Equities trade cautiously higher on Hynix’s results

Asia market update: Equities trade cautiously higher on Hynix’s results; RBNZ ‘dovish’, RBA rate hike expectations supported by stubborn CPI; AUD/NZD rallies; ILS down on election uncertainty; Fed decision in focus, along with Tech [Advantest, Google].

General trends and developments

- Nasdaq FUTs opened -1.3% to 29,422 (vs. 29,812 prior), while S&P 500 FUTs opened -0.5% to 7,721 (vs. 7,758 prior) at the reopening post US-market close. Ahead of tomorrow’s Fed interest rate decision, CME FedWatch data based on 30-Day Fed Funds futures prices indicated a 9.40% probability of a +25bps hike to 4.00-4.25% (vs. 90.6% probability of rates remaining unchanged), declining from 11.1% w/w and 15.5% m/m. The 5-year Treasury Note auction drew an average yield of 4.845% (vs. 5.003% prior), with a stronger bid-to-cover ratio of 2.33x (vs. 2.21x prior). Meanwhile, the US Treasury accepted the maximum $6B in its second long-end liquidity buyback [2037-2046 maturities] operation against $10.7B in offers in its fourth offering overall reaching the maximum $6B acceptance cap.

- Israeli opposition party [Yasha Party] leader Gadi Eisenkot stated that the public had voted for political change against Prime Minister Benjamin Netanyahu, pledging to make every effort to fulfil the electorate’s wishes. However, exit polls from major Israeli television networks indicated that Netanyahu’s bloc has secured approximately 50 seats, the opposition around 52, and Arab parties 18, with most recent updated Channel 13 / Kan 11 exit polls indicating that Netanyahu’s bloc has now tied with rival Eisenkot. Preliminary results are expected on Wednesday [October 28th], with official results will not be declared until the votes have been fully counted and verified by election authorities, AP cites. As a result, the USD/ILS increased by +1.9751% to 3.0876 from today’s low at 10:45am to today’s high at 21:45pm.

- Australia’s September CPI came in higher than expected at +0.8% m/m and +4.3% y/y (vs. +0.7% expected and 4.2% expected). Australia’s Q3 CPI trimmed mean CPI increased by +1.0% q/q (vs. 1.0% expected) and +3.7% y/y (vs. 3.6% expected), all remaining above the RBA’s 2–3% target range. In the appearance before the Senate Economic Legislation Committee (Supplementary Budget Estimates 2026-27), RBA Governor Bullock reiterated her stance on the dual mandate, highlighted persistent inflation issues and stated that the labor market is a “little tighter” than previously judged. RBA Deputy Governor Hauser and RBA Assistant Governor Hunter commented on the most recent inflation readings stating “too high” and “Q3 CPI data is stronger than August outlook”. The ASX 30-day interbank cash rate futures November 2026 contract is currently trading at 95.265, indicating a 60% expectation of an interest rate increase by +25bps to 4.85% at the next RBA interest rate decision. (**Note: RBA’s next interest rate decision is scheduled for Tuesday, November 3, 2026.).

- The Reserve Bank of New Zealand (RBNZ) left the Official Cash Rate (OCR) unchanged at 2.75%, despite market expectations of an +25bps increase to 3.00%, marking the 1st pause in two decisions under the current tightening cycle. The Monetary Policy Committee (MPC) voted 4-3 to hold the OCR at 2.75%, with RBNZ Governor Bremen voting to hold alongside MPC Members Hansen, Gai, and Williams. In the post-rate decision press conference, RBNZ Governor Breman reiterated her stance that further tightening may be required, potentially pushing the OCR into restrictive territory and above its previous projected path, depending on economic conditions, adding that NZ$ decline could add to imported inflation.

- SK Hynix (000660.KR) reported Q3 (KRW) earnings, net profit reached 39.53T (vs. 12.60T y/y), while operating profit and revenue reached 89.33T (vs. 11.38T y/y) and 104.62T (24.4T y/y) respectively, marking a more than +200% y/y increase for all metrics at least. Operating profit margin expanded to +80%, up from +76% q/q and +47% y/y, underpinned by DRAM average selling price increasing +20% q/q and NAND average selling price increasing +mid-20% q/q. The company guided FY27 capex to increase ‘significantly’ y/y and HBM revenue to rise ‘sharply’. As a result, SK Hynix (000660.KR) shares rose by +2.0% at the open, subsequently triggering a Kospi sidecar on the Korean exchange, with fellow South Korean giant and rival, Samsung Electronics (005930.KR) rose +8.6%.

- Google might announce a chip purchase agreement with OpenAI, as the AI firm [OpenAI] seeks to lower reliance on Nvidia [The Information]. Interestingly, Alphabet will hold its quarterly conference call to discuss third quarter 2026 financial results on Wednesday, October 28, at 1:30pm Pacific Time (4:30pm Eastern Time).

- WTI Crude and Brent Oil FUTs re-opened +0.3% to $100.21/bbl (vs. $99.90/bbl prior) and $109.78/bbl (vs. $109.41/bbl prior) respectively. Oil prices drifted marginally lower during the U.S. market open amid expectations OPEC+ producers will keep targets steady at this weekend’s meeting. (**Note: In an agreement set out on April 5th, 2026, for a gradual and conditional phase-out of the 1.65M bpd voluntary production adjustment, at its August 8th meeting, OPEC+ finished the phased rollback of the 1.65M bpd voluntary cuts from 2023.).

- US equity FUTs +#% to +#% 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 +0.3% at 8,874.

- (AU) Australia Sept CPI M/M: 0.8% V 0.7%E; Y/Y: 4.3% V 4.2%E.

- (NZ) New Zealand central bank (RBNZ) leaves official cash rate (OCR) unchanged at 2.75%; not expected; Members differed in how much weight they placed on various risks and the timing of the monetary policy response.

- (NZ) RBNZ Gov Bremen: [Reiterates] Agreed tighter policy likely will be required, conditional on economy. Committee discussed decline in NZ$, if sustained could add to imported inflation - post-rate decision press conference.

- (AU) Appearance before the Senate Economics Legislation Committee (Supplementary Budget Estimates 2026-27) – Videoconference.

- (AU) CBA: Now expects the RBA to hike by 25bps in November to 4.85% [follows 'hawkish' RBA comments and Q3/Sept CPI data].

- (NZ) New Zealand Sept Filled Jobs M/M: 0.3% v 0.2% prior.

- (NZ) RBNZ Gov Breman: Watching exchange rate carefully - US Financial Press Interview.

China/Hong Kong

-(CN) Shanghai Composite Index opens +0.8% at 3,677; (HK) Hang Seng Index opens +0.2% at 23,084.

-(CN) China news update: China said to dispatch officials to Mideast in bid to defuse tension - press.

-(CN) China PBOC sets the yuan mid-point at 6.7165 v 6.7171 prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY1.15T in 1-day Overnight Reverse Repo & 7-day Reverse Repos; Net injects CNY151B v injects CNY1.01T prior

Japan

-(JP) Nikkei 225 Index opens +0.7% at 63,739.

-(JP) Japan Fin Min Katayama: Reiterates watching market trends with high sense of urgency. Fiscal policy isn't only thing impacting yields, FX. Cabinet's responsibility to revert tax rate after 2 years - Parliament.

-(JP) Japan Chief Cabinet Sec Kihara: Fiscal sustainability in mind in defense talks - Tokyo, Japan.

-(JP) Follow up: Tokyo police investigating GMO Internet unauthorized access - FNN.

-(JP) Bank of Japan (BOJ) Results related to today's outright bond buying operations.

-(JP) BOJ Outright Bond Purchase Operation for 3~5 Years; 5~10 Years and Inflation-Indexed Bonds (Inline with planned amounts for Q4, 2026).

Korea

-(KR) Kospi Index opens +2.2% at 5,764.

-(KR) 000660.KR Reports Q3 (KRW) Net 39.53T v 59.66Te (vs 12.60T y/y), Op 83.33T v 77.50Te, Rev 104.62T v 98.96Te; Announces planned KRW20T buyback.

-(KR) South Korea Sept Retail Sales Y/Y: 4.5% v 7.7% prior.

-(KR) Follow up: South Korea Presidential Office: South Korea to hold emergency meeting on financial firm hacks - Yonhap.

-(KR) South Korea Financial Regulator (FSC): Major financial investment firms hacked yesterday; Mirae Asset Global Investments said to have reported a hacking incident - Yonahp.

-(KR) Korea Exchange activates sidecar on Kospi following Kospi 200 FUTs rising by +5%, programme trading halted for five-minutes.

Other Asia

-(ID) Jakarta Composite Index opens -1.0% to 5,214; Indonesian Rupiah weakens to 18,170/USD.

-(TW) Taiwan Central Bank Governor Yang: Never said CPI cannot remain above +2%, +2% is just a reference point. 80% of our current FX reserves remain in US bonds - Legislature.

-(PH) Philippines President Marcos: Philippines to continue defending the peso. We have all the means to defend the peso. Our policy is to "continue to defend the peso as hard as we possibly can".

-(VN) Vietnam Government: Considering cutting special consumption tax on gasoline to zero.

-(IN) India Central Bank (RBI) said to be likely selling USD through state-run banks to limit the Rupee weakness – traders.

North America

- (US) Treasury liquidity buyback targets coupons maturing 2046-2056; Receives $10.7B of offers for buyback, accepts $6B (accepted the maximum $6B again) [US market close].

- (US) Oct Consumer Confidence: 91.7 V 81.0E [US market close].

- (US) Treasury $70B 5-year note auction draws 4.845% V 5.003% prior, BTC 2.33 V 2.21 prior [US market close].

-(US) Sept preliminary Durable Goods Orders: 1.8% V 1.9%E; durables (ex-transportation): 0.5% V 0.7%E; capital Goods Shipments (non-defense / ex-aircraft): 1.2% v 0.8%e [US market close].

- (US) Sept new Home Sales: 676K V 651KE [US market close].

- (US) Oct Richmond Fed Manufacturing index: -2 V 0E; Volume of new orders: -8 v -6 prior [US market close].

- (US) Oct dallas Fed services activity: +4.0 V -2.9E [US market close].

- (US) Atlanta Fed GDP Now: Cuts Q3 GDP estimate from 3.5% to 3.4% [US market close].

- (US) Weekly API Crude Oil Inventories: -2.0M v -4.9M prior.

- (US) Energy Sec Wright: Russia is unable to export diesel right now; Suspension of Russia sanctions is temporary - CNBC interview [US market close].

- (US) President Trump: Confirms terminating Biden's methane regulations - The President holds a political rally in Lubbock [Pre-Credentialed Media], Lubbock Memorial Civic Center, Texas.

- (US) US cost of Iran war operations rise to over $47B, according to Pentagon estimates - US financial press.

- (US) US warns Gulf of possible Iran operations after US midterm elections - WSJ.

- (US) New York Health Department: Reports 170 measles cases, data as of October 24th - Website.

- (US) President Trump: Didn't take sides in Brazil election. Would approve of Bolsonaro coming to US. Hearing Netanyahu is doing pretty well.

- (US) Pres. Trump: “When President Trump endorsed Bibi Netanyahu, the whole tide turned, and now, rather than a decisiv... - post on Truth Social.

- (US) BA Reports Q3 -$0.34 adj v -$0.21e, Rev $24.2B v $24.3Be; 737 prod rate heading towards 47 per month, 787 prod rate at 8 per month [US market close].

- (US) UPS Reports Q3 $1.69 adj v $1.63e, Rev $22.9B v $22.3Be; Adj op margin 7% v 6.4% y/y [US market close].

- (US) KO Reports Q3 $0.91 v $0.87e, Rev $13.4B v $12.9Be [US market close].

- (US) V Reports Q4 $3.48 v $3.43e, Rev $12.1B v $12.1Be [US market close].

- (US) GOOGL *OpenAI is planning to purchase Google's AI chips; possible terms not disclosed; OpenAI is a longtime' customer of Nvidia - The Information.

- (US) LNT US Energy Department: It closed $5.1B loan package to Alliant Energy to expand power generation, bolster grid in Iowa and Wisconsin.

- (US) ANT Statement: Expanding our partnership with US General Services Administration (GSA).

- (US) ANT reportedly said to pick JPMorgan to lead IPO's US retail offer and Citi for IPO's international retail offer - US financial press.

- (CA) Canada and UAE sign economic partnership agreement - Press.

- (BR) Brazil Oct FGV Construction Costs M/M: 0.4% v 0.4%e [US market close].

- (BR) Reportedly Flavio Bolsonaro is en route to US after his election defeat in Brazil - Folha [US market close].

- (BR) US Official: US confirms visa issuance to Flavio Bolsanaro and his family.

- (BR) Follow-up: Brazil President Lula: Regrets that Sen Bolsonaro left Brazil, he could have stayed and proved that accusations were not true, it's shameful; The Bolsonaro family seem to treat the US as their first nation and Brasil as their second.

- (CL) Chile central bank (BCCH) leaves overnight rate target unchanged at 4.50%; as expected.

- (AR) IMF reaches staff level agreement on 3rd review under Argentina's extended fund facility arrangement, unlocking $900M of IMF funding.

Europe

-(EU) EU said to be looking for global tax deal on multinational companies to boost next budget - Politico [EU market close].

-(RU) Russia Foreign Min Lavrov: Conflict in Ukraine shall continue and will likely escalate [EU market close].

-(RU) Russia Pres Putin: Discusses cooperation with U.S in the Arctic (regarding gas); We need to increase supply of gas [EU market close].

-(RU) Russia Dep PM Novak: Ready to supply the US with any volume of diesel; can reroute and sell all gas if Europe rejects [EU market close].

-(RU) Russian refineries crude processing is reportedly up 25% since drone attacks ceased in mid-Oct - press [EU market close].

-(RU) Russia announcement on upcoming OFZ bond issuance (held on Wed); to sell 2 tranches on Oct 28th.

-(RU) Russia Local Authorities: Ukraine drone attack damages industrial infrastructure in Russia's Novomoskovsk.

-(UK) Daily Baltic Dry Bulk Index -1.0% at 2,603 points.

-(UK) Chancellor of the Exchequer (Fin Min) Healy expected to reverse cuts to cash ISA allowances - FT.

-(IE) Ireland Sept PPI M/M: +0.5% v -0.8% prior; Y/Y: 7.4% v 6.5% prior [EU market close].

-(FR) SGO.FR Q3 Rev €11.6B v €11.6Be; Affirms outlook; Inflation is still accelerating [EU market close].

Middle East

-(IR) Iran Security chief Rezaee said to have met Supreme Leader Khamenei to discuss the war, unity and management of the Strait of Hormuz; Iran supreme leader calls for meeting conditions to end the war [EU market close].

-(IL) Israel PM Netanyahu: We are still waiting for real results. We must establish a strong, right-wing National Government; Israel Incumbent PM Netanyahu-led Bloc now tied with rival Eisenkot's Bloc - Updated Channel 13 Exit Poll / Kan 11 Exit Poll.

-(IR) Qatar Foreign Ministry spokesperson: Iran needs to show good intentions for mediation eforts to succeed [EU market close].

-(IL) Israel Leader of the Opposition Party [Yasha Party] Eisenkot: The Israeli public has voted for change and against Netanyahu.

-(IL) USD/ILS rises further by +0.75% to 3.077 after Israeli exit polls show deadlock.

-(IL) USD/ILS rises +0.28% to 3.06 after Israeli exit polls show deadlock; election uncertainty in focus.

-(SA) Saudi Arabia Civil Defense: Saudi Arabia issues early warning alert for potential hostile threat in Jeddah; the alerts were later withdrawn as of 23:10 GMT.

-(SA) Saudi-led Coalition: Intercepted an destroyed ballistic missile launched by Yemen's Houthis towards Taif.

Levels as of 01:20am EDT

Nikkei 225 +1.3%; ASX 200 flat; Hang Seng +0.2%; Shanghai Composite +0.8%; Kospi +6.8%.

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

EUR 1.1132-1.1120; JPY 158.04-157.76; AUD 0.7055-0.7023; NZD 0.5689-0.5583.

Gold -0.6% at $4,037/oz; BTC +1.2% at $80,942; WTI Crude Oil +1.5% at $101.36/bbl; Copper -0.1% at $6.6468/lbs.