Risk-off sees Asian equities and crypto plunge, then pare

Asia market update: Risk-off sees Asian equities & crypto plunge, then pare; Democrats sweep Gov and NYC Mayoral races.

General trend and developments

- Kospi started today as yesterday, leading Asia (and global equities) down. At its worst off more than -6.0% and back below 4,000 (was over 4,500 earlier in the week). Later pared half those losses. SK Hynix was down as much as -9.0% but pared back to just -1.0% losses.

- Softbank fell -10% as the Nikkei also fell steeply -4.7%, off >7% from early Tuesday’s record high and back below 50K for first time since Oct 27th . Against the trend Nintendo +10% on significant earnings beat and Switch 2 console and software raised outlook.

- In China, Shanghai and Hang Seng opened -1.0% with giant chip-maker SMIC -2.6% but Shanghai rebounded to be up +0.2% with Hang Seng only slightly down.

- Amid the risk aversion, AUD also fell -0.5% but both it and the Kiwi rebounded back to be slightly UP against the USD.

- Bitcoin fell to less than $99K for first time since June but recovered back to $102K. Ethereum fell not far from $3,000 before recovering to over $3,300. Both Bitcoin and Ethereum spiked below their October flash crash lows.

- US Treas Sec Bessent appeared to affirm Pres Trump’s recent ‘no’ to Blackwell chips being sold to China by saying that “We may sell Blackwells to China once they are outdated tech”.

- Japan’s BOJ Minutes from two decisions ago saw many members express that while U.S. tariff policy had negatively affected the profits of Japanese firms, so far there were no signs that the effects had spread to Japan's economy as a whole.

- Korean won declined to its lowest level since April.

- Democrat Zohran Mamdani won the NYC Mayoral race as expected and Democrats also swept the Virginia and New Jersey Governor races.

- New Zealand unemployment recorded a 9-year high, as expected, but with some analysts believing this may near the bottom of the jobs cycle after a poor year of economic growth is expected to improve in 2026.

- China MOFCOM confirmed it would continue its suspension of 24% US tariffs on some goods, incl some agricultural goods, for one year from Nov 10th, while retaining 10% tariffs on US goods (inline).

- China’s Rating Dog Services PMI for October saw its 32nd month of expansion.

- Indonesia Q3 GDP figures inline.

- US equity FUTs -0.1% to -0.2% during Asia trading (Nasdaq FUTs were down -1.0% earlier).

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

- Wed Nov 5th (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 +0.1% at 8,825.

- Australia Oct Final PMI Services: 52.5 v 53.1 prelim (confirms 21st month of expansion).

- Australia sells A$1.2B v A$1.2B indicated in 2036 Bonds; Avg Yield: 4.3457%; bid-to-cover: 3.52x.

- RBNZ Hawkesby: House prices and credit growth are not raising red flags, so can have additional baseline mortgage loan-to-value ratio settings.

- New Zealand Oct ANZ Commodity Price M/M: -0.3% v -1.1% prior.

- New Zealand Fin Min Willis: Plans to discuss charter with the new RBNZ Gov Breman.

- New Zealand Q3 Unemployment Rate: 5.3% v 5.3%e (9-year high).

- New Zealand RBNZ Financial Stability Report; Notes that risks remain heightened overall.

China/Hong Kong

- Hang Seng opens -1.0% at 25,701; Shanghai Composite opens -1.0% at 3,922.

- China Oct ratingdog PMI services: 52.6 V 52.5E (32nd month of expansion).

- Hong Kong Oct PMI (whole economy): 51.2 v 50.4 prior.

- China MOFCOM; To continue suspension of 24% US tariffs on some goods, incl some agricultural goods, for one year from Nov 10th at 13:01pm local time; To retain 10% tariffs on US goods (inline).

- China Premier Li Qiang: Some uniltateral and protectionist measures have had 'severe impact' on the economic world order; In five years the Chinese economy is expected to exceed CNY170T.

- China PBOC plans second reverse repo round to support liquidity - Chinese press.

- White House formally posts the 10% fentanyl tariff adjustment that was agreed upon by US and China last week.

- Nexperia letter to customers: Until we gain oversight over supply chain at Dongguan site, we cannot see if and when products will be delivered; Actively working to re-establish governance over the site and ramp up capacities from there – press.

- China MOF sells 3-month, 50-year ultra-long treasury bonds.

- (EU) European Commission: Industry indications are that China has been engaging with EU companies in recent days to restore partial flow of chips.

- US Treasury Sec Bessent: Tariffs have helped bring our deficit with China down by 25% - CNBC.

- China PBOC resumed govt bond trading in Oct; Sold CNY20B govt bonds in market – press [overnight update].

- China MOFCOM issues statement on Nexperia; Urges Netherlands to find solution for Nexperia issue; China to ensure stability of global semiconductor supply chain [overnight update].

- China PBOC sets Yuan reference rate: 7.0901 v 7.0885 prior.

- China PBOC Open Market Operation (OMO): Injects CNY66B in 7-day Reverse Repos; Net drains CNY492B v drains CNY358B prior.

Japan

- Nikkei 225 opens -0.4% at 51,291.

- Japan Oct Monetary Base Y/Y: -7.8% v -6.2% prior.

- Japan sells ¥2.6T VS. ¥2.6T indicated in 10-year JGB bonds; AVG yield: 1.6580% V 1.6350% prior; bid-to-cover: 2.97X V 3.34X prior (below 12-month average 3.22x).

- Japan PM Takaichi; Government's job is to ensure companies can continuously raise wages.

- BoJ Sept Minutes (2 decisions ago); Many members expressed the recognition that while U.S. tariff policy had negatively affected the profits of Japanese firms, so far there were no signs that the effects had spread to Japan's economy as a whole.

- Japan Trade Min Akazawa: Parties agreed to cut gasoline tax by end-2025 [overnight update].

Korea

- Kospi opens -1.6% at 4,055.

- Kospi halts sell orders for program trading (Kospi -6.0%) on course for worst close since Aug 5th, 2024 global sell off.

- South Korea Oct Foreign Reserves: $428.8B v $422.0B prior.

- Follow Up: $25.0B to be added to factsheet by South Korea related to the purchase of US weapons - South Korea press.

- North Korea leader Kim 'could' conduct a nuclear test in the 'near future if he wants'; cites the South Korea Spy Agency - Press.

- Reportedly North Korea likely to pursue summit with the US in Mar 2026 – press [overnight update].

- SK Hynix: Korea Exchange earlier issued an “investment caution” on SK Hynix shares, a warning that remains valid for one day, from late Monday, citing the stock’s surge - financial press [overnight update].

- China Pres Xi invites South Korea Pres Lee to visit China in Apr 2026 - South Korean press [overnight update].

- South Korea may be able to launch nuclear-powered sub in mid-2030s if US allows Korea to have (nuclear) fuel - Korean Defense Ministry [overnight update].

Other Asia

- Taiwan Ministry of Econ Affairs: Taiwan to tighten offshore e-commerce platforms oversight - statement.

- Thailand Oct CPI M/M: -0.1% v -0.1%e; Y/Y: -0.8% v -0.7%e.

- Philippines Oct CPI M/M: 0.1% v 0.2%e; Y/Y: 1.7% v 1.8%e.

- Singapore Oct PMI (whole economy): 57.4 v 56.4 prior (highest since Aug 2024).

- Singapore Central Bank (MAS) does NOT seek for the Singapore Dollar (SGD) to be a 'reserve currency' - Local press.

- 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) New York City (NYC) Mayoral Race: Zohran Mamdani wins (as expected).

- (US) Democrat Spanberger wins the Virginia Gov race (as expected).

- (US) New Jersey Governor Race: Democrat Mikie Sherrill wins.

- (US) Fed's Bowman (voter, dove): Basel is priority but can't look at capital in vacuum.

- (MX) Mexico Oct Consumer Confidence: 46.1 v 46.1e.

- (BR) Brazil Fin Min Haddad: Will always comply with fiscal target; To say we are experiencing a fiscal crisis is delusional.

- (US) Pres Trump: The Democrats are far more likely to win the Midterms, and the next Presidential Election, if we don’t do the Termination of the Filibuster (The Nuclear Option!).

- (US) US Pres Trump: SNAP BENEFITS will be given only when the Democrats reopen the govt.

- (US) US Transportation Sec Duffy: May need to shut down some airspace if the Govt shutdown continues.

- (VE) Reportedly Trump aides have asked DOJ for guidance on Venezuela action; White House has developed a range of options for Venezuela, including taking control of oil fields - NYT.

Europe

- (IE) Ireland Oct PMI Services: 56.7 v 53.5 prior.

- EU Council: No pact no EU climate target; new meeting Wed - financial press.

- Nvidia CEO: Germany will be on the largest AI markets in the world.

- (UK) Gov spokesperson: PM Starmer told Cabinet that will not take risks with more borrowings.

Levels as of 01:20 ET

- Nikkei 225 -2.5%, ASX 200 -0.1%, Hang Seng -0.1%; Shanghai Composite +0.2%; Kospi -3.0%.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.2%; DAX -0.2%; FTSE100 -0.3%.

- EUR 1.1480-1.1498; JPY 152.96-153.75; AUD 0.6459-0.6597; NZD 0.5659-5768.

- Gold +0.6% at $3,982/oz; BTC -2.1% at $102,220; Crude Oil flat at $60.56bbl; Copper +0.6% at $4.9552/lb.