Oil falls after US-Iran talks; Australian jobs data in focus

Market summary:

• Crude prices declined after the US and Iran held talks via a Qatari mediator at the UN General Assembly
• Iranian Foreign Minister Abbas Araghchi met US envoys Steve Witkoff and Jared Kushner for three hours; Trump called the session "a very good meeting" after the administration had earlier said none was scheduled
• Tehran's demands include an end to hostilities on all fronts, lifting the US naval blockade and economic measures, and the release of frozen assets
• Witkoff noted that a round of discussions had been completed and that Washington hopes they will prove constructive, with mediation ongoing
• The US dollar strengthened while gold declined
• Australia's flash composite PMI eased to 50.8 in September, and the ADB held its China growth forecasts but lowered its China inflation outlook
• Australian August employment data are due at 0130 GMT Thursday, with estimates centered on a 15,000 to 30,000 increase; Japanese markets resume trading Thursday after a three-day holiday

Crude prices slipped during the session as the United States and Iran held their most significant talks in months on the sidelines of the UN General Assembly in New York, with Qatar acting as intermediary.

Iranian Foreign Minister Abbas Araghchi spent three hours with US envoys Steve Witkoff and Jared Kushner in a session brokered by Qatar. US President Donald Trump confirmed the meeting to reporters hours after addressing the General Assembly, calling it "a very good meeting," even though the administration had earlier said no meeting was scheduled. In a post on X, Witkoff described the talks as lengthy and indirect, with mediators moving between the two delegations throughout the day, and said the sides had completed a round of discussions that Washington hopes will prove constructive and promising. He said the mediators would continue their work.

Iran used the session to outline its demands. Araghchi conveyed conditions for reopening the Strait of Hormuz, including an immediate end to the US naval blockade of Iranian ports, the release of frozen Iranian assets and an end to the war on all fronts, including those involving groups Tehran describes as the resistance. Foreign Ministry spokesperson Esmail Baghaei told state news agency IRNA that Iran's conditions also include a halt to what Tehran calls US acts of aggression and an end to economic warfare against the country.

The decline in crude extended recent losses driven by improving supply, as Saudi Arabia restarts its East-West pipeline and flows through the Strait of Hormuz recover. Despite the drop in oil, the US dollar firmed, while gold fell, with the metal caught between easing energy-driven inflation concerns and expectations that major central banks will keep interest rates higher for longer.

In regional data, Australia's S&P Global flash composite PMI slowed to 50.8 in September from 52.7, the weakest growth of the third quarter. Manufacturing slipped into contraction for the first time since March, businesses cut jobs for the first time since May, and output prices rose at a faster pace.

The Asian Development Bank kept its China growth forecasts unchanged at 4.6% for 2026 and 4.5% for 2027, but cut its 2026 China inflation forecast to 0.9% from 1.2%, citing softer demand. It raised its 2026 growth outlook for developing Asia to 5.0% from 4.9%.

Attention now turns to Australia's August labour force data, due at 11.30am Sydney time on Thursday (0130 GMT, 2130 US Eastern time on Wednesday). The market expects employment to rise by about 20,000 after July's fall, with CBA forecasting 15,000 and Westpac 30,000, and unemployment seen steady at 4.5%. The figures arrive days before the Reserve Bank of Australia's 29 September decision, where a rate increase is widely expected.

News flow was otherwise light. Japanese markets remained closed for a third straight day and reopen on Thursday.