RBA holds, leaves door open either way, Asian equities take a breather

General trend and developments

- Australia’s RBA held rates at 3.60% as widely expected, and in both the Statement and Gov Bullock’s post-rate press conference kept the door open to go either way (cut or hike) from here, depending on the data. Comes amid conflicting economic data (soft jobs vs higher inflation) with the RBA raising its CPI forecasts and terminal rate up from 2.90% to 3.30%.

- Aussie 3-year yield rose 5bps as RBA Gov Bullock spoke and the Aussie dollar came off its lows.

- Nikkei back from holiday yesterday to another record high today before falling negative as the session continued.

- South Korean equities took a breather (-2.5%) from their dizzying rally since the April lows. (Hynix +11% yesterday but off -5.5% today.).

- South Korea CPI hotter than expected and above target for October, but Bank of Korea expects CPI to be stable around 2.0% around year-end.

- Comes as overnight South Korea Industry Ministry confirmed to expand financial and policy support for exporters facing US and EU steel tariffs. Posco Holdings +1.8%.

- Japan Oct Final PMI Manufacturing confirmed a 4th month of contraction.

- USD/JPY briefly hit mid-Feb highs as Euro pierced below 1.15. Yen later gained 0.2% vs USD during the Asia session.

- US equity FUTs -0.5% to -0.7% during Asia trading.

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

- Tue Nov 4th (Tue night US Sept JOLTS).

- Wed Nov 5th NZ Q3 jobs, NZ RBNZ Presser, JP BOJ Minutes, CN Oct RatingDog Services PMI, ID Q3 GDP, (Wed night US Oct ISM Services PMI, US Oct ADP Jobs).

- Thu Nov 6th AU Sept Trade Balance, (Thu night UK BOE Rate Decision).

- Fri Nov 7th JP Sept Household Spending, CN Oct Trade Balance, (Fri night US Nov Prelim Michigan Consumer Sentiment).

Holidays in Asia this week

- Mon Nov 3rd Japan.

- Wed Nov 5th India.

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opens -0.2% at 8,881.

- Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 84.5 v 85.8 prior.

- RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 3.60%; AS EXPECTED.

- Reserve Bank of Australia (RBA) Statement on Monetary Policy (SOMP).

- RBA Gov Bullock: Think we are pretty close to neutral, will go meeting by meeting - post-rate decision press conference.

China/Hong Kong

- Hang Seng opens flat at 26,14; Shanghai Composite opens -0.1% at 3,973.

- US Treasury Sec Bessent: China Pres Xi has 'great respect' for Pres Trump - Fox News interview.

- Hong Kong CEO Lee: Hong Kong recorded 80 IPOs in first 10 months of 2025; Became World No. 1 in fundraising market by volume - comments at event with business and policy leaders, incl China Vice Premier.

- China President Xi meets Russia PM M Mishustin in Beijing – Xinhua.

- Shipping firms in China see more volatility related to freight prices - Shanghai Securities News.

- CEO Huang has continued to lobby White House to keep China market access; Sec State Rubio and other top officials dismissed the idea, said advance tech sales to China would be a national security threat – press [overnight update].

- China Premier Li: Willing to expand cooperation in various sectors with Russia [overnight update].

- REPORTEDLY CHINA SEEKS TO BUY US WHEAT FOR 1ST TIME THIS YEAR – PRESS [overnight update].

- China Commerce Ministry (MOFCOM): China and EU agree to keep supply chains stable.

- China PBOC sets Yuan reference rate: 7.0885 v 7.0867 prior.

- China PBOC Open Market Operation (OMO): Injects CNY118B in 7-day Reverse Repos; Net drains CNY358B v drains CNY259B prior.

Japan

- Nikkei 225 opens -0.3% at 52,217.

- Japan Oct Final PMI Manufacturing: 48.2 v 48.3 prelim (confirms 4th month of contraction).

- Japan PM Takaichi Reiterates aiming to boost tax revenue without hiking tax rates - Japanese press.

- Japan PM Takaichi; Important not to repeat problem of politics, mnoney - Japanese press.

- Mizuho CEO: Japan PM Takaichi growth plan is 'playing well in the market' - financial press.

- Japan Fin Min Katayama: 'Great' that the gasoline tax will be resolved by year-end.

- Japan Fin Min Katayama: Reiterates seeing one-sided and rapid [FX] moves [made similar comments last week].

- Japan Economic Revitalization Min Kiuchi: Will decide on Japan's growth strategy next Summer (inline - financial press.

- According to Goldman Sachs the prerequisites for Japan Yen intervention NOT yet met - US financial press.

Korea

- Kospi opens -0.1% at 4,219.

- SOUTH KOREA OCT CPI M/M: 0.3% V 0.1%E; Y/Y: 2.4% V 2.2%E.

- Bank of Korea: Expects South Korea CPI to be stable around 2.0% target by year end.

- South Korea Pres Lee: US trade deal eases uncertainty to the economy- speech on 2026 budget.

- South Korea Industry Ministry: Confirms to expand financial and policy support for exporters facing US and EU steel tariffs.

- Korea Zinc Prosecutors in South Korea have conducted a search related to the co. over its rights offering - Yonhap.

- South Korea President Lee said to sign executive order to halt the sales of govt assets [overnight update].

- Samsung: Said to be delaying the pricing of DDR5 memory contracts amid demand being higher than supply – Digitimes [overnight update].

Other Asia

- RBI GM Bhandia: Liquidity and pricing in govt bonds need to improve in order to increase retail participation.

- Singapore Oct Purchasing Managers Index (PMI): 50.0 v 50.1 prior.

- Indonesia Central Bank (BI) Gov Warjiyo: Raises 2025 GDP growth 'slightly above midpoint' of 4.7-5.5% (prior 'above mid-point' of 4.6-5.4% range) [overnight update].

- Thailand Fin Min Ekniti: To buyback debt from ~3.5M people, starting Sept [overnight update].

North America

- (US) Fed's Goolsbee (voter for 2025; non-voter in 2026): Govt shutdown shifts risks to inflation – Semafor.

- US Treasury Sec Bessent: China Pres Xi has 'great respect' for Pres Trump - Fox News interview.

- (US) Fed's Miran (FOMC voter, dovish dissenter): Reiterates Fed still too restrictive and that neutral rate quite a way below current policy - TV interview.

- (BR) Brazil Oct Manufacturing PMI: 48.2 v 46.5 prior (6th month of contraction).

- (CA) Canada Oct Manufacturing PMI: 49.6 v 47.7 prior (9th straight contraction).

- (US) OCT FINAL S&P MANUFACTURING PMI: 52.5 V 52.2 PRELIM (confirms the 3rd month of expansion).

- (US) OCT ISM MANUFACTURING: 48.7 V 49.5E; All of the four demand indicators (New Orders, New Export Orders, Backlog of Orders, and Customers' Inventories indexes) improved, although they are still in contraction territory; Respondents continued to note difficult business conditions and negative tariff impacts.

- (MX) Mexico Oct Manufacturing PMI: 49.5 v 49.6 prior.

- (US) Fed's Goolsbee (voter for 2025; non-voter in 2026): Am uneasy with frontloading rate cuts, rates should come down with inflation; Undecided at what should happen at next Fed meeting; Threshold for cutting rates is higher than at last two FOMC meetings - TV interview.

- (US) Fed's Daly (non-voter in 2025 & 2026): Oct rate cut was appropriate, I supported it; Need to keep modestly restrictive - Q&A responses.

- (US) FAA: Reportedly Dallas Love Field has been forced to temporarily stop flights due to staffing issues - press.

- (US) Fed's Cook (voter): Expect inflation to stay elevated for the next year, as tariffs are still driving up price pressures: Labor market is softening but only modestly.

- (US) TREASURY QUARTERLY FINANCING ESTIMATES: TO BORROW $569B IN OCT-DEC QUARTER V $700BE AND $590B PRIOR ESTIMATE; JANUARY-MARCH TO BORROW $578B V $650BE; Notes that economists view recession risk in the next 12 months as relatively low despite upside and downside risks to the economic outlook (33% chance v 35% in July).

- (CA) Bank of Canada (BOC) Gov Macklem: American companies ares largely paying for the tariffs.

Europe

- (EU) ECB’s Kocher (Austria): Inflation expectations relatively anchored; Comfortable situation for ECB currently.

- AIR.FR prelim Oct aircraft deliveries 78 v 73 m/m; YTD deliveries 585 v 507 m/m - press (previously guided FY deliveries ~820).

Levels as of 01:20 ET

- Nikkei 225 -0.6%, ASX 200 -0.9%, Hang Seng -0.4%; Shanghai Composite -0.4%; Kospi -2.5%.

- Equity S&P500 Futures -0.5%; Nasdaq100 -0.7%; DAX -0.5%; FTSE100 -0.2%.

- EUR 1.1498-1.1522; JPY 153.81-154.48; AUD 0.6518-0.6541; NZD 0.5681-5711.

- Gold -0.5% at $3,994/oz; BTC -1.6% at $116,080; Crude Oil -0.3% at $60.85bbl; Copper -0.7% at $5.0117/lb.