FX in focus in Asia as KR talks up KRW, UK govt to abandon tax rates for budget?

Asia Market Update: FX in focus in Asia as KR talks up KRW; UK govt to abandon tax rates for budget?; CN gives another poor 'data dump'.

General trend and developments

- South Korea to discuss FX stabilization measures to stabilize the currency market, including with the National Pension Fund. Korean won prior again fell to 1,475, testing yesterday’s and February’s multi-year lows, then with the announcement spiked back to 1,457 vs USD.

- South Korea and the White House released their finalized trade Fact Sheet. Confirmed to collaborate in shipbuilding, AI, and defense spending by Korea of US military items - including allowing South Korea to build military ships in the US and Korea's building of a nuclear-powered submarine.

- Korea's yearly investment amount reduced to $20B year, less the implied $25B per year ($200B investment paid over 8 years) stated by US Commerce Sec Lutnick previously.

- Kiwi dollar +0.7% vs USD, coming back from a multi-year low 116 handle vs AUD to pierce back into 114 handle.

- Early in the Asia session reports UK PM Starmer and Chancellor Reeves said to abandon plan to increase income tax rates in the Autumn budget on Nov 26th. Pound Sterling lost its overnight gains against the USD.

- China’s ‘data dump’ for October continued to show poor outcomes, with Industrial output less than 5%, Retail Sales less than 3% and a continued fall in Fixed Urban Assets along with a seemingly never-ending fall in property investment and new/used homes. China Stats Bureau noted that intense competition impacted firms’ profitability.

- Liquidity issues hit Bitcoin hardest, -5% down to $97K.

- Asian equities followed US equities down, with the high-flying Kospi hit hardest, again -3.8%.

- Japanese PM and other officials were not drawn on levels of stimulus or where Yen intervention might be applied again. BoJ OIS chances of a 25bp hike in December fell to 38.0%, vs 48.5% on Wed.

- US equity FUTs -0.1% to -0.3% during Asian trading.

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

- Fri Nov 14th CN Oct New Yuan Loans, Aggregate Financing,H FDI.

Holidays in Asia this week

- No holidays in Asia this week.

Headlines/economic data

Australia/New Zealand

- ASX 200 -1.5% at 8,620.

- Australia sells A$800M v A$800M indicated in 1.75% Nov 2032 bonds; Avg Yield: 4.1987% v 3.9441% prior; bid-to-cover: 4.10x v 3.35x prior.

- New Zealand Oct Manufacturing PMI: 51.4 v 49.9 prior (moves back into expansion after two months of contraction).

- RBNZ confirms to ease mortgage loan-to-value ratio (LVR) restrictions, as announced Oct 14th.

China/Hong Kong

- Hang Seng opens -1.5% at 26,660; Shanghai Composite opens -0.6% at 4,007.

- NBS [China stats agency] Spokesperson: October shows economy generally stable, with improving new growth drivers - comments on Oct data.

- CHINA OCT INDUSTRIAL PRODUCTION Y/Y: 4.9% V 5.5%E.

- CHINA OCT RETAIL SALES Y/Y: 2.9% V 2.8%E].

- CHINA OCT YTD FIXED URBAN ASSETS Y/Y: -1.7% V -0.8%E.

- China Oct YTD Property Investment Y/Y: -14.7% v -14.5%e.

- China Oct Surveyed Jobless Rate: 5.1% v 5.2%e.

- China Oct New Home Prices M/M: -0.5% v -0.4% prior.

- Amazon and Microsoft said to back efforts that would restrict Nvdia's exports to China; Anthropic also supporting the Gain AI Act – WSJ.

- China PBOC's Tao Ling: Firms are more willing to use Yuan for financing.

- China former Fin Min Lou: need to increase fiscal deficit to support reforms.

- Nexperia clients said to be in discussions to independently ship wafers for packaging in Dongguan chip plant to that they can bypass the tension between EU and China units of Nexperia - press.

- Anthropic: Chinese hackers fooled Claude AI tool into orchestrating and conducting attacks, doing 80-90% of the work; Anthropic Disrupted hacking campaigns - WSJ.

- CHINA OCT YTD AGGREGATE FINANCING (CNY): 30.90T V 31.26TE [overnight update].

- CHINA OCT M2 MONEY SUPPLY Y/Y: 8.2% V 8.1%E [overnight update].

- CHINA OCT YTD NEW YUAN LOANS (CNY): 14.97T V 15.25TE [overnight update].

- JD.com Reports Q3 $0.52 v $0.46e (2 est), Rev $42.0B v $41.3Be; Notes healthy progress across business lines, number of annual active customers surpassed a new milestone of 700M in October [overnight update].

- Reports Q3 (CNY) adj Net 70.6B v 66.0Be, Op 72.6B v 61.3B y/y, Rev 192.9B v 188.8Be [overnight update].

- China MOF sells 10-year and 30-year ultra-long bonds.

- China PBOC sets Yuan reference rate: 7.0825 v 7.0865 prior (strongest since Oct 14th, 2024).

- China PBOC Open Market Operation (OMO): Injects CNY213B in 7-day Reverse Repos; Net injects CNY71B v injects CNY97B prior.

Japan

- Nikkei 225 opens -1% at 50,635.

- Japan Sept Tertiary Industry Index M/M: 0.3% v 0.3%e.

- Japan PM Takaichi: Hard to set numerical target for minimum wage presently - financial press.

- Japan Economic Revitalization Min Kiuchi: Economic measures should be about what's needed and not its scale; A weak Yen has effect of pushing up prices, we're continuing to monitor the effects.

- Japan Fin Min Katayama: Planned economic stimulus will be in line with Takaichi's proactive fiscal policy (in response to stimulus size).

- Japan sells ¥4.3T vs. ¥4.3T indicated in 3-Month Bills ; Avg Yield: 0.4529% v 0.4713% prior; Bid-to-cover: 3.00x v 3.14x prior.

Korea

- Kospi opens -2.6% to 4,061.

- South Korea Oct Export Price Index M/M: 4.1% v 0.6% prior; Y/Y: 4.8% v 2.2% prior.

- South Korea to discuss FX stabilization measures; To discuss measures to stabilize the currency market with national pension.

- Bank of Korea (BOK) Official: Pace of [market] interest rate rises is too rapid; commented on possible market stabilization measures such as 'direct purchases' - financial press.

- South Korea Pres Lee: Notes that Fact Sheet for US-Korea trade now finalized; US Pres Trump made 'rational decision' for Fact Sheet - financial press.

- South Korea sells 50-year Bonds: Avg Yield: 3.205%.

Other Asia

- (IN) India, Canada agreed to encourage long-term supply chain partnerships in critical minerals and clean energy collaboration – statement.

- Malaysia Central Bank (BNM): Concerns over US economy, easing of tariff uncertainties to continue support ringgit

- Malaysia Q3 GDP Q/Q: 2.4% v 2.1%e; Y/Y (final): 5.2% v 5.2%e.

- Thailand Oct Consumer Confidence: 51.9 v 50.7 prior.

- (TW) US approves potential $330M military sale of fighter jet spare parts to Taiwan - financial press
[overnight update].

North America

- US is reportedly preparing for some tariff exemptions to lower food prices, which may include beef and citrus products, and would apply to certain reciprocal tariffs - NYT.

- (US) Fed's Hammack (hawk, non-voter for 2025; voter in 2026): Worried about the labor market; High inflation is sticking around - press interview.

- (US) White House NEC Dir Hassett: Going to get half of the Oct jobs report, won't include unemployment rate - Fox News

- (US) Fed's Kashkari (non-voter in 2025; voter in 2026): Inflation still too high at 3%; See mixed signals from economy; Some sectors of labor market look under pressure - speech text.

- *(US) TREASURY $25B 30-YEAR BOND AUCTION DRAWS 4.694% V 4.813% PRIOR; BID TO COVER 2.29 V 2.27 PRIOR AND 2.40 OVER THE LAST FOUR AUCTIONS.

- (US) DOJ sues to block California's US House Congressional redistricting map - press.

- (US) Fed's Hammack (non-voter for 2025; voter in 2026): Anecdotal data has been important during govt shutdown; Expects be above target inflation for the next two or three years; Current monetary policy is 'barely restrictive' if at all

- (US) Fed's Kashkari (non-voter in 2025; voter in 2026): Inflation still too high at 3%; See mixed signals from economy; Some sectors of labor market look under pressure - speech text.

- (US) Fed's Daly (non-voter in 2025 & 2026): Still have work to do to bring inflation down to 2% target; Premature to definitely say a cut or not cut in Dec.

Europe

- (DE) German Budget Committee approves 2026 Budget, as expected.

- (CH) US and Switzerland said to 'close in' on trade deal; details were not disclosed - financial press [update].

- UK PM Starmer and Chancellor Reeves said to abandon plan to increase income tax rates – FT.

- (IE) Ireland Oct CPI M/M: +0.5% v -0.2% prior; Y/Y: 2.9% v 2.7% prior.

- (PT) Portugal Q3 Labour Costs Y/Y: 4.7% v 5.5% prio.

- (ES) Bank of Spain (BdE) publishes Financial Stability Report: Urge govt to control spending and curb debt.

- (EU) EU officials said to consider pooling US$ reserves to reduce reliance on US Fed; Concerns arose around April 2025 and then dissipated due to Fed reassuring them - press.

Levels as of 01:20 ET

- Nikkei 225 -1.7%, ASX 200 -1.4%, Hang Seng -1.5%; Shanghai Composite -0.3%; Kospi -3.8%.

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

- EUR 1.1624-1.116.46; JPY 154.31-154.75; AUD 0.6524-0.6550; NZD 0.5642--5692.

- Gold -0.1% at $4,190/oz; BTC -5.4% at $97,731; Crude Oil +1.6% at $59.64bbl; Copper +0.1% at $5.0608/lb.