Asia Market Update: Odds on ‘Trump Trades’ narrow following US election betting odds tightening; Positive if cautious Asian equities with JP on holiday; Focus on US election volatility.

General trend

- Currencies opened the week up +0.4% to +0.7% and continued to strengthen against USD on jitters ahead of US election as betting odds tighten between Harris and Trump (falls to 54% for Trump) amid main-stream media reports of Harris taking a polling lead in Iowa (prior to expected to fall for Trump).

- US rates initially fell Friday night on Oct non-farm payrolls being only marginally positive, below all estimates and lowest since Dec 2020. However, rates shook off the low jobs to shoot back up >16bps to just shy of 4.40% (levels last seen early July). US election remains front and center.

- WTI crude opened up +1.5%, back over $70, after more inflammatory rhetoric from Iran saying its response to Israel’s attack last week would be ‘strong and complex’, as well as follow up reporting that OPEC+ said to have confirmed to agree to delay planned Dec 2024 oil output increase by one month.

- Kospi in South Korea outperformed +1.6% in generally cautious and slightly positive Asian trading, with most gains coming after the South Korean opposition party finally agreed with the minority govt to scrap the financial investment income tax.

- China NPC bi-monthly Standing Committee Meeting starts today, finishes Nov 8th; Stimulus measures confirmation expected to be announced.

- Berkshire reported over the weekend more sales of Apple stock during Q3 (100M shares). Has now sold 2/3 of all their Apple stock this year (905M down to 300M).

- May be a good week for Nvidia, with elevation to the Dow Jones Industrial Averages from Nov 8th (replacing Intel).

- US equity FUTs +0.2% to +0.3% during the Asia session.

Looking ahead (Asian time zone)

- Mon Nov 4th CN NPC Standing Committee Meeting starts (NPC-SCM).

- Tue Nov 5th CN NPC-SCM, AU RBA Rates & SOMP, KR Oct CPI, CN Caixin Service PMI, (Tue night/Wed morning US Elections, US Oct Services ISM).

- Wed Nov 6th CN NPC-SCM, JP BOJ MPM Minutes, US Elections results continue through Wed Asia time,

- Thu Nov 7th CN NPC-SCM, AU Sept Trade Bal, Sept JP Wage numbers, CN Trade Bal, (Thu night BOE & FOMC policy decisions).

- Fri Nov 8th CN NPC-SCM Final Day, (Fri night US Nov prelim Michigan Consumer Sentiment).

- Sat Nov 9th CN CPI/PPI.

Holidays in Asia this week

- Mon Nov 4th Japan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 8,129.

- Australia Oct ANZ-Indeed Job Advertisements M/M: 0.3% v 2.3% prior (revised higher).

- Australia Oct Melbourne Institute Inflation M/M: 0.3% v 0.1% prior; Y/Y: 3.0% v 2.6% prior [highest annualized pace since Jun].

- Australia sells A$700M v A$700M indicated in 2.75% Nov 2027 bonds; Avg Yield: 4.0313% v 3.5782 prior ; bid-to-cover 3.54x v 4.47x prior.

- Follow-up: China MOFCOM told French Foreign Trade Delegation on Sunday that the Chinese investigation on brandy, pork and dairy products launched in accordance with domestic industry's applications, and that the EU's investigation on China's EVs 'seriously hinders' China-EU auto industry cooperation - Ministry statement.

- China PBOC: Outstanding pledged supplementary lending facility (CNY) at 2.50T at end-Oct v 2.58T at end-Sept [weekend update].

- Hong Kong Sept Retail Sales Volume Y/Y: -8.7% v -10.7%e; Retail Sales Value Y/Y: -6.9% v -9.0% [weekend update].

China/Hong Kong

- Hang Seng opens +0.4% at 20,584; Shanghai Composite opens +0.1% at 3,275.

- Shanghai to provide CNY15.0K in one-time purchase subsidies for individual buyers of new ‘pure’ EV priced >CNY50.0K; effective from Nov 1 to Dec 31st – financial press [update].

- China Yuan exchange rate expected to 'stay stable' during Q4 - Chinese press.

- TTN Research Alert: China Sept/Oct PBoC monetary policy decisions and recent history as at Nov 3rd, 2024.

- Reports Oct Vehicle Unit Sales 502.7K v 301.8K y/y v 419.4K m/m; Follow up: BYD Exec VP He Zhiqi; Raised production by nearly 200K units from Aug to Oct; New hires for car-making and components close to 200K employees [weekend update].

- China PBOC sets Yuan reference rate: 7.1203 v 7.1135 prior.

- China PBOC Open Market Operation (OMO): Injects CNY17B in 7-day reverse repos; Net drains CNY225B v net drains CNY276B prior.

Japan

- Nikkei 225 closed for holiday.

- Japan DPP Party (opposition) Chief Tamaki: BOJ should not raise interest rate for at least half a year; [weekend update].

- Japan Economy Min Akazawa: Reiterates specifics of monetary policy should be left to BOJ [weekend update].

- Japan govt plans bonds backed by NTT shares to aid domestic chipmakers like Rapidus - Nikkei [weekend update].

- Japan reportedly plans to issue bonds backed by govt held assets - Nikkei [weekend update].

Korea

- Kospi opens +0.3% at 2,549.

- South Korea Pres Yoon: Domestic economy now on its way to 'new heights'; exports expected to reach a record in 2024, Current Account surplus to exceed $70.0B - speech to parliament.

- Follow up: South Korea opposition party's leader Lee says agrees to govt's plan to scrap financial investment income tax - financial press.

Other Asia

- India Oct Final Manufacturing PMI: 57.5 v 57.4 prelim (confirms 40th month of expansion).

- US tech trade body warns Vietnam parliament against proposed new data law - financial press.

- Philippines Oct PMI Manufacturing: 52.9 v 53.7 prior (14 month of expansion).

North America

- AAPL Berkshire Hathaway sold further 100M shares of Apple in Q3; Reduced stake 300M vs 905M shares at start of 2024 - financial press, citing Berkshire's Q3 10-Q.

- Nvidia and Sherwin-Williams to replace Intel and Dow on DJIA [weekend update].

- (US) OCT ISM MANUFACTURING: 46.5 V 47.6E (Lowest since June 2023) [weekend update].

- (US) SEPT CONSTRUCTION SPENDING M/M: 0.1% V 0.0%E [weekend update].

- (US) OCT FINAL S&P MANUFACTURING PMI: 48.5 V 47.8E [weekend update].

- (US) OCT AVERAGE HOURLY EARNINGS M/M: 0.4% V 0.3%E; Y/Y: 4.0% V 4.0%E [weekend update].

- (US) OCT UNEMPLOYMENT RATE: 4.1% V 4.1%E [weekend update].

- *(US) OCT CHANGE IN NONFARM PAYROLLS: +12K V +100KE (below all estimates and lowest since Dec 2020); Private Payrolls: -28K v +70Ke [weekend update].

Europe

- (IR) Follow up: Iran reportedly tells region that a 'Strong and Complex' attack to come on Israel; Response will involve 'more than just missiles' and any missiles used will carry 'larger warheads'- WSJ (update).

- (EU) Moldova EU Presidential Election: Pro-EU incumbent Pres Sandu with 50.3% currently leading second round voting, Stoianoglo has 49.7%.

- Follow up: OPEC+ said to have confirmed to agree to delay planned Dec 2024 oil output increase by one month - financial press, citing sources.

- (CH) SWISS OCT CPI M/M: -0.1% V 0.0%E; Y/Y: 0.6% V 0.8%E (lowest since June 2021) [weekend update].

- (UK) OCT NATIONWIDE HOUSE PRICE INDEX M/M: 0.1% V 0.3%E; Y/Y: 2.4% V 2.8%E [weekend update].

- (UK) OCT FINAL MANUFACTURING PMI: 49.9 V 50.3 PRELIM (1st contraction in 6 months) [weekend update].

- (IR) Iran Supreme Leader Advisor Kharrazi: Iran will certainly respond to the Israeli aggression at the appropriate time; Changing its nuclear doctrine is still on table if Iran faces an existential threat [weekend update].

Levels as of 01:20 ET

- Nikkei 225 closed, ASX 200 +0.6%, Hang Seng flat; Shanghai Composite +0.3%; Kospi +1.5%.

- Equity S&P500 Futures +0.2%; Nasdaq100 +0.4%; Dax flat; FTSE100 -0.1%.

- EUR 1.070-1.0905; JPY 151.60-152.58; AUD 0.6585-0.6620; NZD 0.5977-0.6016.

- Gold +0.1% at $2,771/oz; Crude Oil +1.9% at $70.77/brl; Copper +0.8% at $4.4047/lb.

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