Apple’s margins and China results in focus as big tech floods the capital markets in early November

Asia market update: CN officials drive market vol pre US midterm elections; Apple’s margins and China results in focus as Big TECH floods the capital markets in early Nov; Is the RBA done?

General trends and developments

- The upcoming US midterm elections and today’s Japanese market holiday have left markets directionless. Apple’s shares declined by >2% afterhours following its earnings. Focal points included weak margin guidance and Chinese results.

- Chinese equities have subdued reaction to the recently announced market support measures [including incentives for corporate stock buybacks]: Sentiment was briefly helped by the NDRC pledging ‘extraordinary’ support measures for key technology breakthroughs, without being specific. Nonetheless, Chinese equity sentiment has remained cautious ahead of the US midterm elections and amid local corporate bond market concerns [including Zhuhai Huafa]. Equity investors are, perhaps. seeking more aggressive measures. Recall, a $280B equity market stabilization fund was speculated during late 2024. Chinese and Hong Kong-listed oil stocks declined following the weakening of the yuan. China Petroleum & Chemical Corporation (600028.CN) shares declined by -4.6% and Cnooc (600938.CN) shares declined by -4.9% in Shanghai, while Sinopec (600688.CN) shares declined by -4.9% in Hong Kong.

- Following the recently announced jumbo capital raises announced by various tech firms, Goldman Sachs CEO Solomon said ‘good companies come to market with good stories and there is plenty of capital to support those stories.’ On Monday, alone, Meta, Google and Oracle all announced plans to tap the capital markets. Recall, TTN has previously commented on the global race for capital among AI firms. Anthropic is expected to price its IPO after mid-Nov.

- Crude Oil FUTs trade cautiously after Monday’s rout, ahead of Tuesday’s midterm elections in the US: President Trump offered only vague and inline remarks in his interview with Fox News. Meanwhile, election disputes and data centers remain among the focal points for the upcoming elections. Thus, US courts have remained active ahead of the elections in the face of election fraud concerns.

- Is the RBA signaling a short pause or even a peak in the cash rate? Today’s expected rate hike appears to be additional front-loaded tightening by the RBA in order to prevent higher inflation from becoming embedded. Some may, also, view today’s move as a ‘dovish hike’ given the multiple dissenters on the RBA’s board. Incidentally, the central bank’s current terminal rate is only 4.90% [vs. the 4.85% cash rate]. Aussie 3-year yields initially declined after the decision.

- Asian FX offered after PBOC move to weaken the Yuan: The PBOC decided to raise the FX reserve requirement ratio (RRR) by +200bps, raising it to 4.00% (vs. 6.00% prior) effective on November 15th, 2026. Concurrently, CNH offshore yuan extended declines to 6.6588/USD. The central bank also fixed the onshore yuan mid-point at a marginally weaker 6.7150 (vs. 6.7146 prior)

-US equity FUTs -0.1% to +0.1% during Asia trading.

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

- 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

-ASX 200 Index opens +0.5% at 8,904.

- Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 66.2 v 67.9 prior.

- Reserve Bank of Australia (RBA) raises cash rate target by 25bps to 4.85%; as expected; three members dissented for steady policy.

- RBA statement on monetary policy (SOMP) (aka quarterly forecasts): the risks to the inflation outlook remain skewed to the upside; raises Jun 2027 rate assumption from 4.50% to 4.90%

- RBA Gov Bullock: Rate rise was needed to get inflation down; don't know what next rate move will be, thus confirms not offering forward rate; not definitely raising rates again but preserving options - post rate decision press conference

- New Zealand Sept Building Permits M/M: -7.9% v +5.3% prior.

China/Hong Kong

-Shanghai Composite Index opens -0.4% at 3,625; (HK) Hang Seng Index opens +0.3% at 23,469.

-CHINA PBOC TO RAISE FX RESERVE REQUIREMENT RATIO (RRR) BY +200BPS.

-China Vice Premier He Lifeng: Economic momentum shifting to new drivers. Views Hong Kong's 5-year plan with utmost confidence. Will continue to offer full support for Hong Kong - Hong Kong Summit

-CNH weakens on PBOC move; AUD also in focus amid the China/Australia trade relationship, RBA decision due later today.

- China PBOC Open Market Operation (OMO): Sells CNY1.08T in 1-day Overnight Reverse Repo & 7-day Reverse Repos; Net drains CNY332B v drains CNY515B prior.

- PBOC cuts stock buyback relending rate by 25bps to 1.00% [EU market close].

- HKMA Chief Executive Eddie Yue: Expects "nice" performance from exchange fund; todays Q3 GDP number will be 'good'.

- China PBOC Dep Gov Zou Lan: China to support deeper CNY pool in Hong Kong.

- China PBOC sets the yuan mid-point at 6.7150 v 6.7146 prior.

- China Securities Regulator (CSRC) Vice Chairman Li: China to maintain stable capital market.

- Major oil companies' stocks decline in Hong Kong, China; energy names also weaker in Australia after WTI Crude FUTs dropped by >8% on Monday; focal points have included the diplomatic efforts related to Iran, Tues US midterm elections

- Hong Kong Deputy Governor: Will continue to promote transformation of monetary policy framework. Will consolidate Hong Kong’s position as an offshore yuan business hub.

- China Commerce Ministry (MOFCOM): Both sides exchanged views on topics such as China-US economic and trade relations and China-US agricultural product trade cooperation.

- China sells 1-month and 3-month bills

- PBOC conducted CNY100B equity swap facility operation with financial institutions (as expected), effective November 3rd.

- Nvidia [NVDA]: Said to have instructed data center clients to make majority of their clients 'non-Chinese' - FT.

Japan

- (JP) Nikkei 225 Index closed for the "Culture Day" holidays.

- (JP) Japan considers certifying level 4 steering-wheel-free cars - Nikkei (update).

Korea

- Kospi Index opens -2.5% at 5,715.

- SOUTH KOREA OCT CPI M/M: 0.2% V 0.3%E; Y/Y: 2.8% V 2.8%E.

- Bank of Korea (BOK) sees November inflation staying in high 2% range - Statement.

- South Korea President Lee: Comprehensive measures needed to address hacking threats.

- Follow up: South Korea National Intelligence Service begins cybersecurity inspections at 2,100 government agencies nationwide - Media.

- (KR) South Korea Finance Ministry sells KRW2.0T vs. KRW2.0T indicated in 30-year government bonds at Avg Yield: 4.07% v 4.495% prior.

Other Asia

-(TW) Taiwan dollar weakens by +0.5% to 32.765/USD, weakest level since April 2025; equity outflow concerns remain a topic for Taiwan with the Taiex down >3%.

-(TW) Taiwan sells NT$110B v NT$110B indicated in 1-year Certificates of Deposit (NCD); Avg Yield: 1.577% v 1.602% prior; bid-to-cover: 2.48x v 2.18x prior [from Oct 5th].

-(TH) Thailand Finance Minister: Cabinet approves tax hike on fully imported EVs to 35% from 10%.

-(PH) Philippine Central Bank (BSP) Gov Remolona: Will take some time for inflation to be within target - Business Forum.

-(PH) Philippines Oct Manufacturing PMI: 49.1 v 49.6 prior (2nd month of contraction).

-(ID) Jakarta Composite Index opens +0.9% to 5,14021:01:48(VN) Vietnam Oct Trade Balance: $7.3B v $1.3Be-(VN) Vietnam Oct Retail Sales Y/Y: 14.7% v 14.2% prior.

-(VN) Vietnam Oct Industrial Production Y/Y: 15.0% v 14.2% prior20:59:01(VN) Vietnam Oct CPI Y/Y: 5.1% v 5.3%e.

-(TH) Thailand Government Spokesperson: Thailand Cabinet to consider excise tax for EV imports.

-(TH) Thailand sells total THB85B in 3-month and 12-month bills.

-(ID) TLKM.ID Statement: Telkom unit NeutraDC targets 400 MW data center capacity expansion. Longer-term ambition of 1 GW across Indonesia and Southeast Asia.

North America

-(US) ORCL *Confirms pricing of $10B stock offering and $10B senior notes; Stock at $116/shr, notes due 2029-2046; Both offerings are expected to close Nov 4th.

-(US) AAPL Reports Q4 $2.10 v $1.98e, Rev $114.5B v $113Be; Gross margin 47.9% v 47.2% y/y v 47.5%e (includes favorable impact of about 1ppt from tariff refunds); Guides Q1 Rev +7-10% y/y v +5.7%e; gross margin 45-46% v 47.9% q/q v 46.5%e - earnings call; Gross margin forecast includes impact from memory chip costs and Siri AI costs; What we are seeing on memory pricing is "unprecedented", expect even higher memory costs in Dec quarter; Recent price increases provided some offset to memory costs; Q4 Greater China Rev $17.5B v $14.5B y/y v $18.6Be

-(US) GS CEO Solomon: US economy is "very resilient". Good companies come to market with good stories and there is plenty of capital to support those stories.

-(US) OCT ISM MANUFACTURING: 55.5 V 54.5E; Prices Paid: 75.2 v 77.2e; New orders: 55.5 v 55e [US market close].

-(US) OCT FINAL S&P MANUFACTURING PMI: 54.9 V 56.0E (confirms 15th month of expansion) [US market close].

-(US) Atlanta Fed GDP Now: Raises Q4 GDP estimate from 3.2% to 3.7% [US market close].

-(US) TREASURY QUARTERLY FINANCING ESTIMATES: TO BORROW $618B Oct-Dec v $640Be and $628B prior guide; To borrow $800B Jan-Mar v $620Be [US market close].

-(US) Envoy Witkoff: The United States will mediate working-level negotiations between Ukraine and Russia on November 10-11th in Abu Dhabi.

-(US) Democratic party groups denied temporary order by US judge - US financial press.

-(US) US Treasury Department: Treasury Sec Bessent met with Venezuelan Foreign Minister today.

-(US) President Trump to meet with US Ambassador to Portugal at 1:30pm ET on Tuesday.

-(US) NY State Department: Death of a child in Lewis county associated with the ongoing measles outbreak - Website.

-(US) DIS Considers thousands of layoffs; Manager asked to cut 20% through job cuts and other cost reductions - US financial press.

-(US) META Plans for five-part US bond offering and 6-part Euro offering - press citing investor call [US market close].

-(US) JPM COO Pinto: AI companies need to justify the level of investment and current valuations; valuations in AI space are still elevated.

-(US) OPENAI.IPO Has hired former US Army Sec Dan Driscoll - FT.

Europe

-(EU) ECB's Makhlouf (Ireland): Every meeting is a live meeting [EU market close].

-(UK) UK announces agreement on draft deal to scrap food export checks with the EU - BBC.

-(IE) Ireland Oct Consumer Confidence: 61.6 v 61.1 prior.

Middle East

-(IR) Trump: Reiterates Iran wants to make a deal; That could happen; Iran has said 'even recently' that they won't have a nuclear weapon; There's 'no rush' on restarting the war in Iran - Phone interview with Axios [US market close]

-(IR) Iran supreme leader granted govt authority for peace talks - Iranian press citing Pres Pezeshkian [EU market close].

-(IR) US VP Vance: Feels good about the prospects of a deal with Iran; Progress has been made; Echoes Trump that the US has not set a deadline to resume strikes; Has had several good talks with Iran [US market close]

-(IR) Iran Foreign Min Araqchi: Consultations through mediators, Qatar and Pakistan, are very intense; Reopening of Hormuz is conditional on Iran's terms - State Media [EU market close].

-(IR) [Confirms] US strikes Iran's Qeshm island - WSJ.

-(IR) Iran media reports explosions heard near Qeshm Island and off of Bandar Lengeh in southern Iran (still unconfirmed).

-(SA) ARMACO [ARAMCO.SA] Reports Q3 (SAR) Net 137.39B v 109.61Be, Op 222.26B v 205.86Be, Rev 464.33B v 307.56Be.

-(SA) ADNOC.IPO Subsidiary ADNOC Gas PLC signs 5-year LNG supply agreement with TotalEnergies - US financial press.

Levels as of 01:20am EDT

Nikkei 225 -0.3%; ASX 200 +0.3%; Hang Seng +0.3%; Shanghai Composite -1.4%; Kospi -3.9%.

Equity S&P500 Futures -0.1%; Nasdaq100 +0.1%; DAX -0.8%; FTSE100 -0.3%.

EUR 1.1237-1.1149; JPY 157.97-157.79; AUD 0.7005-0.6973; NZD 0.5631-0.5603.

Gold -0.6% at $3,922/oz; BTC -2.2% at $76,759; WTI Crude Oil +0.5% at $96.93/bbl; Copper -1.8% at $6.4250/lbs.