Diesel Spot Activity Turns Upbeat Despite Weaker Market Structure

Economic

Commodity

Summary:

Asia's diesel spot activity turned slightly more upbeat on window and offscreen as November refiner sales trickled in, though paper market structures softened further ahead of the mid-month assessment date rollover.

Some November spot sale activities did surface in line with earlier expectations, with Taiwan's FPCC offering one cargo of 500ppm sulphur gasoil.

Falling for a third consecutive session, the 10ppm sulphur gasoil refining margins (GO10SGCKMc1) eased to below $20 a barrel.

However, cash differentials (GO10-SIN-DIF) went in the opposite direction and reversed some of previous session's losses to close at $1.58 a barrel.

Meanwhile, the front-month arbitrage window between Asian and U.S. west coast jet fuel prices remained widely open.

Regrade (JETREG10SGMc1) narrowed even further to discounts of around 25 cents a barrel, hovering at similar levels to mid-December last year.

INVENTORIES

- U.S. crude oil stockpiles were expected to have risen last week, while gasoline and distillate inventories likely fell, a preliminary Reuters poll on Monday showed.

REFINERY NEWS

- The Kirishi oil refinery, one of Russia's largest, has halted a crude distillation unit, CDU-6, its most productive unit, following a drone attack and subsequent fire on October 4, with its recovery expected to take about a month, two industry sources said on Monday.

NEWS

- Indonesia took another step towards launching biodiesel containing 50% palm-oil based biofuel (B50) by concluding laboratory tests, an energy ministry official said on Tuesday, as the country aims for implementation next year.

- China is building oil reserve sites at a rapid clip as part of a campaign to boost crude stockpiles that increased in urgency after Russia's Ukraine invasion upended global energy flows and has accelerated this year, according to public data, traders and industry experts.

- Oil prices extended gains on Tuesday as a smaller-than-expected November output hike by OPEC+ helped to ease some fears of a growing supply glut.

Source: TradingView

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Olivia Brooks

Political

Middle East Situation

Israeli tanks, boats and jets pounded parts of Gaza on Tuesday, giving Palestinians no respite on the anniversary of the Hamas attack that led to two years of war and underlining the challenges at talks on Donald Trump's plan to halt the conflict.

Israel pressed on with its offensive, residents said, after Hamas and Israel began indirect negotiations on Monday in the Egyptian resort of Sharm el-Sheikh on sensitive issues such as Israel's withdrawal from Gaza and Hamas' disarmament.

The talks on the U.S. president's plan are widely seen as the most promising yet for ending a war that has killed tens of thousands of Palestinians and devastated Gaza since the October 7, 2023 attack on Israel which killed 1,200 people.

MILITANT GROUPS MARK ANNIVERSARY WITH STATEMENT

Residents in Khan Younis in southern Gaza and Gaza City in the north reported heavy bombing from tanks and planes in the early hours on Tuesday, witnesses said. Israeli forces pounded several districts from the air, sea and ground, they said.

Gaza militants fired rockets across the border early on Tuesday, setting off air raid sirens at Israeli kibbutz Netiv Haasara, and Israeli troops continued to tackle gunmen inside the enclave, the Israeli military said.

Marking the anniversary of the attack, an umbrella of Palestinian factions including Hamas, the Islamic Jihad and smaller militant groups vowed "the choice of resistance by all means is the sole and only way to confront the Zionist enemy."

"No one has the right to cede the weapons of the Palestinian people. This legitimate weapon... will be passed through the Palestinian generations until their land and sacred sites are liberated," the statement issued in the name of "Factions of the Palestinian Resistance" said.

Israelis marking the second anniversary of the Hamas attack - in which 251 people were taken back to Gaza as hostages - gathered at some of the worst-hit sites of that day and at Tel Aviv's so-called Hostages Square.

"It's like an open wound, the hostages, I can't believe it's been two years and they are still not home," said Hilda Weisthal, 43. "I really hope that all the leaders will make a push and that this war will end."

In Gaza, Mohammed Dib, 49, voiced similar hopes of an end to the conflict.

"It's been two years that we are living in fear, horror, displacement and destruction," he said. "We are hoping, with these new negotiations, to reach a ceasefire and a final end to the war."

ISRAEL INCREASINGLY ISOLATED ON WORLD STAGE

Israel is negotiating from a position of strength. It responded to the 2023 attack by launching its offensive to eliminate Hamas in Gaza, while also assassinating the top Hamas leaders outside the Strip and other Iranian-backed groups such as Lebanon's Hezbollah and weakening Yemen's Houthis.

It also killed Iran's top military commanders and attacked Iranian nuclear facilities during a 12-day war which was joined by the United States.

But Israel's military onslaught on Gaza, which local health authorities say has killed over 67,000 people and has flattened the tiny enclave, isolated the country on the world stage.

Some Western leaders have recognised Palestinian statehood and pro-Palestinian protests have erupted around the world.

Israel and Hamas have both endorsed the overall principles behind Trump's plan, under which fighting would cease, hostages go free and aid pour into Gaza.

The plan also has the backing of Arab and Western states. Trump has called for negotiations to take place swiftly towards a final deal, in what Washington hails as the closest the sides have yet come to ending the conflict.

TRUMP SEEKS MAJOR FOREIGN POLICY TRIUMPH

Trump has invested significant political capital in efforts to end the war.

Even if a deal is clinched during talks in Egypt, major questions will linger, including who will rule Gaza and rebuild it.

Trump and Israeli Prime Minister Benjamin Netanyahu have ruled out any role for Hamas, which seized Gaza in 2007 after defeating its rivals in a brief civil war.

Though Trump says he wants a deal quickly, an official briefed on the negotiations, speaking on condition of anonymity, said he expected the round of talks that started on Monday would require at least a few days.

An official involved in ceasefire planning and a Palestinian source said Trump's 72-hour deadline for the hostages' return could be unachievable for dead hostages. Their remains may need to be located and recovered from scattered sites.

The Israeli delegation includes officials from spy agencies Mossad and Shin Bet, Netanyahu's foreign policy adviser Ophir Falk and hostages coordinator Gal Hirsch. Israel's chief negotiator, Strategic Affairs Minister Ron Dermer, was expected to join later this week, pending developments in the negotiations, according to three Israeli officials.

The Hamas delegation is led by the group's exiled Gaza leader, Khalil Al-Hayya, who survived an Israeli airstrike in the Qatari capital, a month ago.

The U.S. has sent special envoy Steve Witkoff and Jared Kushner, the president's son-in-law who has strong ties to the Middle East, the White House said.

Source: Reuters

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Economic

Stocks

Vietnam’s Stock Market Poised for Major Milestone: FTSE Russell Upgrade

Vietnam's stock market is on the edge of a significant transition, with the upcoming FTSE Russell classification report on October 8, 2025, expected to determine whether the country will be upgraded from a “Frontier Market” to a “Secondary Emerging Market.” This upgrade could open the floodgates for billions of dollars in foreign investment, propelling the country's market into the global spotlight.

FTSE Russell's decision could mark a historic shift for Vietnam's financial landscape, providing the country access to the vast pool of global passive investment funds. If the upgrade is granted, it would likely trigger the inclusion of approximately 30 Vietnamese stocks in international investment portfolios, potentially attracting at least $1 billion from passive investment funds. This would be a major milestone in the country’s efforts to bolster its market position and align with international standards.

The anticipated upgrade is seen as a result of Vietnam's robust efforts to meet the 9 required criteria and 2 optional criteria outlined by FTSE Russell, which include reforms in foreign investor access, trading, and foreign ownership limits. The government has enacted several key regulatory changes, such as eliminating pre-trade margin requirements for foreign investors, streamlining processes for opening foreign investment accounts, and allowing greater foreign ownership in local companies.

Government Support and Ongoing Efforts

Vietnam’s government, along with regulatory bodies such as the State Securities Commission and the State Bank, have made significant strides in aligning the country’s market with international standards. According to Deputy Minister of Finance Nguyễn Đức Chi, these reforms reflect Vietnam’s commitment to long-term, sustainable market development. The government has also worked closely with international organizations, ensuring that Vietnam's stock market is evaluated fairly and transparently.

Vietnam’s Finance Minister, Nguyễn Văn Thắng, along with the Vietnam Stock Exchange (VNX), recently signed a memorandum of understanding (MOU) with FTSE Russell to strengthen market infrastructure and develop relevant indices. This move is seen as a crucial step toward solidifying Vietnam's position on the global investment map.

Market analysts remain optimistic, with many predicting a positive outcome for Vietnam’s market upgrade. If successful, the country could aim for further elevation to MSCI’s Emerging Markets index in 2026–2027. This would cement Vietnam’s place in the global economic arena and provide an opportunity for continued market growth and development.

A Critical Moment for Vietnam’s Stock Market

While the FTSE Russell upgrade is a significant step forward, experts like SSI’s Nguyễn Duy Hưng caution that it is not the end of the journey. The market must continue to meet rigorous international standards and pursue additional reforms to fully realize its potential in the global investment ecosystem.

As the October 8 deadline approaches, Vietnam’s stock market remains in suspense, awaiting FTSE Russell’s pivotal decision. An upgrade would represent a major achievement for the country, but the path ahead requires continued effort and commitment to achieving even higher standards, including the potential inclusion in MSCI's Emerging Markets index in the near future. With global investors closely watching, the next few years will be crucial for Vietnam’s stock market to prove its readiness for greater global integration.

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Economic

China's Economic Resilience Amid Global Trade Tensions

The World Bank has upgraded its growth forecast for China, predicting a 4.8% expansion in 2025, up from 4% previously forecast in April. This marks a positive outlook for the country, aligning more closely with China's official target of around 5% GDP growth for the year. While the upgrade comes after a summer of heightened trade tensions with the U.S., which saw tariffs on Chinese goods temporarily escalate, the World Bank has acknowledged that China’s economy has benefitted from significant government support.

Despite facing persistent trade issues, including a high tariff environment with the U.S., China’s exports have held strong, supported by increased shipments to Southeast Asia and Europe. The World Bank credits the country's stimulus measures, particularly targeted consumer programs, as key to sustaining retail sales and supporting export growth. However, with exports expected to ease in the coming years, a slowdown is anticipated.

Challenges Remain for Domestic Consumption and Real Estate

While the external sector has been a bright spot, domestic consumption has remained weak. Retail sales growth in August was only 3.4%, missing expectations, and real estate investment continued its downward trajectory with a 12.9% drop in the first eight months of the year. Despite strong tourism numbers during the “Golden Week” holiday, consumer spending showed signs of sluggishness, and economists warn that consumption growth could be weaker than official figures suggest.

Further compounding domestic challenges, youth unemployment remains high, with one in seven young people out of work. Additionally, China faces structural issues, including an aging population and the pressures of technological disruption, which could hinder long-term growth. A key factor differentiating China from the U.S. is the limited job creation by startups, which are less effective in China compared to their U.S. counterparts.

Outlook for 2026 and Beyond

Looking ahead, the World Bank forecasts China’s GDP growth will slow further to 4.2% in 2026. This expected dip reflects a combination of lower export growth and a gradual reduction in government stimulus to prevent public debt from spiraling. As a result, China’s role in driving regional growth will diminish slightly, impacting other developing economies in East Asia.

However, despite these challenges, the broader East Asia and Pacific region, buoyed by China's expected growth, is set to expand by 4.8% in 2025, according to the World Bank's updated projections. This represents a slight increase from the earlier forecast of 4%.

In summary, while China’s short-term economic prospects are improved by strong export performance and government stimulus, long-term growth may face pressures from both domestic and international challenges, including the ongoing trade war with the U.S. and internal structural shifts.

Source: CNBC

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Economic

OpenAI and AMD Forge Stronger Ties

In a significant development for the AI industry, OpenAI has announced a partnership with AMD to deploy 6 gigawatts of the company’s Instinct graphics processing units (GPUs) to support OpenAI’s expanding AI infrastructure. The deal also includes an option for OpenAI to acquire up to 10% of AMD, further cementing their collaboration in the AI space. This deal comes on the heels of OpenAI’s previous partnership with Nvidia, creating a tightly-knit ecosystem of companies that supply capital, technology, and computing power essential for AI growth.

This deepening alliance among the industry’s key players – OpenAI, AMD, Nvidia, and Oracle – has led to what analysts describe as a “circular economy” in AI. While this approach has spurred rapid technological advancement, concerns are growing about the potential risks if any one of these crucial players falters.

Figma and AI Sentiment Push Stock Prices Higher

Following OpenAI’s announcement, Figma’s stock surged, fueled by CEO Sam Altman’s onstage promotion of the design software. This move highlights the continued optimism surrounding AI, with significant institutional and retail investments flowing into AI-related companies.

Despite concerns about potentially overheated valuations, AI continues to capture the attention of investors, particularly as companies across sectors look to integrate artificial intelligence into their operations.

The AI Arms Race and Its Impact on the Market

As the AI arms race accelerates, analysts are closely monitoring whether the current “band of brothers” in the industry can meet the high expectations surrounding AI’s potential. With strong earnings anticipated from AI-focused companies, the industry’s rapid development may continue to push market sentiment.

However, with AI driving much of the growth, questions remain about how long the trend can continue and whether the sector can manage the immense financial pressure. Wells Fargo’s chief equity strategist, Ohsung Kwon, noted that AI will dominate the third-quarter earnings season, underscoring the industry’s current impact.

Global Implications: Japan and China

Meanwhile, Japan’s bond market faces a potential shift as new Prime Minister Sanae Takaichi, with a pro-growth agenda, is expected to test the country’s fiscal policy and bond market stability. The markets are betting that Takaichi will maintain Japan’s dovish stance while increasing fiscal activity, which could push long-term yields higher.

On the global stage, the World Bank raised its growth forecast for China, as the country’s economy is poised to benefit from AI investments and the overall global demand for technology-driven growth.

OpenAI’s ongoing partnerships and the growing dominance of AI in the market are reshaping the technological landscape. With companies like OpenAI, AMD, and Figma at the forefront, the industry’s future appears promising, but risks remain. Investors are keeping a close eye on these developments as AI sentiment continues to dominate financial markets.

Source: CNBC

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Stocks

Political Crisis in France Weighs on European Markets

European stocks edged lower on Tuesday, reflecting growing concerns following the resignation of French Prime Minister Sebastien Lecornu, which triggered political instability in France. The CAC 40 index fell by about 1.3% on Monday, with French banks, such as Societe Generale and BNP Paribas, facing significant losses. However, luxury stocks showed some resilience, with companies like Renault, Kering, and LVMH rebounding in early trading.

Lecornu’s sudden resignation, just a day after appointing a new cabinet, has left markets uncertain about the future direction of French politics. Despite a call from President Emmanuel Macron for Lecornu to have further discussions with rival parties, the political chaos has created a ripple effect on investor sentiment. The resignation comes after a series of failed attempts to address France's mounting fiscal issues, which have contributed to the market downturn.

Weak German Data and Corporate Updates Add to Market Caution

In addition to France’s political drama, disappointing economic data from Germany exacerbated investor concerns. German factory orders for August fell by 0.8% compared to July, a significant miss from the expected 1.1% increase. This slowdown in the manufacturing sector has raised doubts about the strength of the Eurozone's largest economy.

In corporate news, energy utility Naturgy saw its stock drop by 3.11% after announcing the sale of about 3.5% of its shares. The company is looking to join the MSCI indexes, a move that added to the negative sentiment surrounding the market.

On a more positive note, Shell’s shares rose by 1.7% after the British oil giant reported that its trading in the gas division was expected to be significantly higher in Q3, despite a $600 million hit from the cancellation of its biofuels project in Rotterdam.

Global Market Trends: U.S. Futures and Japan’s Record Highs

Meanwhile, U.S. stock futures showed slight declines on Tuesday after Wall Street reached new highs, buoyed by optimism around potential mergers and acquisitions and expectations of a Federal Reserve rate cut. Despite concerns about the ongoing U.S. government shutdown, which has delayed key economic data, investor sentiment in the U.S. remained strong.

In Asia, Japan’s Nikkei 225 hit another record high on Tuesday, following the positive momentum from the tech sector on Wall Street.

The political instability in France, compounded by disappointing economic data from Germany, contributed to the overall decline in European markets on Tuesday. While luxury stocks showed resilience, the broader market sentiment remained cautious. The ongoing U.S. government shutdown and uncertainty surrounding the global economy continue to weigh on investor confidence across markets.

Source: CNBC

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Economic

Commodity

Gold Prices Surge as Global Uncertainties Propel Demand

Gold prices reached a new all-time high, pushing toward the $4,000 per ounce mark, as the ongoing US government shutdown and political instability in France added uncertainty to global markets. On Monday, gold surged 1.9%, reaching $3,977.44 an ounce. The extended US government shutdown, which has halted key economic data releases, has left investors in a state of uncertainty about the US economy's health, further driving demand for safe-haven assets like gold.

In addition to US political drama, the resignation of French Prime Minister Sebastien Lecornu and the potential rise of Japan's first female prime minister, Sanae Takaichi, have increased concerns about fiscal stability, further contributing to the surge in gold prices. Gold’s upward trajectory has been supported by continued institutional and retail investments, especially in Europe and Japan, as traders seek refuge from volatile markets.

The US Federal Reserve's decision to lower interest rates, paired with ongoing gold-buying by central banks, has further bolstered gold’s appeal. The People’s Bank of China extended its gold-buying streak for an 11th consecutive month in September, adding to the bullish sentiment.

Investor Sentiment and the Future Outlook for Gold

Goldman Sachs has raised its gold price forecast for December 2026 to $4,900 per ounce, citing ETF inflows and central bank buying as major drivers of this growth. With gold becoming an increasingly attractive hedge against the US dollar and global economic shocks, experts suggest a 5% portfolio allocation to gold as a prudent move.

Gold’s rally is not only driven by geopolitical events but also by a shift in investor sentiment, with many now viewing gold as a safer asset than the US dollar. As central banks continue to purchase gold and institutional investors increasingly allocate funds to the precious metal, the outlook for gold remains positive. Analysts expect gold’s price to continue rising, with many predicting a significant upside in the coming years.