Google and Samsung’s results weigh on Nasdaq FUTs

Asia market update: Google and Samsung’s results weigh on Nasdaq FUTs; FOMC decision also assessed ahead of Fri’s BOJ verdict; ECB rate decision due later today.

General trends and developments

- Nasdaq FUTs have extended declines amid losses in chip and AI-related names, despite stronger Microsoft figures. The initial move came as Alphabet plummeted by >9% in afterhours trading amid weaker than expected quarterly revenues and continued negative FCF.

- Samsung’s figures were also a market headwind, as the chip unit’s Q3 operating profits missed consensus and a new stock buyback was not announced as the company addressed recent foreign investor concerns regarding the trading discount for its preferred shares. The firm was, additionally vague in terms of its 2027 total shareholder returns. The next shareholder return policy, along with the final amount of shareholder returns and the specific execution plans for the remaining funds for 2026, will be finalized at the Board meeting scheduled for late January 2027, according to Samsung. Following the results and outlook comments, Samsung Electronics’ [~28.4% of the Kospi index] shares declined sharply [by -7.5%].

- UST yields have declined in Asia with the equity losses, particularly in South Korea. Interestingly, Fed Chair Warsh mentioned South Korea in his comments after the Fed left rates unchanged (as expected) with 2 hawkish dissenters. Warsh specifically said he pays ‘a lot of attention’ to the South Korean economy. Incidentally, Warsh previously commented on AI and possible tail risks before Wed’s Fed decision, when he spoke in Thailand on Oct 16th. Earlier in the month, former BOK Gov Rhee noted South Korea’s chip industry cycle may end ‘earlier’ due to developments related to Chinese tech [local press report from Oct 11th].

- With major central banks recently holding fire on rates, better demand was seen today at NZ’s weekly bond auction. Japanese auctions were, also, well received ahead of an expected rate pause by the BOJ on Friday.

- US equity FUTs -0.8% to -0.2% 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 flat at 8,850.

-(AU) Australia Q3 Export Price Index Q/Q: 1.4% v 1.1% prior.

-(AU) Australia Corporate Regulator ASIC: Engaging with joint lead managers of Firmus's $5B collapsed IPO.

-(NZ) New Zealand Oct ANZ Business Confidence: 52.5 v 51.9 prior.

-(NZ) RBNZ Gov Breman: Chances of December hike are 'high' - Herald (update).

-(NZ) New Zealand sells total NZ$450M vs. NZ$450M indicated in 2030 and 2037 bonds.

China/Hong Kong

-(CN) Shanghai Composite Index opens -0.1% at 3,677; (HK) Hang Seng Index opens flat at 23,088.

-(HK) HKMA keeps base rate unchanged at 4.25% (as expected); Tracking the US Fed as the HKD is pegged to the USD.

-(HK) HKMA: HKD-USD rate differential persists, warning public to manage interest rate risks.

-(CN) China's onshore yuan strengthens to 6.6621/USD, strongest level since June 7th, 2022.

-(CN) China PBOC sets the yuan mid-point at 6.7147 v 6.7165 prior (strongest level since February 2nd, 2023).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY1.12T in 1-day Overnight Reverse Repo & 7-day Reverse Repos; Net injects CNY115B v injects CNY151B prior.

-(HK) 5.HK maintains prime rate at 5.00% in Hong Kong.

-(HK) 175.HK Reports Q3 (CNY) Core Net 5.21B, +32% y/y, Rev 99.0B, +10% y/y.

-(HK) 700.HK Executive: China's Tencent plans to sharpen focus on AI for businesses.

Japan

-(JP) Nikkei 225 Index opens +0.4% at 64,200.

-(JP) Japan sells ¥2.8t vs. ¥2.8t indicated in 2-year JGB bonds; ; AVGyield: 1.905% v 1.9640% prior; bid-to-cover: 4.03x v 3.89x prior.

-(JP) Japan Oct 1-10 Exports Y/Y: +30.7%; Imports +18.9% (provisional).

-(JP) Japan releases weekly flows data [period ended Oct 23rd]: Foreign buying of Japan equities: ¥1.18T v -¥67.5B prior; Japan buying of foreign bonds: -¥92.6B v -¥160.5B prior.

-(JP) Japan Chief Cabinet Sec Kihara: Decline comment on GMO site-block request report - Tokyo, Japan.

-(JP) Japan Coast Guard: North Korea fired what could be a ballistic missile.

-(JP) Japan sells ¥3.3T vs. ¥3.3T indicated in 3-Month Bills; Avg Yield: 1.2706% v 1.2680% prior; bid-to-cover: 3.88x v 3.84x prior.

-(JP) TM Reports Sept Global Production: 889.08K, -3.2% y/y; Global Sales: 860.11K, -2.2% y/y.

Korea

-(KR) Kospi Index opens flat at 6,017.

-(KR) South Korea Oct Business Manufacturing Survey: 105.6 v 99.5 prior.

-(KR) Bank of Korea: To monitor financial, forex market conditions.

-(KR) South Korea Finance Minister Lee: To respond immediately if market volatility heightens.

-(KR) Follow up: North Korea fired about 10 short-range ballistic missiles - Yonhap.

-(KR) South Korea Defense Ministry: Affirms North Korea's deployment of older weapon systems near border appears to be performative.

-(KR) 005930.KR Reports Final Q3 (KRW) Net 75.2T v 12.0T y/y, Op 107.4T v 107.4T prelim (v 12.2T y/y); Rev 195.3T v 195.0T prelim (v 86.0T y/y).

Other Asia

-(IN) India Sept Industrial Production Y/Y: 6.7% v 7.2%e [EU market close].

-(VN) Vietnam Government: Plans to raise state ownership in Vietnam airlines to 86.42% by 2030 from 39.29%.

-(TH) Thailand sells THB35B vs. THB35B indicated in 6-month bills; Avg Yield: 0.95225% v 0.91016% prior; bid-to-cover: 2.92x v 2.30x prior.

North America

-(US) FOMC leaves target range unchanged between 3.75-4.00% range; as expected; vote was 10 to 2, two hawkish dissenters [US market close].

-(US) Fed Gov Warsh: Meeting focused mostly on inflation which remains too high; Made clear willingness to act; Decided to change the FOMC schedule next fall to eight meetings per year; One meeting will be focused on strategy and one meeting will not have a policy rate decision; 2028 will have six policy-setting meetings and two strategy meetings - post rate decision press conference [US market close].

-(CA) Bank of Canada (BoC) raises interest rates by 25bps to 2.50%; as expected [US market close].

-(US) Sept advance goods trade balance: -$134.9B V -$130.2BE [US market close].

-(US) DOE CRUDE: -1.9M V 0ME; GASOLINE: +3.9M V -1ME; DISTILLATE: -1.5M V -1ME; Total domestic production 14.0M bpd v 13.3M prior [US market close].

-(US) Comparative Analysis of current vs Sept FOMC statements: Reiterates inflation is elevated and job gains keeping pace with workforce; Economic growth upgraded to "strong" from "solid" pace; Seek "accumulation of more information" before next decision; 2 hawkish dissenters [US market close].

-(US) Fed Gov Warsh: Ensuring price stability is not about a fixed date on a calendar or an isolated data point; Does not anticipate issuing any policy statement at the strategy meetings beginning next year; It's not obvious what we'll come out with of those meetings; Will provide more information on the format of these new meetings at a later date - Q&A [US market close].

-(US) MBA Mortgage Applications w/e Oct 23rd: +3.4% v -5.3% prior (1st rise in 8 weeks) [US market close].

-(US) Nevada reports Sept casino gaming Rev $1.28B, flat y/y, Las Vegas strip Rev $693.5M, +0.8% y/y [US market close].

-(US) FTC is demanding info on personalized pricing and wage setting strategies from Walmart, Target, Uber, Lyft, Doordash, Instacart, and airlines Delta, United, and Jetblue [US market close].

-(US) US warns [again] allies to brace for possible Iran strikes - AP.

-(US) Sec of State Rubio to meet with Finnish Foreign Minister at 9am ET.

-(US) US Government: US confirms screwworm case in dog in Arizona - post on X.

-(US) US, foreign airlines urge Trump Administration to reconsider plan to require Ebola-related declarations from all foreign air travelers starting November 3rd - Letter seen by US financial press.

-(US) GOOGL Reports Q3 GAAP $2.67 v $2.94e, Rev (ex-TAC) $111.2B v $111.8Be; Search and YouTube rev missed estimates, Cloud beat [US market close].

-(US) MSFT Reports Q1 $4.89 v $4.71e, Rev $92.3B v $90.6Be; Azure rev and opr margin top expectations, capex a little below - Operating margin (calculated) 49.8% v 48.9% y/y v 48.6%e [US market close].

-(US) ORCL Targets FY30 Rev $225B+ v $225Be, 35% CAGR from FY26, non-GAAP operating margin 40%+, eps $21.00+/shr v $20.50e; Affirms FY27 outlook; Capex to step down in 2029 supporting +FCF of $30B (previously targeted 2030 FCF positive [US market close].

-(US) OPENAI.IPO OpenAI's Astra model becomes primary distillation target for Chinese AI labs - The Information.

-(CA) EU will reportedly scrap 'associate member' offer to Canada, opting for an 'ever closer association' - Politico [US market close].

-(CA) Bank of Canada (BOC) Gov Macklem: Policy rate even with this rate hike is low enough that it is not restraining growth in Canada; Cost pressures for firms are building; Hiking rates will help lean against a pass through of higher oil prices - post rate decision press conference [US market close].

-(CA) Bank of Canada (BOC) Gov Macklem: Will have more to say about my own future in due course (7-year term ends in June 2027) - media interview.

-(MX) Mexico Foreign Minister Velasco: Sheinbum to hold APEC bilateral meetings - Mexico City, Mexico.

-(BR) Brazil Chief of Electoral Authority: Election proceeded normally and in full accordance with the law and the constitution - Statement.

Europe

-(UK) Chancellor Healey presents autumn Budget: Budget is built on fiscal discipline and we will meet fiscal rules; OBR predicts we will spend £14B more on debt interest this year [EU market close].

-(UK) DMO FY26/27 GILT REMIT: £250.6B V £249.2BE (VS £252.1B in March) [EU market close].

-(RU) Russia Dep PM Novak: Not in talks with US regarding return of oil projects but open to partners [EU market close].

-(RU) Russia Pres Putin: Russia is in contact with Elon Musk about low orbit satellites, despite political issues - Russian press [EU market close].

-(RU) Russia Local Mayor: Russia downs most of 613 drones heading towards Moscow overnight - Russian Newswires.

-(UK) Bank tax hike said to be temporary, surcharge less than 8% - press (less than expected) [EU market close].

-(UK) London Metals Exchange announces objectives to turn metal into tokens in move connected to Hong Kong's five-year plan - Sources.

-(IT) Italian PM Meloni: Italy has approved €26B budget law that focuses on tax cuts [EU market close].

-(FR) France Q3 Total Jobseekers: 3.353M v 3.323M prior [EU market close].

-(FR) AIR.FR Q3 €1.70 v €1.67e, Adj EBIT €1.77B v €1.94B y/y, Rev €17.5B v €17.9Be; Affirms outlook [EU market close].

Middle East

-(IR) Reportedly US and Israel attacks on Iran after the mid-terms could target Iranian leadership; US and Israel are said to be coordinating ahead of any potential Iranian attacks - Axios [US market close].

-(IR) Iran Foreign Min: While our armed forces are fully prepared to defend Iran, we continue to give diplomacy a chance to succeed [US market close].

-(IR) Iran senior official: Qatar proposal are unacceptable to us; policy on showing no flexibility over nuclear issue remains unchanged [EU market close].

-(SA) Saudi Arabia Civil Defense: Saudi Arabia issues alert over potential danger in Najran but later noted the danger had 'passed'.

Levels as of 01:20am EDT

Nikkei 225 +1.2%; ASX 200 +0.5%; Hang Seng +0.1%; Shanghai Composite -0.2%; Kospi -0.6%.

Equity S&P500 Futures -0.2%; Nasdaq100 -0.8%; DAX +0.4%; FTSE100 +0.3%.

EUR 1.1161-1.1134; JPY 158.07-157.61; AUD 0.7068-0.7048; NZD 0.5637-0.5618.

Gold -0.6% at $4,045/oz; BTC -0.6% at $80,455; WTI Crude Oil -1.6% at $101.20/bbl; Copper flat at $6.6720/lbs.