Asia Market Quick Take – November 5, 2025

Asia Market Quick Take – November 5, 2025 

Key points:  

• Macro: Trump signs deal to lower tariffs on fentanyl from China 
• Equities: US stocks dip; AMD falls 3% post-hour on Q4 forecast 
• FX: Dollar Index climbs above 100; AUDNZD at 12-year high 
• Commodities: Gold and copper drop; strong dollar pressures commodities  
• Fixed income: Treasury futures rise; SOFR hedges increase amid equity slump 

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Disclaimer: Past performance does not indicate future performance.  

 Macro:  

• Trump signed orders to lower tariffs on fentanyl-related imports from China from 20% to 10% and extend the 10% reciprocal tariff on Chinese goods for another year, effective November 10. These actions aim to stabilize trade and boost cooperation on narcotics enforcement, encouraging China to tackle illicit drug production.
• The White House stated it currently has no interest in selling NVIDIA (NVDA) Blackwell chips to China.
• The RealClearMarkets/TIPP Economic Optimism Index fell 9.1% to 43.9 in November 2025, missing expectations and hitting its lowest point since June 2024. This marks the third month below the neutral 50 mark. Investor confidence dropped 3.1% to 58.6, while non-investor sentiment fell 10.4% to 38.0, widening the gap to 20.6 points. Economic, personal financial, and federal policy outlooks all weakened, and the Financial-Related Stress Index rose 3% to 65.2, indicating high financial strain. Persistent inflation, high food prices, tariff worries, and cautious monetary policy are key issues affecting sentiment.
• The US trade deficit widened to $78.3 billion in July 2025, its largest in four months, exceeding the expected $75.7 billion and June's $59.1 billion. Exports edged up 0.3% to $280.5 billion, with increases in nonmonetary gold and civilian aircraft, while imports rose 5.9% to $358.8 billion, led by nonmonetary gold and telecom equipment. Major deficits were with Mexico ($16.6 billion), Vietnam ($16.1 billion), China ($14.7 billion), and Taiwan ($13.5 billion). Deficits with the EU, India, and Canada were $8.6 billion, $5.5 billion, and $5.4 billion, respectively.
• New Zealand's unemployment rate rose to 5.2% in the June quarter of 2025, up from 5.1% previously, marking the highest level since late 2016. The number of unemployed increased to 158,000, an annual rise of 16,000. Labor force participation fell slightly to 70.5%, while the underutilisation rate increased to 12.8%, indicating growing labor market slack as economic momentum softens.
• The US Logistics Manager’s Index (LMI) held steady at 57.4 in October 2025, reflecting continued sector growth. Inventory levels fell (-5.6 to 49.5) and warehousing utilization slowed (-8.8 to 56.5), offset by rising transportation prices (+7.5 to 61.7) and utilization (+7.3 to 57.3). A slight dip in transportation capacity expansion (+54.5) ended a recent trend of negative freight inversion. The decline in inventories likely signals the start of holiday sales, reducing warehousing tightness and increasing transportation activity.

Equities:  

• US - US stocks tumbled Tuesday, with the S&P 500 down 1.1%, Nasdaq falling 2.1%, and Dow losing 240 points, amid fears of overvalued AI stocks and cautions from Wall Street executives. Notable tech declines included Palantir (-8.1%), Nvidia (-2.7%), and AMD (-2.1%). Concerns grew as the S&P 500’s P/E ratio surpassed 23, its highest since 2000. Defensive sectors like consumer staples and financials fared better, with Berkshire Hathaway up 3.3% as investors sought safe havens. AMD projected fourth-quarter revenue of approximately $9.6 billion, failing to impress investors and causing shares to drop over 3% in extended trading after more than doubling year-to-date. CEO Lisa Su anticipates AI revenue reaching 'tens of billions' by 2027, positioning AI chips within a market exceeding $500 billion.
• EU - European markets declined on Tuesday, impacted by global concerns over inflated tech valuations. The STOXX 50 and STOXX 600 both fell 0.4%, closing at 5,660 and 570, respectively. Leading tech stocks including ASML, SAP, Adyen, and Nokia dropped between 1.5% and 3.1%, as uncertainty about AI and datacenter spending translating into promised revenue weighed on sentiment. AB Foods slipped nearly 3% after reporting earnings and considering a separation of its Primark retail arm from its food division. In contrast, Ferrari rose 3.3% after exceeding Q3 profit expectations and maintaining its annual guidance, while Philips gained 3% due to strong revenue and proactive US tariff mitigation strategies.
• HK - Hang Seng fell 0.8%, closing at 25,952 on Tuesday, as initial gains faded amid sectoral declines. The tech index dropped 1.8% after President Trump announced a ban on Nvidia selling advanced AI chips to China, except for some sales to Beijing. Traders overlooked China's energy subsidies for data centers, while consumer and property shares followed mainland retreats, impacted by plunging US futures amid Fed rate uncertainty and government shutdown concerns. Distressed Chinese real estate names like New World, unveiling a $1.9 billion bond swap plan, and Vanke, facing tighter loan terms, drew attention. Decliners included Li Auto (-3.7%), Innovent Biologics (-3.5%), Zijin Gold (-2.9%), and Xiaomi Corp. (-2.7%).

Earnings this week: 

Wednesday 
Asia: Hong Kong Exchange, Toyota, Itochu, SoftBank, Mitsui & Co. 
Outside Asia: Robinhood Markets, Qualcomm, AppLovin, DoorDash, McDonald’s, Lyft, ARM, Novo Nordisk

Thursday 
Asia: Recruit, Suzuki Motor, DBS 
Outside Asia: Warner Bros. Discovery, DraftKings, Block, Moderna, Airbnb

Friday 
Asia: Mitsubishi Heavy Industries, OCBC, Honda, Macquarie, Fujikura 
Outside Asia: Constellation Energy, KKR

FX: 

• Dollar Index surpassed 100, driven by reevaluated Fed rate cut expectations and risk-off sentiment in US equities, with AI valuation concerns limiting upward momentum. Amid a 35-day US government shutdown, ADP jobs data showing a 28k rise in October is expected post-September's 32k loss.
• AUD rose to a 12-year high versus the NZD, around 1.15, driven by differing monetary policies. The RBNZ cut rates amid rising unemployment, while the RBA held steady, buoyed by strong commodity prices.
• GBP lost ground following Chancellor Reeves' ambiguous pre-budget briefing, pushing GBPUSD to 1.3011, its lowest since April.
• JPY outperformed amid safe-haven demand and potential FX intervention talk, pushing USDJPY to 153.32 lows, while Swiss CPI figures curbed CHF gains.

Commodities: 

• Gold fell the most in a week as the dollar hit a multi‑month high and traders assessed the Fed’s rate path, with a dollar gauge on track for its longest winning streak since July pressuring dollar‑priced commodities. Despite a strong rally since late August that leaves bullion up over 50% this year, higher rates could jeopardise gains; spot gold was down 1.7% at $3,934.77 an ounce, while silver, platinum and palladium also fell.
• Copper extended its slide from a record as a firmer US dollar weighed on commodities, falling 1.8% as dollar‑denominated metals became pricier for holders of other currencies. Codelco eased supply concerns, saying output this year and next will exceed 2024 levels.
• Oil fell for a second session after an API report signalled the largest US crude stockpile build in more than three months. WTI held above $60 a barrel, while Brent settled above $64 on Tuesday. The API estimated inventories rose 6.5m barrels last week; if confirmed by official data later Wednesday, it would be the biggest increase since 25 July.

Fixed income:  

• Treasury futures ended modestly higher after morning gains amid a US equity slump, as executives warned of a pullback and crude fell 0.8%; ranges were narrow and SOFR options saw demand for upside hedges on increased Fed easing expectations. Australian bonds tracked Treasuries higher on softer global risk sentiment, while New Zealand bonds held mild gains after jobs data.

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