Asia Market Quick Take – 03 November, 2026

Key points:

• Macro: US conducts secret strikes on Qeshm island though Trump says talk progresses
• Equities: Marvell to acquire Lumentum in all stock deal. Both fall more than 10%.
• FX: AUDUSD falls to 0.70 handle ahead of RBA rate decision
• Commodities: WTI -7.4% to ~$96.33/bbl, biggest one-day drop in 3+ months
• Fixed income: USTs bull-flattened; 10–30Y yields falling to lowest since Sep

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Diplomatic progress between the US and Iran has eased supply disruption fears, with both President Pezeshkian and President Trump citing advances in Qatar‑mediated talks. The moves come amid US midterms and pressure over high energy costs linked to the Iran conflict.
• US conducted secret precision strikes on Iran’s Qeshm Island on November 2, 2026, targeting air defenses, coastal radars, and drone command centers to protect shipping and US assets in the Strait of Hormuz after the IRGC said it downed US drones there.
• The ISM Manufacturing PMI rose to 55.5 in October 2026 from 54.5, beating expectations and signaling strong expansion, led by higher output and solid new orders, while price pressures eased slightly but remained elevated.
• US construction spending fell 1.9% in September 2026 to an annualized $2.19 trillion, the steepest drop since April 2020 and below expectations, with private residential activity down sharply and total spending 2.7% lower year-on-year.
• The ISM Manufacturing PMI rose to 55.5 in October 2026 from 54.5, beating expectations and marking the second-fastest expansion in nearly four years, with stronger output and orders but still-elevated prices amid ongoing inflation and tariff headwinds.

Equities: 

• US —S&P 500 fell 0.51% to 7,541, the Nasdaq Composite dropped 1.07% to 25,164, and the Russell 2000 slipped 0.21% to 2,806, while the Dow Jones rose 0.41% to 51,984. The Nasdaq 100 entered technical correction territory, down 10% from its peak. The biggest S&P 500 decliners on the day included Lumentum (-18.6%), Marvell Technology (-12.7%), Ciena (-11.3%), Intel (-8.8%), Oracle (-8.8%), and Datadog (-8.1%), while IDEXX Laboratories surged +21.8%. Marvel will acquire Lumentum for $115b in all-stock transaction, with each Lumentum shareholder receiving 4.5 shares of Marvell for each Lumentum share. In after-hours trading, Apple fell ~3% after fiscal Q4 results showed decelerating China revenue and margin pressure, despite a holiday quarter revenue guide of +7%–10% that beat consensus. Palantir dipped 2.6% despite raising its full-year revenue outlook, as sequential commercial customer additions disappointed. ON Semiconductor fell ~2.7% after in-line results, while Grab Holdings rose 5% after beating estimates and lifting full-year EBITDA guidance.
• EU — European equities closed higher on Monday (2 November), with the Stoxx Europe 600 rising 0.4% to 649.44, its highest close since 8 September. The CAC 40 gained 0.98% to 8,047.69, the DAX rose 0.63% to 25,981.09, the Euro Stoxx 50 added 0.73% to 6,176.06, and the FTSE 100 climbed 0.29% to 10,761.33. Cyclicals outperformed as oil's sharp decline boosted travel, construction, and mining stocks. Safran rose 4.5% and CVC Capital Partners surged 7.8%, while Alstom plunged ~26% after issuing a profit warning on cash flow and margins. Energy majors BP (-4.4%), Equinor (-5%), Shell (-3.1%), and TotalEnergies (-2.4%) were among the biggest fallers. Fitch's negative outlook on France's credit rating had limited market impact.
• Asia — Asian markets are trading with a divergent tone on Tuesday (3 November). The KOSPI is the standout underperformer, closing down ~3.3% to 5,666, dragged by tech-sector contagion following the US chip rout and Apple's after-hours miss. Hang Seng (23,393), Nikkei 225 (63,082), and STI (5,304) are showing flat closes as of the latest data, though Japan and Korea futures had pointed lower overnight on the Nasdaq slide. China announced a package of market support measures on Monday, including eased share-buyback rules, a third round of the PBOC swap facility, and a permanent lending programme for buybacks — which helped stabilise HK and China A-share sentiment. Asian energy stocks are under pressure as WTI holds near $96/bbl following Monday's 7%+ plunge. Australian stocks rose ~0.4% ahead of the RBA decision.

Earnings this week:

• Tuesday - Shopify, AMD, Pfizer, Supermicro, Block
• Wednesday – UOB, Qualcomm, Novo, Uber, Macdonalds, Coherent, Cava, ARM
• Thursday – DBS, Lumentum, Toyota, Sony, Airbnb, Marriott International, Booking, Expedia
• Friday – OCBC, Macquarie, HKEX

FX:

• The euro rose ~0.5%–0.6% to above $1.12, its biggest single-day gain in over two weeks, as oil's retreat boosted European currencies. The move came despite Fitch placing France's credit rating on negative outlook, which had minimal market impact.
• The yen hovered near the 158 handle, edging slightly weaker early before stabilising. Japanese Finance Minister Katayama reiterated readiness to respond to excessive currency moves. Hedge funds reportedly trimmed short yen positions further in the latest CFTC data.
• AUD steady in a tight range ahead of today’s RBA decision; AUDUSD near 0.70.
• GBPUSD +0.1% to 1.3407; BOE expected to hike Thu, first in 3+ years.
• The South Korean won was the worst-performing major currency on Monday, falling ~0.9% against the dollar, pressured by tech-sector risk-off and KOSPI weakness tied to the US chip rout.

Commodities:

• WTI crude settled near $96.33/bbl on Monday, falling ~7.4% in its biggest single-day drop in more than three months. Brent closed at $104.77/bbl, down over 7%, after Iran's leadership granted the government authority to pursue further diplomatic talks with Washington, and Gulf Arab producers reportedly resumed crude exports near pre-war rates. President Trump said "no" when asked about resuming strikes on Iran post-midterms.
• Gold traded near $3,950/oz, up ~0.1% on the day, as lower oil and Treasury yields provided a partial tailwind. However, the broader fundamental picture remains challenged — gold is reportedly heading for its worst annual loss in over a decade, having fallen from a record above $5,500 earlier this year amid AI-driven capital flows and elevated real yields.
• LME 3-month copper held at $14,345/tonne, up ~1.5% on Monday, supported by China's market stabilisation measures and improved risk sentiment in cyclical assets as oil's decline boosted industrial demand optimism.

Fixed income:

• Treasuries bull-flattened, with 10- to 30-year yields falling ~4bps to their lowest levels since September, as plunging oil prices eased near-term inflation concerns. The 10-year yield settled near 4.91%, the 2-year at 4.60%, and the 30-year at 5.29%. The move extended October's biggest monthly Treasury advance in over two years.
• Markets are focused on Wednesday's quarterly refunding announcement, with many dealers expecting the Treasury to alter its steady note and bond issuance guidance — the biggest potential overhaul since early 2024. Treasury Secretary Bessent's willingness to intervene in the bond market to drive yields lower has set the stage for a possible shift in issuance composition.
• UK gilts rallied their most since 3 September as energy prices tumbled, with traders paring BOE rate hike bets by up to 8bps, now pricing ~101bps of tightening through end-2027. The OAT-bund spread narrowed 4bps to 161bps and the BTP-bund spread tightened as well, despite Fitch's negative outlook on France. ECB's Kazimir pushed back, warning markets may still be underpricing the required tightening path.

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