Asia Market Quick Take – 05 November, 2026

Key points:

• Macro: Democrats win both US Senate and House
• Equities: Dow outperforms, up 1,569 points +3%, its biggest one-day gain since April 2025
• FX: Sterling led G10 gains against the dollar
• Commodities: Spot gold surged hitting $4,100 on broad based US dollar weakness
• Fixed income: Treasuries rallied across the curves with yields bull flattening

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Democrats took both chambers of Congress, which markets saw as a check on Trump, boosting stocks and bonds but hurting the dollar and oil. Vice President JD Vance blamed GOP losses on the Iran conflict.
• US private payrolls rose 86,000 in October, beating the 67,000 forecast and marking the strongest two-month gain since June, ahead of Friday’s BLS jobs report.
• US trade deficit narrowed to $105.0bn in September, beating the $107.9bn forecast, as goods exports hit a four-month high.
• Treasury Quarterly Refunding: The US Treasury softened its pledge to maintain auction sizes, signaling possible cuts to long-dated issuance in 2027, while keeping next week’s 3-, 10- and 30-year auctions unchanged at $125bn.
• Trump said GOP losses were largely driven by the Iran conflict and rising gas prices, and signaled no immediate escalation of strikes. A Democratic Congress could curb Middle East military funding, with Chuck Schumer vowing to push to end the conflict.
• ISM Services PMI fell to 54.5 in October, a three-month low, as activity, new orders, and inventories weakened. Employment grew and price pressures eased slightly, but tariffs and fuel costs remain key supply-chain risks, suggesting more pricing pressure ahead.

Equities: 

• US — US equities surged on Wednesday as the Democratic midterm sweep fuelled a broad risk-on rally. S&P 500 closed +1.6% at 7,688.62, the Dow Jones surged +3.0% to 53,356.12 — its biggest single-day gain since April 2025 — and the Nasdaq Composite rose +1.4% to 25,736.51. Tech megacaps led: Amazon +8.3%, Apple +6.6%, Microsoft +6.4%, and Alphabet +5.8%. Healthcare names also rallied sharply on Medicaid expansion hopes, with HCA +6.5%. On the downside, defence stocks fell hard — Lockheed Martin -6.9%, Northrop Grumman -4.5% — while chip stocks lagged, with Nvidia and Micron both lower. Unum Group tumbled ~19% after cutting its full-year earnings guidance. After hours, Qualcomm slid 7.5% on a below-consensus Q1 profit outlook, and Expedia dropped ~8.8% despite raising its full-year gross bookings forecast, as Q4 guidance disappointed. Arm holdings fell 1% despite slightly higher revenue guidance in Q3.
• EU — European equities posted their best session in months on Wednesday, driven by the US midterm result. The Stoxx Europe 600 closed +1.8% at 657.40, the DAX surged +2.2% to 26,437.67 — its third-highest close ever — and the FTSE 100 gained +1.8% to 10,829.21. Banks led the charge, with HSBC +4.8% and Santander among the top contributors. Renewables stocks also rallied sharply, with Orsted and Vestas gaining on expectations of a more favourable policy environment. Logitech rose 8.7% on the SMI. Defence stocks were the key laggard, with a Goldman Sachs basket of European defence names falling as much as 4.1%, its steepest drop in over four months — BAE Systems -4.7%, Thales -3.8%.
• Asia — Nikkei 225 is indicated higher, with the Topix up ~1.9% in early trade as financials and trading houses rallied — Mitsui & Co. rose 4.9% after raising its full-year profit forecast, while Mitsui OSK Lines fell 6.4% on earnings. Kospi is the clear underperformer, falling ~2.0% to 5,569 as AI-linked chip stocks were left behind in the US relief rally — memory names including Micron and Sandisk fell more than 7% in the US session, weighing on Korean semiconductor proxies. DBS reported Q3 net profit -5% y/y to S$2.81bn, below S$2.96bn estimate as trading income fell, offsetting lending and wealth gains. Dividend S$0.81 vs S$0.75 a year ago. ASX 200 rose 1.8% to 8,994.60, led by miners benefiting from the gold and silver surge. Energy stocks across Asia are expected to face pressure following Brent crude's near-9% plunge.

Earnings this week:

• Thursday – DBS, Lumentum, Toyota, Sony, Airbnb, Marriott International, Booking,
• Friday – OCBC, Macquarie, HKEX

FX:

• The euro gained 0.3% to 1.1228, benefiting from broad dollar weakness in the post-election session.
• Sterling was the strongest G10 performer against the dollar, rising 0.4% to 1.3471, with the FTSE 100 also posting a strong session.
• The yen firmed modestly, with USDJPY slipping to 158.43 (-0.2%). Citi noted the yen and Swiss franc are near-term beneficiaries of dollar weakness, though cautioned the move may be short-lived as focus returns to the Fed rate path. BOJ September minutes show intensifying debate over the neutral rate—neither restrictive nor stimulative—as the board raised borrowing costs.
• The offshore yuan was a notable divergence — USDCNH rose 0.1% to 6.6739, with the yuan weakening for a second straight session after the PBOC set a weaker-than-expected fixing for a third consecutive day, even as the broader dollar sold off. The PBOC also raised the foreign-currency deposit reserve requirement ratio to cool yuan appreciation momentum.

Commodities:

• Brent crude plunged 8.7% on Wednesday to $94.62/bbl, extending a multi-day selloff as the Democratic midterm sweep raised hopes for an earlier end to the US-Iran conflict. Brent has now fallen below $100/bbl for the first time since late August. Asian energy stocks are expected to track the move lower at the open.
• Spot gold surged 3.3% to $4,060.70/oz, reclaiming the $4,000 level as the dollar and Treasury yields fell sharply post-election. Silver also rallied 4.9% to $52.22/oz. Combined, gold and silver are estimated to have added approximately $1 trillion in market capitalisation following the election result.
• Copper futures edged up just 0.4% to $6.43/lb (642.90 USc/lb), underperforming precious metals despite the risk-on tone. The Democratic sweep revived debate around the stalled US copper tariff trade, though near-term direction remains uncertain as data centre demand expectations are reassessed.

Fixed income:

• Treasuries rallied across the curve, with yields falling 5–8bps. The 10-year yield closed at 4.89% (-7.9bps) and the 30-year at 5.28% (-5.2bps), while the 2-year fell to 4.59% (-2.2bps). The move was driven by the Democratic sweep reducing expectations of further fiscal expansion and the sharp drop in oil prices easing inflation concerns.
• The Treasury's quarterly refunding announcement triggered mild curve steepening, with the 5s30s spread widening ~3bps on the day to 59.6bps. The revised guidance language — dropping "at least" from the pledge to hold auction sizes steady — was interpreted by dealers as opening the door to cuts in long-dated issuance in 2027, with Wall Street strategists already revising their Treasury supply forecasts.
• The Treasury lowered its Q4 2026 net borrowing estimate to $618bn, down $10bn from the August estimate of $628bn, citing a higher-than-assumed starting cash balance. The revised estimate assumes an $850bn cash balance at year-end.

For a global look at markets – go to Inspiration.

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