It was a day of news and data with limited immediate market impact.
In the U.S., travel and growth could take a hit after the government said it will slash flight numbers from Friday due to the shutdown. Transport Secretary Duffy warned the air system is becoming riskier as a result, with air traffic to be cut by 10%, affecting the 30 busiest airports and more.
In New Zealand, Reserve Bank Governor Christian Hawkesby said the rise in unemployment was broadly in line with expectations, reflecting where the economy sits in the current cycle. Speaking to lawmakers after the Financial Stability Report, he acknowledged conditions were “hard out there” but stressed the financial system remains resilient, even under severe stress scenarios.
Get ready for a new entrant in the “too-big-to-fail” club: OpenAI is seeking U.S. government loan guarantees to help fund more than $1 trillion in AI infrastructure projects. CFO Sarah Friar said federal backing would lower borrowing costs and attract more investors.
Also in AI, Nvidia CEO Jensen Huang warned the U.S. risks losing the technology race to China, citing Beijing’s subsidies and unified policies versus America’s fragmented regulations. “China is going to win the AI race,” he told the FT, as relayed by Axios.
From Japan, real wages fell 1.4% y/y in September — the ninth straight decline — highlighting the challenge for the BoJ, though base pay for regular workers rose 2.2%. The data likely keepd the central bank on its only slow and gradual tightening path. Final PMI figures showed the services index at 53.1, maintaining growth for a seventh month, while the composite PMI edged up to 51.5 as services offset weaker factory output.
Japan Innovation Party (the LDP’s junior coalition partner in government) co-leader Hidetaka Fujita warned that an early BoJ rate hike could send mixed signals to businesses and ruled out tax increases to fund the government’s front-loaded defence spending.
The Wall Street Journal reported that President Trump has expressed hesitation about ordering military action to oust Venezuelan leader Nicolás Maduro, fearing strikes might fail to force him out.
In China, the Shanghai Composite climbed back above 4,000, trimming its one-week decline. The CSI Semiconductor Index jumped over 3% after Reuters reported Beijing has banned foreign AI chips from state-funded data centres, hitting Nvidia, AMD and Intel while boosting domestic players like Huawei. The move underscores China’s drive for AI chip self-sufficiency amid ongoing U.S. export curbs.
Elsewhere, Asia-Pac equities generally traded higher, extending Wall Street’s rebound, while major FX was subdued. The USD softened slightly as the JPY, EUR and GBP gained; AUD, NZD and CAD under-performed. Gold edged toward US $4,000, though without testing the level.
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This article was written by Eamonn Sheridan at investinglive.com.
ICYMI – Reuters reports that China has ordered all state-funded data centres to use only domestically made AI chips, in a move likely to hit U.S. chipmakers including Nvidia, AMD, and Intel. The directive, issued in recent weeks, requires projects under 30% completion to remove or cancel purchases of foreign chips, while more advanced projects will be reviewed individually.
The policy marks one of Beijing’s most assertive steps yet to eliminate foreign technology from critical infrastructure and accelerate AI chip self-sufficiency, giving local producers such as Huawei a major boost.
The move comes amid easing trade tensions between Washington and Beijing, though chip technology remains a flashpoint. Nvidia, which once held 95% of China’s AI chip market, has seen its share fall to zero following U.S. export restrictions.
Analysts say the decision could reshape China’s $100 billion data centre sector and deepen the divide between U.S. and Chinese AI capabilities, as domestic firms expand under tighter state protection.
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Beijing’s latest move intensifies U.S.–China tech decoupling, threatening chipmakers’ China revenue while accelerating domestic AI development. The ban signals long-term support for local semiconductor firms like Huawei and Cambricon.
This article was written by Eamonn Sheridan at investinglive.com.
China appears to be prioritising currency stability and investor confidence over export competitiveness, signalling a policy tilt toward a stronger yuan despite pressure from a resurgent U.S. dollar.
Via Reuters take on the currency.
The People’s Bank of China (PBOC) reinforced that stance this week by raising its counter-cyclical adjustment factor when setting the daily USD/CNY midpoint, a move that effectively limits yuan depreciation. Even as the dollar index eased, the midpoint remained skewed toward yuan strength — underscoring the central bank’s resolve to prevent renewed weakness.
The yuan’s trade-weighted value has climbed in recent weeks, nearing levels seen before the U.S. “liberation day” tariffs imposed in April. While that may squeeze exporters, the policy aligns with Beijing’s efforts to boost investor confidence, attract foreign capital, and advance trade deals with major partners.
A Reuters poll last week showed the highest level of long-yuan positioning since mid-September, suggesting markets are increasingly convinced the PBOC will defend the currency. Analysts expect a gradual appreciation trend as China pushes to expand imports, lower U.S. tariffs, and finalise a free trade agreement with the EU.
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The PBOC’s firm stance against yuan weakness signals Beijing’s shift toward financial stability and investor confidence, reinforcing expectations of a stronger renminbi as trade and investment ties deepen.
This article was written by Eamonn Sheridan at investinglive.com.
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