Cautious/mixed equity trading seen ahead of a week filled with key macro events and TECH earnings

Asia market update: Cautious/mixed equity trading seen ahead of a week filled with key macro events and TECH earnings; BRL-assets expected to decline on Lulu surprise; Moonshot’s latest model upgrade assessed.

General trends and developments

- Nasdaq FUTs opened +0.5% at 29,268; S&P 500 FUTs opened +0.4%; WTI Crude FUTs opened -1.0% at $102.45/bbl.

- Brazil election surprise weighs on BRL assets: Brazilian President Luiz Inácio Lula da Silva secured fourth term, defeating Flávio Bolsonaro in the October 25th runoff with 51.79% of the vote against Flavio Bolsonaro’s 48.21%, with 100.00% of the votes counted. Voting hours were extended by two hours, prompting Bolsonaro to challenge the results and announce plans to seek the annulment of the election in his post-election speech. Lula on the other hand, pledged to govern for all 215 million Brazilians, invest in technology and data centers, and reduce Brazil’s dependence on the US and China. As a result, Tokyo-listed Brazil equity ETF NEXT Funds Ibovespa Linked (1325.T) fell sharply ~11-14%+ immediately after the results, marking the largest intraday +/- shift since 2020.

- China’s Moonshot AI has released an upgraded version of its Kimi K3.1 Pro model, with improvements in the areas of financial research and coding capabilities. According to the Artificial Analysis Intelligence Index, the model ranks 4th globally, trailing Anthropic’s Opus 5.5 and Sonnet 5.5, as well as Meta’s Muse Wonder Fall, while outperforming OpenAI’s GPT-6 Astra. This underscores Moonshot AI’s growing competitiveness in the global AI market, particularly among Chinese AI models. Incidentally, Chinese AI firms had already been preparing for overseas launches, even before the latest revelation from Moonshot, as DeepSeek and Minimax were said to have recently received licenses for overseas use. This development dovetails with prior comments from Chinese President Xi regarding open-source AI being a ‘public good’.

- Chinese ‘Nvidia competitor’ Cambricon’s shares have risen by >1% after the firm reported financial results following Friday’s market close [Reported Q3 (CNY) Net 1.40B, +147.4% y/y, Rev 3.53B v 1.73B y/y] . Recall ahead of the earnings report, various China chipmakers [including Huawei and Cambricon] were said to have raised their AI processor prices [financial press from Sept 10th]. Certain media outlets have noted that the revenues from the chipmaker were ‘slower than expected’. There were, however, only a few consensus estimates for Q3 results.

- Looking ahead this week (Asian-weighted focus, EST/EDT), key data releases include the US FOMC Interest Rate Decision + Statement + Press Conference on Wednesday October 28th, EU ECB Interest Rate Decision + Statement + Press Conference and JP BoJ Interest Rate Decision + Statement + Press Conference on Thursday October 29th. Additionally, Israeli elections, followed by the AU Q3 CPI and NZ RBNZ Interest Rate Decision + Statement + Press Conference is scheduled for Tuesday October 27th.

- The New Zealand and Taiwan markets will be closed on Monday in APAC for public holidays.

- US equity FUTs +0.3% during Asia trading.

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

- Mon Oct 26th: FR BTF Auctions, KR Oct Consumer Confidence, (Mon night, KR Preliminary Q3 GDP, CN Sept YTD Industrial Profit, JP BoJ Core CPI).

- Tue Oct 27th: EU Sept M3 Money Supply, MX Sept Trade Balance, US Sept Preliminary Durable Goods Order & Core Durable Goods Order, US Oct CB Consumer Confidence, (Tue night, AU Q3 CPI, NZ RBNZ Interest Rate Decision + Statement + Press Conference, TH BOT Interest Rate Decision, HK Sept Trade Balance).

- Wed Oct 28th: HK Sept Trade Balance, IN Sept Industrial Production, DE 10-Year Bund Auction, CA BoC Interest Rate Decision + Statement + Press-Conference, RU Sept GDP + Industrial Production, US FOMC Interest Rate Decision + Statement + Press Conference, (Wed night, NZ Oct ANZ Business Confidence, JP Oct Household Confidence).

- Thu Oct 29th: US Q3 Preliminary PCE & Core PCE + Sept PCE & Core PCE, US Q3 Preliminary GDP, US Weekly Initial Jobless Claims, EU ECB Interest Rate Decision + Statement + Press Conference, US Q4 Preliminary Atlanta Fed GDPNow, UR NBU Interest Rate Decision, (Thu night, KR Sept Industrial Production & Retail Sales, JP Oct Tokyo CPI & Core CPI, JP Sept Industrial Production & Retail Sales + Unemployment Rate, AU Q3 PPI, JP BoJ Interest Rate Decision + Statement + Press Conference, TH Sept Industrial Production + Trade Balance, TW Q3 Preliminary GDP, HK Sept M3 Money Supply).

- Fri Oct 30th: FR Q3 Preliminary GDP + Oct Preliminary CPI, ES Q3 Preliminary GDP + Oct Preliminary CPI, IT Q3 Preliminary GDP + Oct Preliminary CPI, DE Q3 Preliminary GDP + Oct Preliminary CPI, EU Q3 Preliminary GDP, MX Q3 Preliminary GDP, CA Aug GDP, US Oct Chicago PMI, RU Sept GDP, (Fri night, CN Oct Mnfg/Non-Mnfg/Composite PMI).

- Sat Oct 31st: (Sat night, KR Oct Preliminary Trade Balance).

Holidays in Asia this week

- Mon Oct 26th: New Zealand, Taiwan.

Headlines/economic data

Australia/New Zealand

- (AU) ASX 200 Index opens -0.6% at 8,745.

- (AU) RBA Assistant Gov Hunter press interview from Oct 25: Affirms not going to front run what the Board might or might not do with interest rates - update.

China/Hong Kong

-(CN) Shanghai Composite Index opens -0.5% at 3,671; (HK) Hang Seng Index opens +0.3% at 23,157.

-(CN) China's fifth plenum goes underway [as expected] - Xinhua.

-(CN) China onshore yuan strengthens to 6.6682/USD, strongest level since June 9th 2022.

-(CN) China Auto Association Exec: Guides 2027 domestic car sales +2% y/y.

-(CN) China National Team ETFs had the largest inflows since Apr 2025; inflows totaled $19B during last week alone – US financial press.

-(CN) Chinese copper magnate He Jinbi jailed for life over Maike fraud.

-(CN) China PBOC sets the yuan mid-point at 6.7162 v 6.7180 prior (strongest level since February 2nd, 2023).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY454B in 1-day Overnight Reverse Repo & 7-day Reverse Repos; Net injects CNY116B v injects CNY25B prior.

-(CN) MOONSHOT.IPO The co. released upgrade of the Kimi K3.1 Pro model; cites an announcement made by the co. on Friday - update.

-(HK) 3690.HK To offer CNY-denominated senior notes internationally to professional investors only in proposed issuance.

Japan

-(JP) Nikkei 225 Index opens -0.4% at 62,450.

-(JP) Japan PM Takaichi cabinet approval rating left unchanged at 62% from September - Nikkei poll.

-(JP) Japan Aug Final Leading Index CI: 118.0 v 118.0 prelim.

-(JP) Japan PM Takaichi: Want results on tax cut, oil diversification bills.

-(JP) Japan Chief Cabinet Sec Kihara: Will hold ministerial meeting on cyber security - Tokyo, Japan.

-(JP) Japan plans support for banks to fund previously disclosed growth investments – Japanese press [update].

Korea

-(KR) Kospi Index opens -0.9% at 5,499.

-(KR) North Korea Leader Kim Jong Un visited China this weekend - South Korean press [weekend update].

-(KR) North Korea sends letter to United Nations Security Council (UNSC) over border incident - KCNA.

-(KR) Follow up: South Korea Unification Ministry: North Korea's letter to UN calling DMZ mine blast a staged act appears to be aimed at justifying border fortification work.

-(KR) South Korea may delay crypto tax by 2 more years - Daily.

-(KR) South Korea sells KRW3.0T v KRW3.0T indicated in 5-year Bonds: Avg Yield: 3.935% v 4.275% prior [from September 20th].

-(KR) SKHY Plans KRW16.0T special dividend on Kioxia investment gains - Donga.

Other Asia

-(ID) Jakarta Composite Index opens flat at 5,442.

-(SG) Singapore Sept Industrial Production M/M: -3.9% v +0.6%e; Y/Y: 3.4% v 7.1%e.

-(SG) Singapore Minister of State Tan: Singapore must weigh risks of energy supply disruption. Singapore's new plants will boost generative capacity by 26%. 5 new power plants to come online between 2026-2031, to raise overall capacity by more than a quarter - Singapore Energy Conference.

-(ID) Indonesia Financial Regulator Official: Stock market has shown resilience amid pressure. We had constructive talks with FTSE Russell last Friday. Sought MSCI clarification, FTSE Russell feedback. Extending share buyback without EGMs to June 2027 - Press Briefing.

-(ID) Indonesia Wealth Fund Danantara COO: State-owned enterprises reports Aug YTD Net $11.86B, +18.4% y/y.

-(ID) Indonesia rupiah weakens to 18,107/USD, lowest level since late-July.

-(TH) Thailand Sept Customs Trade Balance: -$5.9B v -$1.8Be.

-(TH) Thailand baht weakens to 33.82/USD, lowest level since July 24th.

-(PH) Philippine peso weakens to 63.778/USD, record low.

North America

-(CA) White House confirm to modify or remove some tariffs on Canadian goods, effective Oct 30th - press [Oct 23rd].

-(BR) Incumbent President Lula wins Brazil Presidential election; Flavio Bolsonaro at 48.21% vs. Incumbent President Lula at 51.79% with 100.00% of votes counted - Datafolha.

-(US) President Trump to deliver remarks in Mississippi at 6pm CDT on Monday.

-(US) Pres. Trump: The Libyan people are proud, resilient, hospitable, and deserving of peace and prosperity. The United States and Libya share a strong and enduring partnership in combating terrorism, building on our historic success in defeating ISIS in Libya together - post on Truth Social.

-(US) BA reportedly has stopped production of 777 freighter since Aug due to pricing dispute with parts supplier - press [weekend update].

-(US) ANTHROPIC.IPO Claude said to have accessed publicly available Georgia voter data without human authorization - Axios.

-(US) SPCX Follow-up: Pricing discussions said to be ongoing regarding $40B debt offering - US financial press.

-(US) CART reportedly considering a sale, has hired investment bankers to explore options - The Information.

-(CO) President Espriella: Colombia to present fiscal adjustment bill next week - Address.

-(BR) Brazil extends voting by 2 hours; the presidential vote count had been paused after the Supreme Court extended voting hours - US financial press [update].

-(BR) Follow-up: Brazil President Lula: Now that I won I will govern for whole country. I will govern for 215 million Brazilians, we no longer have an electoral rival - Sao Paulo, Brazil.

-(BR) Follow-up: Brazil's Flavio Bolsonaro: What happened today was unacceptable. Extending voting hours was unacceptable. We will ask election to be annulled - Brasilia, Brazil.

-(BR) Brazil ETF in Japan falls -9.6% following Incumbent President Lula wins Brazil Presidential election.

Europe

-(EU) IEA Chief Birol: Don't see any credible pathway for energy markets to return in 2027 to pre-Iran war levels.

-(FR) Moodys maintains France sovereign rating at Aa3; Outlook Stable [weekend update].

-(EU) Council President Costa: EU ready to back reforms, work on future for Serbia.

-(UK) Chancellor of the Exchequer (Fin Min) Healy expected to announce +3.9% rise to the full state pension - The Times.

-(UK) UK PM's Office: UK to spend additional £432M to help curb homelessness [The budget is scheduled for Wednesday, 28th October 2026].

-(DE) Germany said to prepare to purchase cruise missiles developed in Ukraine.

-(DE) VOW3.DEAudi plans $4B investment in first US plant in Georgia - update.

Middle East

-(IR) Iran Top Security Body Deputy Secretary Bagheri: [Confirms] Officials from Turkey, Saudi Arabia and Pakistan will hold consultation on regional security in Tehran - State TV.

-(SA) Houthis claim to have attacked several airports across Saudi Arabia and an Aramco facility in Yanbu as well as the east-west pipeline and pumping stations - press [weekend update].

-(YE) Yemen-based Houthis: Confirm attacked Saudi Arabia's east-west crude oil pumping stations with drones, with no immediate Saudi confirmation.

-(SA) Top officials from Mecca pact countries Saudi Arabia, Turkey and Pakistan expected to meet Iranians in Tehran to discuss regional coordination on Monday [October 26th, 2026] - US financial press.

-(SA) Saudi-led Coalition: Conducted operations against Houthi threats.

-(SA) Saudi Civil Defense issues alert over potential danger in Riyadh - State TV.

-(IL) Israel Aug Manufacturing Production M/M: 4.7% v 0.1% prior [weekend update].

-(IL) Israel PM Netanyahu asked Trump for more support in Tuesday's election - Axios [update].

-(IR) US President Trump said ‘decision time nears’ on Iran – US financial press [update].

-(IR) US intelligence memo issues warning about "advanced" Iranian plots to kill American officials abroad - Axios [weekend update].

-(IR) Myanmar said to have disguised purchases of sanctioned jet fuel from Iran – financial press.

Levels as of 01:20 am EDT

Nikkei 225 -0.2%; ASX 200 +0.2%; Hang Seng +0.6%; Shanghai Composite flat; Kospi -0.4%.

Equity S&P500 Futures +0.3%; Nasdaq100 +0.3%; DAX +0.3%; FTSE100 +0.4%.

EUR 1.1227-1.1202; JPY 157.22-156.65; AUD 0.7040-0.7026; NZD 0.5708-0.5695.

Gold +0.5% at $4,014/oz; BTC -0.5% at $80,214; WTI Crude Oil -2.1% at $101.07/bbl; Copper -0.1% at $6.4930/lbs.