Asian stocks down again

Asia market update: Asian stocks down again; CN trade surplus falls on lower exports; Peak corp. earnings continue; Focus on US Nov Prelim Michigan Consumer Sentiment.

General trend and developments

- Asian stocks saw another weak day after yesterday's mild recovery, with this year’s darlings, Kospi and Nikkei, leading the fall down as much as -3.4% and -2.0% respectively.

- China’s October trade balance came in less than expected, with a drop in exports when another increase was expected. Some analysts see the fall as an indication that front-loading due to US tariffs is fading.

- In other China trade-related news US govt reportedly will also block Nvidia’s sales of ‘scaled-back’ chips to China (the B30A was mentioned specifically) - in addition to the latest and greatest models; Nvidia soon replied, reiterating that it has no sales attributed to China in its sales forecasts in any case (although it has been pushing the Trump admin to change that).

- Malaysia Ringgit rises to one-year high vs USD after Malaysian Central Bank held rates steady overnight.

- China PBOC again set the strongest Yuan fix since Oct 15th, 2024 while the PBOC also drained a Net CNY1.572T for the week via open market operations (OMO), the biggest funds withdrawal since Jan 2024.

- Philippines saw a bad miss in its Q3 GDP numbers, with the Economic Planning Minister expecting to “see some changes in targets” going forward.

- US equity FUTs +0.1% later in Asia trading.

Looking ahead (Asian-weighted releases, using Asian time zone).

- Fri Nov 7th Fri night US Nov Prelim Michigan Consumer Sentiment.

Holidays in Asia this week

- Mon Nov 3rd Japan.

- Wed Nov 5th India.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 8,816.

- Australia sells A$800M vs. A$800M indicated in 3.00% Nov 2033 bonds: Avg Yield: 4.1592% v 4.0912% prior; bid-to-cover 4.93x v 3.21x prior.

China/Hong Kong

- Hang Seng opens -0.5% at 26,350; Shanghai Composite opens -0.4% at 3,994.

- China Oct trade balance: $90.1B V $96.7BE.

- China Oct trade balance (CNY): 640.5B V 645.5B prior.

- China Banks' NIMs are expected to stabilize, according to analysts; funding costs are expected to decline - China Securities Journal.

- China MOF sells 1-year and 2-year bonds.

- Honda: Said to delay new EV launch in China due to price concerns - Nikkei.

- EU said to warn it lacks near-term power to sway China on rare earths access – press [overnight update].

- China's Vice Prem He Lifeng: Prepared to work with EU to explore trade agreements [overnight update].

- China MOFCOM: China committed to stability, security of global chip industry - press (inline) [overnight update].

- China PBOC sets Yuan reference rate: 7.0836 v 7.0865 prior [strongest since Oct 15th, 2024].

- China PBOC Open Market Operation (OMO): Injects CNY142B in 7-day Reverse Repos; Net drains CNY213B v drains CNY250B prior.

- China PBOC Drains a Net CNY1.572T for the week via open market operations (OMO), biggest fund withdrawal since Jan 2024 - US financial press.

Japan

- Nikkei 225 opens -0.7% at 50,540.

- Japan Sept Household Spending Y/Y: 1.8% v 2.5%e.

- Japan releases weekly flows data [period ended Oct 31st]: Foreign buying of Japan equities: ¥690.1B v ¥1.35T prior ; Japan buying of foreign bonds: -¥354.4 v -¥354.6B prior.

- Japan sells ¥4.3T vs. ¥4.3T indicated in 3-Month Bills ; Avg Yield: 0.4713% v 0.4690% prior; Bid-to-cover: 3.14x v 3.63x prior.

- Japan MOF sells ¥648.9B v ¥650B indicated of JGBs in liquidity enhancement auction.

- Follow Up: Japan Fin Min Katayama: FSA decides to support 3 megabanks' project to jointly issue stablecoin.

- Japan Finance Ministry Quarterly Report: Maintains overall assessment that domestic economy showing mild recovery despite lingering weakness [overnight update].

Korea

- Kospi opens -1.6% at 3,963.

- Japan govt reports that North Korea may have fired a ballistic missile- Press.

Other Asia

- Malaysia Sept Industrial Production Y/Y: 5.7% v 5.4%e.

- Indonesia Central Bank (BI): BI floating rate note will carry tenor of 1 month to 12 months.

- Philippines Econ Planning Min Balisacan: Working on various levers to recover lost ground.

- Philippines Q3 GDP Q/Q: 0.4% v 0.8%e; Y/Y: 4.0% v 5.2%e [4.0% slowest since Q1, 2021].

- Malaysia central bank (BNM) leaves overnight rate unchanged at 2.75%; as expected [overnight update].

- Taiwan Oct CPI Y/Y: 1.5% v 1.4%e [overnight update].

North America

- (US) Pres Trump announces trade deal with Uzbekistan - WSJ.

- US to block Nvdia's sale of "scaled-back" AI chips to China - The Information.

- Tesla CEO Musk: Production of Roadster 2 will be 12-18 months after unveiling which will be on Apr 1st.

- (US) Trump Admin finalizes flight cuts to begin at 4% tomorrow and will ramp up to 10% on Nov 14th.

- (US) CBO (Congressional Budget Office) said to have been hacked by suspected foreign actor - press.

- (US) USTR Greer: Justices had fair and tough questions at tariffs arguments [overnight update].

- (US) Oct Challenger Job Cuts: +153.1K v 54.1 prior;; Y/Y: +175.3% v -25.8% prior - early release.

- (US) Chicago Fed: Estimate October Unemployment at 4.4%.

- (US) Fed's Goolsbee (voter for 2025; non-voter in 2026): Most labor market indicators show stability - CNBC.

- (US) FAA working to finalize details of flight cuts at major US airports scheduled to start tomorrow; Flight capacity cuts may begin as early as 6:00AM ET on Fri - press (as expected).

- (US) Weekly EIA Natural Gas inventories: +33 BCF VS. +33 BCF to +35 BCF indicated range.

- (US) Fed Williams (voter): Natural rate of interest is hard to pin down; Model-derived US neutral rate estimates are ~1%.

- (US) Fed's Barr (voter): Progress has been made on inflation, but there's still more work to do.

- (US) Trump's AI Czar David Sacks: There will be no federal bailout for AI. The U.S. has at least 5 major frontier model companies. If one fails, others will take its place - 'X' post.

- (US) Fed's Hammack (hawk, non-voter for 2025; voter in 2026): Not obvious monetary policy should do more at this time.

- (US) US Pres Trump: Confirms Eli Lily and Novo Nordisk deal; Zepbound and Wegovy prices will be cut; Expects new versions of GLP-1 to come soon; Americans should pay lowest global prices for drugs.

- (US) Fed's Miran (FOMC voter, dovish dissenter): Expect Fed will cut in Dec; Want to get to neutral in 50bps increments - podcast interview.

- (US) US Pres Trump: Will need a game two plan if Supreme Court case on tariffs doesn't go well; Has no intention on announcing new tariffs while the case is pending.

- (MX) Mexico central bank (Banxico) cuts overnight rate by 25bps to 7.25%; as expected; Board was not unanimous.

Europe

- (UK) Bank of England (BoE) leaves bank rate unchanged at 4.00%; as expected.

- (UK) BoE Oct minutes: Voted 5-4 on policy; Breeden, Dhingra, Ramsden and Taylor voted for cut (more dovish dissenters than usual); Risks from weaker demand now more apparent.

- (UK) BOE Gov Bailey: On gradual downward path for interest rates - post rate decision press conference.

- (CZ) CZECH central bank (CNB) leaves 2-week repurchase rate unchanged at 3.50%; as expected.

- (PL) Poland Central Bank (NBP) Gov Glapinski: We do not announce a path for rates, further decisions will depend on data; Already substantially eased policy this year; Rates could lightly fall or increase from here - post rate decision press conference.

- UBS Group AG. UBS to liquidate funds with $500M in First Brands exposure - FT.

- (RU) Russian oil is reportedly trading in India and China at the biggest discount in a year, under pressure of latest Western sanctions - press.

Levels as of 01:20 ET

- Nikkei 225 -1.6%, ASX 200 -0.8%, Hang Seng -1.1%; Shanghai Composite -0.1%; Kospi -2.6%.

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

- EUR 1.1532-1.1552; JPY 152.82-153.31; AUD 0.6468-0.6486; NZD 0.5615-5641.

- Gold +0.4% at $4,005/oz; BTC -0.7% at $102,600; Crude Oil +0.5% at $59.74bbl; Copper +0.1% at $4.9785/lb.