KR equities initially led as Asia tech rally extends, then falters

Asia market update: KR equities initially led as Asia tech rally extends, then falters; Second thoughts as US govt moves to reopen?

General trend and developments

- Korean chipmakers Hynix initially rose up another +4.6% and Samsung +4.8% with the Kospi up another 3% in early trading, re-threatening its all-time highs of last week following Nvida up over 5% during the US session. However, mid-session, KR and JP equities lost most if not all gains to the downside on no particular trigger. Change in sentiment following the weekend 'good news'?

- US Senate confirms to vote 60-40 to reopen the US government. House may vote as early as Wednesday to pass the bill.

- Australian Nov Consumer Confidence came in at a 7-year high of nearly 104, the first positive read for the Index (>100) since 2022; Westpac noted the jump comes despite reduced confidence in lower rates.

- While Australia NAB Business Confidence fell in October by a point, at a read of 6 the Index is still above its long-term average while Business Conditions ticked up to 9, highest since Mar 2024. [NAB’s Chief Economist said the positive trend in business conditions suggests the economy has held onto the momentum gained since late 2024].

- USD/JPY moved back to February highs, as Japan’s Economic Revitalization Min Kiuchi warned that a weaker Yen is pushing prices up through higher import costs.

- Japan PM Takaichi overnight continued to put her stamp on a new economic direction for Japan by proposing a multi-year budget commitment to boost investment, Comments came as the Japan growth panel recommended higher revenues without tax hikes, said to include chips, critical minerals and the defense sector, with the package to be finalized by Nov 21st.

- The potential Japan econ plan likely to be funded by extra bond issuance may have contributed to today’s 30-year JGB auction seeing a softer yield than October, and below the 12-month average with the tail at a fairly wide 27bps. 30-year yields doubled their earlier gains to be up 4bps to 3.17%.

- Meanwhile Japan’s Current Account balance came in at a record high at ¥4.48T, beating out Feb 2025's prior high.

- South Korea’s first 10 days of November saw a recovery in exports and imports after the shock falls for the same period last month. Exports for chips, ships and autos continue to propel overall exports.

- New Zealand Q4 Inflation Expectations tracked within target range and inline with the prior quarter, in an index watched closely by the RBNZ, which has now cut eight times by a total of 325bps, including a 50bps cut in October.

- Australia’s CBA bank fell 4% despite Q1 results being largely inline.

- In trade-related news, China said to be creating a ‘validated end-user’ for fast track rare earth exports for US non-defense names and to keep its rare earth magnets out of the US military’s hands.

- Gold and Silver continued gains on yesterday’s outsize recovery, with Gold now having taken back half of its recent losses from all-time highs and silver well entrenched back above $50/oz.

- US equity FUTs -0.1% to -0.2% during Asian trading.

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

- Tue Nov 11th DE ZEW Econ Sentiment.

- Wed Nov 12th KR jobs, AU Q3 Home Loans, IN Oct CPI.

- Thu Nov 13th AU Oct Jobs, (Thu eve UK Q3 prelim GDP).

- Fri Nov 14th NZ Oct Business PMI, CN Oct data dump.

Holidays in Asia this week

- No holidays in Asia this week.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.3% at 8,861.

- Australia Nov Westpac Consumer Confidence: 103.8 v 92.1 prior (7-year high).

- Australia Oct NAB Business Confidence: 6 v 7 prior; Business Conditions: 9 v 8 prior (highest since March, 2024).

- Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 83.5 v 84.5 prior (update).

- New Zealand Q4 Inflation Expectation Survey 2-year Outlook: 2.3% v 2.3% prior.

China/Hong Kong

- Hang Seng opens +0.4% at 26,748; Shanghai Composite opens +0.1% at 4,023.

- China to create 'validated end-user' system for fast tracking US exports of rare earths for nondefense firms - WSJ.

- China issues measures to enhance private investment; To clean up unreasonable access restrictions for services sector; To increase procurement support so small and medium firms - Chinese press [overnight update].

- China PBOC sets Yuan reference rate: 7.0866 v 7.0856 prior.

- China PBOC Open Market Operation (OMO): Injects CNY404B in 7-day Reverse Repos; Net injects CNY286B v injects CNY42B prior.

Japan

- Nikkei 225 opens +0.8% at 51,310.

- Japan Sept Current Account Balance: ¥4.483T v ¥2.456Te.

- Japan Oct Bank Lending Y/Y: 4.1% v 3.8% prior.

- Japan Oct 1-20 Exports Y/Y: +0.3%; Imports -1.6% (provisional) - update.

- Japan sells ¥700B VS. ¥700B indicated in 30-yearJGB bonds; AVG yield: 3.1660% V 3.248% prior; bid-to-cover: 3.12X V 3.41X prior (lower than 12-month avg 3.38x).

- Japan 30-year JGB yield rises by 4bps to 3.170% (extending rise since 30-year auction).

- Japan Fin Min Katayama: Difficult to calculate Primary Balance outlook at this point - financial press.

- Reportedly Japan govt considering allowing use of public funds for nuclear projects - Nikkei.

- Japan releases growth panel recommendations for economic package; Aiming for higher revenue without tax hikes; Expected finalization by Nov 21stl; Said to be considering chips, critical minerals and defense sector in the package [overnight update].

- Former BOJ board member Kataoka: Exit from deflation is imminent; Need to firmly use fiscal policy.

- Japan PM Takaichi: Want multi-year budget commitment to boost investment [overnight update].

Korea

- Kospi opens +1.3% at 4,124.

- South Korea Nov 1-10th Exports Y/Y: +6.4% v -15.2% prior; Imports Y/Y: +8.2%v -22.8% prior.

- South Korea reportedly aims to cut greenhouse gas emissions by 53-61% by 2035 – press [overnight update].

Other Asia

- Philippine stock index hits lowest since late-late May, 2020.

- Indonesia Sept Retail Sales Y/Y: 3.7%.

North America

- Anthropic expects to turn a profit by 2028, sooner than OpenAI - WSJ, citing documents.

- (US) Senate votes 60-40 to pass legislation to reopen US Federal govt- financial press.

- (US) Fed's Daly (non-voter in 2025 & 2026): Policymakers need to keep an open mind about further cuts; Slowing payroll growth in the U.S. is likely due more to weaker demand for workers than the drop in the labor force from tightened immigration policy.

- (US) House Speaker Johnson reportedly expects House back early this week - press.

- (US) Energy Sec Wright: Largest use of Dept of Energy's loan programs office will be for nuclear power plants.

- (US) Fed's Musalem (voter in 2025; non-voter in 2026): Limited room for Fed to ease policy further; Monetary policy closer to neutral than it is to modestly restrictive - TV interview.

- (US) US Pres Trump: All air traffic controllers must get back to work now; Any not working will be 'Docked'; Recommends $10K bonus for distinguished service.

- (US) Fed's Miran (FOMC voter, dovish dissenter): Data since Sep FOMC suggest the Fed should be incrementally more dovish - CNBC.

- (US) Senate Maj Leader Thune: Vote on the stopgap bill is still in a holding pattern; Unclear if the vote will happen today.

- (US) Treasury's $58b 3-year note auction results: Draws 3.579% v 3.576% prior; btc 2.85 v 2.66 prior and 2.61 over the last 8 auctions.

Europe

- (IE) Ireland Oct Construction PMI: 48.1 v 43.7 prior.

- (UK) Oct BRC Sales Like-For-Like Y/Y: 1.5% v 2.0% prior.

- (IS) Iceland Oct Unemployment Rate: 3.9% v 3.5% prior.

- (UK) Chancellor Reeves: Looking at both taxes and spending in budget; Have not made final decision yet on budget.

Levels as of 01:20 ET

- Nikkei 225 -0.5%, ASX 200 -0.2%, Hang Seng -0.4%; Shanghai Composite -0.5%; Kospi +0.1%.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.2%; DAX +0.3%; FTSE100 +0.2%.

- EUR 1.1547-1.1564; JPY 154.05-154.49; AUD 0.6519-0.6538; NZD 0.5635--5650.

- Gold +0.6% at $4,144/oz; BTC -0.6% at $105,490; Crude Oil -0.3% at $59.94bbl; Copper -0.3% at $5.0790/lb.