ECB) decisions.
• 14.10 (03:30) – China: September CPI and PPI inflation. Given today’s weaker sales data from LVMH, these prints will be crucial for assessing the true state of Chinese domestic demand and deflationary pressures.
• 14.10 (10:30) – Eurozone: Speech by ECB President. Remarks by Christine Lagarde could offer clues on the monetary policy outlook ahead of the upcoming meeting.
• 14.10 (14:30) – US: September Consumer Price Index (CPI) inflation. The most important macro report of the week. This data will guide market pricing of the Federal Reserve’s (Fed) next interest rate moves.
• 14.10 (20:00) – US: Fed Beige Book. The report will provide key qualitative insights from US economic districts.
• 15.10 (14:30) – US: Retail sales and September PPI (Producer Price Index). A key gauge of US consumer spending combined with a snapshot of factory-gate cost pressures.