Equities start Nov on a positive note after Oct’s rout

Asia market update: Equities start Nov on a positive note after Oct’s rout; WTI Crude FUTs decline by >2.5% amid focus on Tues’ US midterm elections and diplomatic efforts for Ukraine/Russia and Iran; Markets ignore mixed CN PMI data: JP markets are closed on Tues.

General trends and developments

- Equity FUTs have continued to improve during Asia at the start of Nov after the miserable Oct for tech shares.

- Meanwhile, Crude Oil FUTs have extended losses to start the new month. On the diplomatic front, Iran’s Foreign Min Araqchi stated Tehran has studied US VP Vance's message and discussed it at a high level [comments from Oct 31st]. The US effort to open a broader dialogue with Tehran is a positive step, added Araqchi. Interestingly, the Sultan of Oman has made his first ever visit to China. Both China and Oman have been key players in peace talks related to Iran. Incidentally, China Pres Xi had previously made 4 proposals on maintaining peace in Middle East. The China backed peace proposal for the Middle East was believed ‘echo.’ the effort to end the Ukraine war. With that being said, the WSJ continues to report that efforts are being made regarding the Ukraine/Russia peace process. The US seeks to restore Russia gas sales to Europe via Ukraine, according to recent reporting.

- China’s Oct PMI data was mixed: The official indices both contracted, while the RatingDog manufacturing figure was roughly flat m/m. Overall, the market impact was muted as other previously reported PMI data also came in weaker [including Australia, Euro Zone, US Chicago PMI]. Interestingly the slowdown in China’s official PMIs came as AI-related stocks declined during Oct. AI-related demand was previously cited as one of the bright spots for Chinese data [particularly PMI and Trade Balance]. China was closed for holiday in early Oct [1-7th].

- SoftBank’s [-2.5%] shares remain sensitive to OpenAI’s capital raising developments: OpenAI reportedly slashed its latest funding round target to $20B at a $1.25T valuation, down from aspirations of $30B at a $1.4T valuation [FT article from Oct 31st]. SoftBank is due to report Q2/H1 earnings on Nov 10th:

- Binance commented on deposit outflows after last week’s record hack: Following last week’s record crypto hack, o Sunday Binance noted stabilization, in terms of withdrawal levels. Recall, the co. observed $3.64B in net outflows [~2.1% of total assets] following the hacking incident. The exchange added that it had now covered 95% of the $6.3B of stolen assets.

- BOJ rate hike probabilities declined further after Friday’s Ueda post rate decision press conference: No clear near-term rate hike signal was seen by dealers. Some, also, are pondering if there was government pressure amid the, seeming, gap between the BOJ and government on whether deflation has been actually defeated. Perhaps more details will be revealed when the BOJ next releases its Summary of Opinions [Nov 10th].

- The Japanese press has continued to imply a reluctance by Japan’s PM Takaichi to set a formal annual defense spending to GDP target. The country’s defense budget could hit ¥80T over a 5-year timeframe, according to Sankei. The prior 5-year defense spending plan was estimated at ~¥43T, while the FY2027 Japan defense spending request has been estimated at ¥8.9T.

- Taiwan steps up support for the TWD amid equity outflow concerns: Specifically, the government is said to have increased the daily limit on USD selling by exporters. Previously, state banks were used to restore order in the FX market.

- OIS markets are expecting an RBA rate hike on Tues, implying the courage to move back-to-back: -The Reserve Bank of Australia (RBA) is expected to increase the official cash rate by +25 basis points to 4.85% at its upcoming Board meeting on Tuesday November 3rd. This would mark the fifth interest rate hike in the current tightening cycle, following four interest rate hikes totaling +100 basis points, including the most recent +25bps increase on September 29th.

- Focal points for the RBA decision include whether there will be a split vote, as some central banks have elected to allow prior tightening moves to work through the financial system, before implementing additional tightening. Interestingly, Tues’ RBA decision will come ahead of the US midterm elections, which could bring further uncertainty to markets. As the RBA meets, inflationary pressures persist as evidenced by the Oct Melbourne inflation data, which rose for the 4th straight month. The increase was primarily attributed to recreation and transport price rises, according to analysts.

- The RBA is expected to offer updated economic forecasts on Tues. The August 11th Statement on Monetary Policy (SOMP) cut end-2026 GDP growth forecast to 1.4% (vs. 2.1% prior) and June 2027 forecast to 1.5% (vs. 1.8% prior), while cutting end-2026 trimmed mean CPI inflation to 3.3% (vs. 3.5% prior) and maintaining end-2027 to 2.6%.

- Looking ahead this week (Asian-weighted focus, EST/EDT), key data releases include the Global APAC/EMEA/AMER Oct S&P/ISM/HSBC/RatingDog/HCOB Manufacturing/Services/Composite PMIs throughout the week, AU RBA Interest Rate Decision + Statement on Monday November 2nd, JP 10-Year JGB Auction on Wednesday November 4th, FR 10-Year OAT Auction on Thursday November 5th, and US October Unemployment Rate on Friday November 6th.

- Additionally, Philippine markets will be closed on Monday, while Japan markets will be closed on Tuesday in APAC due to national holidays.

- US equity FUTs +#% to +#% during Asia trading.

Looking ahead (Asian-weighted focus, using EST/EDT time-zone)

-Sun Nov 1st: OPEC Meeting, (Global APAC Oct S&P/RatingDog/HSBC Mnfg PMI, AU Sept Building Approvals, ID Oct CPI & Core CPI).

-Mon Nov 2nd: Global EMEA Oct S&P/HCOB Mnfg PMI, Global AMER Oct S&P/ISM Mnfg PMI, (Mon night, KR Oct CPI, VN Oct CPI & Industrial Production & Retail Sales & Trade Balance & FDI - USD, AU RBA Interest Rate Decision + Statement, HK Q3 Preliminary GDP & Sept Retail Sales).

-Tue Nov 3rd: FR Sept Government Budget Balance, US Sept JOLTS, KR Oct FX Reserves - USD, (Tue night, NZ Q3 Unemployment Rate, Global APAC Oct S&P/RatingDog/HSBC Svcs PMI, JP Oct Monetary Domestic Base).

-Wed Nov 4th: Global EMEA Oct S&P/HCOB Svcs/Cmps PMI, EU Oct Preliminary CPI & Core CPI, US Oct ADP Nonfarm Employment Change, US Sept Trade Balance, CA Sept Trade Balance, Global AMER Oct S&P/ISM Svcs/Cmps PMI, BR BCB Interest Rate Decision, (Wed night, KR Sept Current Account, JP Sept 17-18th BoJ MPM Minutes, AU Sept Trade Balance, PH Oct CPI & Core CPI, TH Oct CPI & Core CPI, JP 10-Year JGB Auction, SG Q3 GDP & Sept Retail Sales, MY BNM Interest Rate Decision, TW Oct CPI & FX Reserves - USD).

-Thu Nov 5th: FR 10-Year OAT Auction, EU Sept PPI, UK BoE Interest Rate Decision + Statement, BR Sept Industrial Production, US Q3 Preliminary Nonfarm Productivity & Unit Labor Costs, MX BdeM Interest Rate Decision, (Thu night, PH Sept Industrial Production, ID Oct FX Reserves - USD).

-Fri Nov 6th: DE Sept Industrial Production, HK FX Reserves - USD, EU Sept Retail Sales, PH Oct FX Reserves - USD, US Oct Unemployment Rate, CA Oct Unemployment Rate, US Nov Preliminary Michigan Inflation Expectations, UR Oct FX Reserves - USD (Fri night, CN Oct FX Reserves - USD).

Holidays in Asia this week

-Mon Nov 2nd: Philippines.

-Tue Nov 3rd: Japan.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 Index opens flat at 8,908.

-(AU) Australia Oct Final Manufacturing PMI: 49.6 v 49.7 prelim (confirms 2nd month of contraction).

-(AU) Australia Sept Building Approvals M/M: 5.1% v 2.0%e.

-(AU) Australia Oct Melbourne Institute Inflation M/M: 0.5% v 0.3% prior; Y/Y: 4.9% v 4.8% prior.

-(AU) Australia outback data center withdrew its timeline due to regulatory issues; specifically, the regulator needed additional time to set certain environmental parameters - financial press [update].

-(AU) WBC.AU Reports FY26 (A$) Adj Net 7.0B v 6.93Be; Rev 22.6B, +1% y/y; extends A$3.5B stock buyback end date to Nov 9th 2027.

China/Hong Kong

-(CN) Shanghai Composite Index opens +0.4% at 3,614; (HK) Hang Seng Index opens flat at 23,302.

-(CN) China Oct (GOVT OFFICIAL) Manufacturing PMI: 49.3 V 49.9E [weekend update].

-(CN) China Oct' RATINGDOG Manufacturing PMI: 52.0 V 52.0E (12th month of expansion).

-(CN) China President Xi meets Sultan of Oman in Beijing - Xinhua.

-(CN) China National Team ETF trading said to persist, supporting domestic equity markets - US financial press.

-(CN) China carmakers in talks with the China government over EU export quotas, relates to the allocation of hybrid vehicle export quotas to Europe - Press.

-(CN) China PBOC sets the yuan mid-point at 6.7146 v 6.7138 prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY541B in 1-day Overnight Reverse Repo & 7-day Reverse Repos; Net drains CNY515B v injects CNY15B prior.

-(HK) Macau Oct Casino Rev Y/Y: -10.0% v -10.0%e - update.

-(HK) Hong Kong Leader John Lee to depart for Beijing, Shanghai on November 3rd.

-(HK) BINANCE.IPO Hong Kong SFC Executive Director Yip: Recent incident still evolving; we ask investors to only conduct crypto transactions on locally licensed entities.

-(HK) GELYY Reports Oct Vehicle Sales: 310.2K units, +1% y/y.

-(HK) XPEV Reports Oct Vehicle deliveries: 50.2K units, +20% y/y [update].

-(HK) LI Reports Oct Vehicle deliveries: 29.0K units v 31.8K y/y - update.

-(HK) NIO Reports Oct Vehicle Deliveries: 34.2K units v 37.4K m/m - update.

Japan

-(JP) Nikkei 225 Index opens -0.4% at 62,900.

-(JP) Japan Oct Final Manufacturing PMI: 53.3 v 53.3 prelim (confirms 10th month of expansion).

-(JP) Japan Fin Min Katayama: Important to appropriately gauge tax revenues. PM Takaichi has said yen undervaluation is problematic - Tokyo, Japan.

-(JP) Bank of Japan (BoJ): Reiterates rate hikes will likely ease inflationary pressure, work to underpin consumption.

-(JP) Japan defense budget to hit ¥80.00T over 5 years - Sankei.

-(JP) Japan JERA: 110,000 emails possibly leaked from service data breach.

-(JP) Japan Econ Min Kiuchi: No change to view need 'care' on declaring deflation end - Tokyo, Japan.

-(JP) Japan Trade Min Akazawa: Paying close attention to US midterm elections - Tokyo, Japan.

-(JP) Japan Chief Cabinet Sec Kihara: Refrain from comment on GMO - Tokyo, Japan.

-(JP) Japan sells ¥250B vs. ¥250B indicated in 5-Year Climate Transition Bonds; Yield at lowest accepted price: 2.2000% v 1.941% prior, bid-to-cover 3.84x v 4.62x prior.

-(JP) 8303.JP Reports H1 Net ¥69.10B v ¥69.37B y/y, Op ¥92.18B v ¥62.44B y/y, Rev ¥452.08B v ¥364.22B y/y.

-(JP) 8473.JP Reports H1 Net ¥230.57B v ¥165.80B y/y, Op v y/y, Rev ¥1.06T v ¥902.56B y/y.

Korea

-(KR) Kospi Index opens -1.6% at 5,638.

-(KR) South Korea Oct Trade Balance: $42.5B v $38.1Be; Exports Y/Y: 93.7% v 89.3%e; Imports Y/Y: 36.0% v 39.9%e [weekend update].

-(KR) South Korea Oct Manufacturing PMI: 51.3 v 53.9 prior (11th month of expansion).

-(KR) South Korea President Lee: South Korea economy continues to show clear "V-shaped" recovery. Annual exports of $1T within reach. South Korea call on Parliament to pass budget by December 2nd [as expected] - Address to National Assembly on Budget.

-(KR) South Korea Army: Staff sergeant dies after suffering external injuries at frontline unit near border with North Korea in Cheorwon - Kyunghyang Shinmum.

-(KR) Bank of Korea sells KRW600B vs. KRW600B indicated in 3-month Monetary Stabilization Bonds (MSB); Avg Yield: 3.195% v 3.050% prior.

-(KR) South Korea Investment, SBI plan KRW10T AI data center fund - Daily.

-(KR) 402340.KR Statement: Expects more than KRW6.2T of dividend income from SK Hynix. To offer more than 60% of dividend income to shareholders by 2028.

Other Asia

-(IN) Reportedly India Commerce Ministry to hold talks with liquor companies on Nov 2nd over bulk scotch imports probe - press [weekend update].

-(IN) India Oct Final Manufacturing PMI: 54.7 v 54.9 prelim (confirms 64th month of expansion).

-(ID) Indonesia Oct CPI M/M: 0.2% v 0.3%e; Y/Y: 3.2% v 3.3%e.

-(ID) Indonesia Sept Trade Balance: $3.4B v $1.8Be.

-(ID) Indonesia Oct Manufacturing PMI: 54.0 v 52.4 prior (2nd month of expansion).

-(TW) Taiwan increases daily limit on USD selling by exporters; cites traders - US financial press.

-(TW) Taiwan Oct Manufacturing PMI: 54.9 v 56.7 prior (11th month of expansion).

-(TW) Taiwan, Japan consider trade agreement akin to Taipei-London pact - Nikkei.

-(MY) Malaysia Oct Manufacturing PMI: 51.0 v 49.9 prior (moves into expansion after 1 month of contraction).

-(VN) Vietnam Oct Manufacturing PMI: 52.3 v 51.9 prior (16th month of expansion).

-(TH) Thailand Oct Manufacturing PMI: 54.8 v 54.3 prior (18th month of expansion).

-(TH) Thailand Tourism Ministry: Foreign Tourist Arrivals YTD: -4.59% y/y.

-(TH) Thailand sells THB20B vs. THB20B indicated in 6-month bills; Avg Yield: 0.84388% v 0.95225% prior; bid-to-cover: 1.69x v 2.92x prior.

North America

-(US) US seeks to restore Russia gas sales to Europe via Ukraine - WSJ.

-(US) Former First Lady Melania Trump: The ceasefire concludes; Mission was a success.

-(US) President Trump noted 'concept of very good deal' with Canada; On Iran, said either Iran will make a deal or we'll just 'end it', we will put it away 'soon' one way or the other - update.

-(US) FNMA Trump says Fannie and Freddie will invest $40B in Florida mortgages - Florida campaign event [weekend update].

-(US) President Trump: Fannie Mae and Freddie Mac will be investing $4.3B in Kansas mortgages next year - The President holds a political rally in Salina, Kansas [Pre-Credentialed Media], Salina Regional Airport, KS.

-(US) FHFA's Office of Inspector General finds that FHFA chief Bill Pulte interfered with the Inspector Generals (IG) office's independence and blocked its oversight of Fannie Mae and Freddie Mac - press [weekend update].

-(US) Sec of State Rubio to meet with Venezuelan Foreign Minister at 10:00am ET.

-(US) META Reportedly Meta has built a humanoid robot prototype with Chinese startup Fourier as it steps up its push into robotics - The Information.

-(US) BINANCE.IPO Spokesperson: 90% of the stolen assets have been "replenished" [weekend update].

-(US) BINANCE.IPO Follow up: Binance observes $3.64B in net outflows [~2.1% of total assets] as withdrawals resume after massive hack.

-(US) BINANCE.IPO FBI confirms North Korea was responsible for the theft of over $6B in virtual assets from Binance exchange.

-(US) BINANCE.IPO Statement: Withdrawal levels are stabilizing to what we would consider normal and expected on-chain activity. They are a very small percentage of AUM.

-(PE) Peru Oct CPI M/M: 0.6% v 0.1%e; Y/Y: 5.3% v 4.9%e.

-IMF reaches staff-level agreement with Honduras on sixth review.

Europe

-(FR) Fitch revises France outlook to Negative from Stable; Affirms A+ sovereign rating [weekend update].

-(FR) France Fin Min Lescure: Fitch ratings action underscores the need to pass the French budget; Govt is fully committed to fiscal consolidation [weekend update].

-(UR) Ukraine Pres Zelenskiy: Russia attacked Ukrainian energy facilities again, and nearly 280K Ukrainian families are without electricity [weekend update].

-(RU) Russian FSB: Have received information from the US regarding plans for a terrorist attack in Moscow; Appropriate measures are being taken - Russian press [weekend update].

-(RU) Russia Defense Ministry: Russia hit military facility in Odesa region in Ukraine - Interfax.

-(RU) Russia Ministry: Russia's emergency ministry mobile app hit by massive cyberattack - Russia Newswires.

-(UK) GS: We expect BoE to remain on hold at 4.25% throughout the middle of 2027 before cutting at a quarterly pace from 2027 Q4 to an unchanged 3.25% terminal rate.

-(UK) LLOY.UK Launches redundancy round - Times (update).

-(IE) Ireland Oct Manufacturing PMI: 55.2 v 55.5 prior (22nd month of expansion).

-(DE) German defense start-up Hypersonica raises €100M in funding - FT.

-(NO) NSG.NO To continue development of 80-100MW data centers at Saugbrugs.

Middle East

-OPEC+ reaffirmed to maintain output targets for the 3rd straight month, following the completion of the phased rollback of the 1.65M bpd voluntary cuts from 2023, as expected, commencing in December, 2026.

-Reportedly OPEC+ has an agreement in principle to maintain current production targets in December - press [weekend update].

-(IR) Reportedly Trump could resume strikes on Iran the day after the mid-term elections - MS Now [weekend update - post Friday NY close].

-(IR) President Trump: There are talks with Iran; We have time, frankly [weekend update - post Friday NY close].

-(US) Pres Trump: Iran war will end very soon, one way or another - radio interview [weekend update - post Friday NY close].

-(IR) Iran Foreign Min Araqchi: Tehran has studied US VP Vance's message and discussed it at a high level; US effort to open a broader dialogue with Tehran is a positive step [weekend update, post Fri NY close].

-(IR) Reportedly Qatari mediators returned to Iran today as part of effort to reach a US-Iran deal, mediation talks have been coordinated with US - press [weekend update - post Friday NY close].

-(IR) Iran Supreme Leader Khamenei: have ordered armed forces to respond immediately and without "geographic limits to any enemy threat" [weekend update, Post Fri NY close ].

-(IR) An "enemy" drone attacked two fishing boats 14 nautical miles south of Iran's Qeshm Island, leaving two fishermen missing and two wounded - Iran's semi-official Fars news agency [weekend update].

Levels as of 01:20am EDT

Nikkei 225 +#%; ASX 200 +#%; Hang Seng +#%; Shanghai Composite +#%; Kospi +2.%.

Equity S&P500 Futures +0.5%; Nasdaq100 +0.9%; DAX +0.3%; FTSE100 -0.1%.

EUR 1.1185-1.1149; JPY 157.99-157.44; AUD 0.7035-0.7019; NZD 0.5633-0.5609.

Gold +0.9% at $3,908/oz; BTC +0.6% at $78,394; WTI Crude Oil -3.5% at $100.49/bbl; Copper flat at $6.5123/lbs.