Risk assets suffer as markets wait for Nvidia and US jobs

Asia market update: Risk assets suffer as markets wait for Nvidia & US Jobs; JP yields steepen further, JPY off lows amid risk-off sentiment; JP PM Takaichi to meet BoJ Gov Ueda.

General trend and developments

- Markets tentative ahead of Nvidia results tomorrow (Nov 19th) to see if the US AI Capex booms shows any signs of weakness, and the much delayed September jobs report due on Thursday Nov 20th US time.

- Equities, Bitcoin ($89K) fell heavily, with Gold (approaching $4K) and Silver (falling below $49) also struggling. US equity FUTs fell back below Friday’s November lows. JPY +0.3% as risk sentiment worsened. EUR/USD also rose back to 116.

- No such subtlety for pre-IPO company Databricks, said to be in talks to raise capital at EV >$130B.

- Another poor day for Asian equities. Australian equities fell to levels not seen since June, 2025, while the Kospi and Nikkei both saw further declines of ~3%, Nikkei falling below 49K and the Kospi back below 4K. China EV maker Xpeng fell >10% for its worst day since April on missed Q4 Rev guidance.

- Japan Fin Min Katayama expressed “deep concern” with FX moves (but no talk of intervention yet.).

- RBA Nov Minutes affirmed members see the economy as balanced but having two-way risks; Not possible to be confident which scenario more likely. Members expressed they could afford to be patient to see which scenario plays out.

- A series of Japanese ministers attempted to quell the current China-Japan spat over Taiwan, as Japanese diplomats also scheduled to meet with counterparts in Beijing today. US Ambassador to Japan offered full-throated support of US commitment to defend Japan, including Japan’s Senkaku Islands near Taiwan.

- Japan yield curve continues to steepen sharply, with 20-years rising (+7bps) to their highest (2.810%) since July, 1999, ahead of the 20-year JGB auction tomorrow. Meanwhile the 40-year JGB yields rose by 8bps to record 3.68% (Contract life since 2007. Note the 40-year JGB auction on Nov 26th). Curve steepening exacerbated by a slight fall at the front end 2-years.

- After the yields rose, press reports that Japan LDP's Nakamura said to have suggested ¥25T extra budget to PM Takaichi (current estimates are for ¥17T).

Note that as this report goes to press Japan PM scheduled to meet BOJ Gov Ueda.

- Bitcoin hit fresh multi-month lows, dipping into the $89K handle.

- Apple’s iPhone sales said to have 'surged' in China, reaching 25% share - Counterpoint.

- US equity FUTs as much as -0.7% to -0.9% during Asian trading (pared some losses later).

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

- Wed Nov 19th JP Oct Trade Balance, UK Oct CPI, ID Rate Decision, (Wed night US FOMC Minutes).

- Thu Nov 20th CN Nov LPR rates, JP BOJ’s Koeda, (Thu night US Sept Jobs – delayed release).

- Fri Nov 21st JP Oct CPI, Nov Global Flash PMIs.

Holidays in Asia this week

- No holidays in Asia this week.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.8% at 8,567.

- Australia Central Bank (RBA) Nov Minutes: Sees economy balanced but having two-way risks; Not possible to be confident which scenario more likely.

- Australia sells A$300M v A$300M indicated in 4.75% Jun 2054 Bonds; Avg Yield: 5.0603% v 4.8213% prior; bid-to-cover: 2.85x v 4.05x prior.

- New Zealand Oct Non Resident Bond Holdings: 60.3% v 59.6% prior.

- RBNZ: New Zealand business' 2-year inflation expectations fall to 2.39%.

- New Zealand Treasury issues NZ$6B in May 2036 Govt bonds.

China/Hong Kong

- Hang Seng opens -0.8% at 26,172; Shanghai Composite opens -0.3% at 3,962.

- China Defense Ministry: To carry out joint naval patrol with Vietnam in waters of Beibu Gulf, Nov 19-20.

- China MOF offers spread of 28-38 bps on up to €4B Euro-denominated bond issuance.

- Chinese Premier has said to pledge closer cooperation with Russia; China welcome agricultural products from Russia - press.

- (US) Agriculture Sec Rollins: Confident that China will buy US soybeans - Fox Business [overnight update].

- (DE) Germany Chancellor Merz: China is becoming outwardly more aggressive and inwardly more repressive [overnight update].

- Germany Fin Min Klingbeil: Seeking cooperation with China; Overcapacities have been discussed because jobs are at risk [overnight update].

- China Oct Client FX Net Settlement (CNY-denominated): 152.0B v 367.8B prior [overnight update].

- China PBOC sets Yuan reference rate: 7.0856 v 7.0816 prior.

- China PBOC Open Market Operation (OMO): Injects CNY408B in 7-day Reverse Repos; Net injects CNY3.7B v injects CNY163B prior.

Japan

- Nikkei 225 opens -1% at 49,894.

- Japan Trade Min Akazawa: No change so far in China's rare earth export controls.

- Japan Fin Min Katayama: Expresses deep concern with FX moves.

- Japan LDP's Nakamura said to have suggested ¥25T extra budget to PM Takaichi.

- US Ambassador to Japan: US is fully committed to defense of Japan, which includes Senkaku islands - post on X.

- Japan Defense Min Koizumi: PM Takaichi's remarks on Nov 7th do not change Japan govt stance - financial press.

- Japan Chief Cabinet Sec Kihara: Issued advisory to Japanese living in China to be aware of safety - financial press.

- Japan Foreign Min Motegi: To assess impact of China actions, respond appropriately - financial press.

- Japan 30-year JGB yield rises by 2.5bps to 3.280% (later +4bps to 3.295%).

- Japan 20-year JGB yields rise +4bps to 2.780%, highest since July 1999.

- Japan 40-year JGB yields rise by 8bps to record high 3.680% (contract life since 2007).

- Japan Economic Revitalization Minister Kiuchi: There's no change to our view the Japan's economy is improving moderately following the release of Q3 GDP.

- NVIDIA and RIKEN Advance Japan’s Scientific Frontiers With New Supercomputers for AI and Quantum Computing.

- Japan PM Takaichi said to meet with BOJ Gov Ueda on Nov 18th at 01:30ET (06:30GMT) - press.

- Former BOJ board member Kataoka: BOJ should move cautiously in policy normalisation, would be premature to hike interest rates in Dec or Jan.

- US Navy Chief Caudle: Concerned about Chinese shipbuilding capabilities; Not surprised by PM Takaichi's comments on Taiwan, understand her concerns - comments in Tokyo [overnight update].

Korea

- Kospi opens -1.1% at 4,042.

- South Korea Q3 Household Credit (KRW): 1,968.3T v 1,952.8T prior.

- South Korea Dep Defense Min Kim: South Korea proposes military talks with North Korea – Yonhap [overnight update].

Other Asia

- (TW) China Defense Ministry: Urge US to stop arming Taiwan and avoid (harming) US-China military cooperation.

- India Oct Trade Balance: -$41.7B v -$30.0Be [overnight update].

- Thailand Commerce Ministry Official Chotima: Confident US still aiming to finish trade negotiations by end-2025; Thailand ready to continue talks - comments following Trump - Thailand PM Anutin phone call [overnight update].

- Indonesia said to impose gold export levy from 2026 - local press [overnight update].

North America

- Apple’s iPhone sales said to have 'surged' in China, reaching 25% share - Counterpoint.

- (US) Follow up: US Transportation Sec Duffy: Air travel back to where we were pre-shutdown - Fox News interview.

- (CA) Canadian House of Commons votes to back Fed Budget; PM Carney to remain in office.

- (US) Fed's Waller (voter): Worries that restrictive monetary policy is weighing on the economy; Recent data should not deter Fed easing; Supports Dec rate cut for 'Risk management'.

- (VE) Reportedly Trump Admin officials mull allowing Venezuela Pres Maduro to leave the country; Considering options if Maduro is ousted - Politico.

- (CA) Canada OCT CPI M/M: 0.2% V 0.2%E ; Y/Y: 2.2% V 2.1%E.

- (US) Aug construction spending M/M: +0.2% V -0.1%E.

- (US) Nov Empire Manufacturing: 18.7 V 5.8E (1-year high and above all estimates); But notes optimism for the future dipped; New Orders: 15.9 v +3.7 prior.

- (US) Fed's Jefferson (voter in 2025 & 2026): Still not clear how much government data will be available for the next Fed meeting; Need to proceed slowly as monetary policy approaches the neutral rate.

Europe

- UK BOE said to be open to shared services, vanilla derivatives in ring-fenced banks - press, citing sources.

- (RU) US Treasury OFAC Analysis: Rosneft and Lukoil sanctions are likely to have long-term negative impact on the quantity of Russia oil sold.

- UK plans to increase the cap on bank deposit insurance to £120.0K in Dec; to increase the guarantee on UK bank deposits - US financial press.

- (EU) ECB's Makhlouf (Ireland): ECB is in a good place.

- (UK) BOE’s Mann: Normalization of wages is under way; DMP price growth is not consistent with 2% inflation target.

- (RU) US Senator Lindsay Graham (R-SC): We have Pres Trump's blessing to advance the bipartisan Russia sanctions bill.

- (DE) Germany Chancellor Merz: China is becoming outwardly more aggressive and inwardly more repressive.

Levels as of 01:20 ET

- Nikkei 225 -2.7%, ASX 200 -1.9%; Hang Seng -1.6%; Shanghai Composite -0.8%; Kospi -3.3%.

- Equity S&P500 Futures -0.4%; Nasdaq100 -0.5%; DAX -1.3%; FTSE100 -0.7%.

- EUR 1.1585-1.116.04; JPY 154.82-155.38; AUD 0.6465-0.6499; NZD 0.5639--5660.

- Gold -1.4% at $4,016/oz; BTC -5.0% at $90,580; Crude Oil -0.7% at $59.46bbl; Copper -0.7% at $4.9567/lb.