Asia sold off in sympathy with Monday's Wall Street slide as the Hormuz stalemate keeps oil and Treasury yields grinding higher into a data-heavy US week.
Japan led losses, with the Nikkei 225 down 1.11% and the Topix off 1.67% Tuesday as Chicago/Osaka futures pointed to a lower cash open versus the prior 65,877 close. Kospi slipped 0.4% and Kosdaq fell 0.78%. Hong Kong and mainland China were softer too, Hang Seng down 0.57% and CSI 300 off 0.29%, while Australia's ASX 200 was the lone bright spot, up 0.1%. USD/JPY pushed back toward 158 as a firmer dollar and 19-year-high Treasury yields pressured the yen, with USD/CNH tracking higher in sympathy as the beta-play dynamic to JPY persists.
US futures were little changed overnight - Dow +19, S&P and Nasdaq flat - after Monday's session where the Dow shed over 300 points and the S&P and Nasdaq fell 0.8% and 0.9% on a fresh leg of the bond selloff. The 10-year sits near 5.25%, a 19-year high, and the 30-year near 5.57%, highest since 2004, after Trump rejected Iran's latest Hormuz proposal and Brent jumped toward $107-108. Markets price roughly 70% odds of another Fed hike at the October 28 FOMC after last month's move to 3.75-4.00%. JOLTS lands today, with ADP and PCE Wednesday, ISM Thursday and September payrolls Friday - all now hawkish-Fed catalysts.
The risk: any sign talks with Iran resume constructively this week unwinds the oil-yields-dollar trade fast, while a soft payrolls print Friday could do the same from the data side - but a hot PCE or NFP number cements the October hike and extends the drawdown.