Newsquawk Daily Asia-Pac Opening News - 5th November 2026

US stocks rallied following the Democratic sweep in the midterm elections. The initial reaction overnight was to sell equity futures, but the move was swiftly pared as Louisiana, a state with significant data centre exposure, stayed Republican, supporting hyperscalers. Also supportive of hyperscalers was that the recent weakness in neocloud stocks has prompted speculation that if neocloud providers lack the capacity to meet elevated AI demand, hyperscalers may step in and absorb the excess demand. There were plenty of earnings to digest, with strong results from AMD, SMCI and MCD, although DDOG earnings disappointed and weighed on other software names, with both AMD and SMCI paring initial strength. In terms of sectors, Consumer Discretionary, Real Estate, and Financials outperformed, while Industrials and Energy were the only sectors to close in the red, with Industrials pressured by concerns over potential Democratic AI regulation, while Energy was the clear laggard as crude prices tumbled. USD was pressured, with yields also lower, given the Democratic sweep in the US midterm elections, which saw the greenback soften, as expected. Rabobank wrote that, irrespective of the historic moments the midterm elections have provided, the Iran war could remain the bigger focus for inflation and central bank policy, and therefore for the USD. In terms of data, ISM Services fell more than expected, although the internals were mixed as business activity and new orders declined, but employment rose and the price index fell. Looking ahead to the rest of the week, the main highlights include the US jobs report and Fed's Williams on Friday. Looking ahead, highlights include South Korean Current Account, Australian Trade Data, Philippines CPI, Indonesia GDP, Singapore Retail Sales, BoJ Minutes from the September Meeting, Supply from Japan. SNAPSHOT STOCKS S&P 500 +1.6% Nasdaq Comp. +1.4% DJIA +3.0% Russell 2000 +1.6% ES Dec'26 +1.8% RTY Dec'26 +1.6% NQ Dec'26 +1.2% YM Dec'26 +3.3% FX DXY -0.3% (101.54) EUR/USD +0.3% USD/JPY -0.1% GBP/USD +0.4% BONDS US T-Note Dec'26 +12.5 ticks 10yr Bund Dec'26 +31 ticks US 10yr Yield 4.88% German 10yr Yield 3.29% ENERGY & METALS WTI Dec'26 -8.4% Brent Jan'27 -8.7% Spot Gold +3.3% LME Copper -0.2% CRYPTO Bitcoin +3.6% Ethereum +6.9% As of 21:50GMT/16:50EST LOOKING AHEAD Highlights include South Korean Current Account, Australian Trade Data, Philippines CPI, Indonesia GDP, Singapore Retail Sales, BoJ Minutes from the September Meeting, Supply from Japan. Click for the Newsquawk Week Ahead. IRAN CONFLICT US President Trump said it was largely true that Republicans lost the midterm elections because of the war in Iran, as the conflict had driven gasoline prices higher in the short term. Trump also stated that Iran could not be allowed to obtain a nuclear weapon and that military action had been necessary, while he added that he would probably get along with Democrats unless they wanted to be destructive. US President Trump said War Secretary Hegseth is doing a very good job and he is not replacing him, when asked if he is considering replacing him. US President Trump had reportedly been asking advisers whether Defence Secretary Hegseth should remain in his position following the Republicans' heavy losses in Tuesday's midterm elections, according to CBS News citing sources. Furthermore, some White House aides expect blame for the GOP losses to fall on US CENTCOM Commander Cooper and Chairman of the Joint Chiefs of Staff General Caine, both of whom played significant roles in shaping guidance on the Iran war, while other sources said Trump had not decided whether to replace Hegseth, and that the prospect of a Democratic impeachment effort against him could increase if Democrats secure strong majorities in both chambers. White House said US President Trump had complete confidence in Defence Secretary Pete Hegseth, according to CBS citing a US official. US military sources suggested Defence Secretary Hegseth could face impeachment by Democrats or dismissal by President Trump over the Iran war, amid growing dissatisfaction within the military, according to The Times' Larisa Brown. US VP Vance said the war was the reason Republicans lost the midterm elections. US Senate Democratic Leader Schumer said Democrats would end the war, adding that some Republicans had joined them, while he commented that Americans did not understand why the war against Iran had been launched and that it should come to an end. US Treasury issued fresh Iran-related sanctions. The course of US-Iranian negotiations will become clearer on Friday, and significant progress has been made, according to Al Jadeed citing Arab diplomatic sources. A delicate phase precedes the new Congress taking office, during which Trump may decide to launch a war on Iran, according to Al Jadeed citing US sources. However, it was noted that US President Trump may face restrictions from his team in the next two months due to the repercussions of the war on Iran and accusations by Democrats that he is involved in major corruption cases. Israel reportedly prepares for a possible surprise Iranian attack as US President Trump weighs resuming the war, while Israel’s high security alert remains unchanged since before last week’s elections, with no significant changes to operational preparations, according to i24 News journalist Guy Azriel. Gulf states categorically reject any new war on Iran for fear of plunging the region into chaos according to Al Jadeed citing sources. IAEA chief Rafael Grossi said the agency found no nuclear activity or equipment inside Pickaxe Mountain during its last inspection, adding that Tehran did not possess a nuclear weapon, according to Iran-linked Sabereen. Pakistani PM Sharif described recent diplomatic engagements with Iran and other regional countries as very positive, reaffirming Islamabad's efforts to reduce tensions and restore peace in the Middle East, according to Nournews. Iran's leader warned of a much broader response if the US repeated its aggression, while dismissing expectations of any change in US behaviour following the midterm elections, according to Fars. Tehran would not make concessions to Washington. IRGC political affairs official said Iran would expel the US from West Asia and the Persian Gulf, according to Al Alam. IRGC commander adviser said Iran would respond to any US or Israeli attack with a new doctrine and technology, warning that retaliation could extend beyond US bases in countries such as the UAE and Bahrain, according to NAYA. The adviser added that if countries including the UAE and Bahrain allowed US forces to use their bases to attack Iran, Tehran's response would extend beyond those facilities. IRGC claimed it had shot down two US drones, an MQ-9 Reaper over the Strait of Hormuz and an MQ-1C near Qeshm Island, while warning of possible US strikes on Iranian missile launch sites in the coming hours, according to Sabereen. Yemeni Armed Forces spokesperson claimed six ballistic missiles struck Saudi-backed forces in eastern Al-Jawf province in Saudi Arabia, causing several casualties and destroying military equipment, according to Fars News. Yemeni Armed Forces said Saudi airspace was unsafe, except for the airspace over the holy sites in Mecca and Medina. Explosions were heard from the headquarters of Kurdish separatists in Erbil, Iraq, according to Fars, citing Arab sources. US TRADE US stocks rallied following the Democratic sweep in the midterm elections. The initial reaction overnight was to sell equity futures, but the move was swiftly pared as Louisiana, a state with significant data centre exposure, stayed Republican, supporting hyperscalers. Also supportive of hyperscalers was that the recent weakness in neocloud stocks has prompted speculation that if neocloud providers lack the capacity to meet elevated AI demand, hyperscalers may step in and absorb the excess demand. There were plenty of earnings to digest, with strong results from AMD, SMCI and MCD, although DDOG earnings disappointed and weighed on other software names, with both AMD and SMCI paring initial strength. In terms of sectors, Consumer Discretionary, Real Estate, and Financials outperformed, while Industrials and Energy were the only sectors to close in the red, with Industrials pressured by concerns over potential Democratic AI regulation, while Energy was the clear laggard as crude prices tumbled. SPX +1.59% at 7,690, NDX +0.91% at 28,437, DJI +3.03% at 53,357, RUT +1.57% at 2,857. Click here for a detailed summary. TARIFFS/TRADE US extended national emergency orders related to China and Iran. Canada's minister responsible for US trade said he would speak with US Commerce Secretary Lutnick and USTR Greer in the coming days. Canada would extend remission measures for certain Chinese steel and aluminium products not manufactured domestically until the end of 2028, the minister said. NOTABLE HEADLINES US President Trump said he can work with Democrats on 'financial ideas' and that they would be 'mutually good', according to CNBC. US House Speaker Johnson would not run for House minority leader, while Representative Jordan plans to run for House Republican leader after Speaker Mike Johnson cleared the way, and Steve Scalise was expected to announce his candidacy today, according to CNN. US House Democratic Leader Jeffries said they would pass a bill to stop Trump tariffs and end the Iran war, adding that Medicaid cuts must be reversed and ACA tax credits extended. Prospective House Speaker Hakeem Jeffries said Katherine Clark would be the next House majority leader. DATA RECAP US ISM Services PMI (Oct) 54.5 vs. Exp. 54.8 (Prev. 54.9) US ISM Services Business Activity (Oct) 53.8 (Prev. 56.5) US ISM Services New Orders (Oct) 55.9 (Prev. 59.8) US ISM Services Prices (Oct) 73.0 (Prev. 74.0) US ISM Services Employment (Oct) 51.4 (Prev. 50.1) US S&P Global Services PMI Final (Oct) 56.1 vs. Exp. 57.9 (Prev. 58.8) US S&P Global Composite PMI Final (Oct) 55.9 vs. Exp. 57.6 (Prev. 58.4) US Trade Balance (Sep) -105.00B vs. Exp. -108B (Prev. -105.60B) US Exports (Sep) 321.5B (Prev. 315.2B) US Imports (Sep) 426.6B (Prev. 420.8B) US ADP Employment Change (Oct) 86K vs. Exp. 69K (Prev. 90K) FX USD was pressured, with yields also lower, given the Democratic sweep in the US midterm elections, which saw the greenback soften, as expected. Rabobank wrote that, irrespective of the historic moments the midterm elections have provided, the Iran war could remain the bigger focus for inflation and central bank policy, and therefore for the USD. In terms of data, ISM Services fell more than expected, although the internals were mixed as business activity and new orders declined, but employment rose and the price index fell. Looking ahead to the rest of the week, the main highlights include the US jobs report and Fed's Williams on Friday. EUR mildly gained, albeit with price action choppy as participants also got to digest inflation data, in which the EZ HICP flash reading was in line and core was steady at 2.5%, while the final EZ composite PMI was revised lower. There were also comments from ECB's Kazaks that there may be a gradual increase in interest rates, and the Netherlands nominated Knot for the role of ECB President. GBP strengthened although further upside was capped by resistance at the 1.3500 level and ahead of tomorrow's BoE rate decision, with money markets pricing a 95% likelihood of a 25bps hike. JPY eked slight gains on the day in indecisive trade and amid the softer buck. Riksbank raised its policy rate by 25bps to 2.00%, as expected, while it stated that if the outlook for inflation and economic activity holds, it is likely that the policy rate will be raised further in the coming year. Polish Interest Rate Decision (Nov) 3.75% vs. Exp. 3.75% (Prev. 3.75%) FIXED INCOME T-notes rallied with Treasuries higher across the curve, led by the belly, in the wake of the Democratic sweep in the midterms, while the lower-yield environment was supported by collapsing oil prices, with Brent crude sliding over USD 10/bbl at one point, helping ease inflationary concerns amid prospects of a quicker end to the US/Iran war. Furthermore, expectations of enhanced regulation could weigh on growth, while further fiscal expansion may be constrained as Republicans will no longer be able to pass their reconciliation 3.0 package, with the prospects of additional tax cuts also reduced under a Democratic Congress. Another consideration is policy uncertainty, with Trump stating ahead of the midterms that he would become "Mr Veto" in the event of a Democratic sweep, potentially making further Democratic spending measures difficult to enact. US Treasury buyback (10-20yr, max USD 6bln, liquidity support): USD 6bln accepted of USD 39.64bln offered; 7 of 40 eligible issues accepted. COMMODITIES Oil prices tumbled after the Democratic sweep reduced the likelihood of an extended US/Iran war, while Trump appeared more conciliatory after the midterms than expected and there was also a prior FT report that Trump said the US has no immediate plan to strike Iran. Elsewhere, the Quarterly Refunding Announcement was in focus. Auction sizes for the upcoming quarter were left unchanged, as expected, but the Treasury tweaked its guidance by dropping the “at least” language when referring to maintaining auction sizes over the next several quarters, potentially opening the door to increased issuance sometime in 2027. US EIA Crude Oil Stocks Change (Oct/30) -0.865M vs. Exp. 0.9M (Prev. -1.892M). US President Trump’s diesel deal with Russian President Putin falters as US-bound tankers veer off course, according to FT. UAE considers building a third crude oil pipeline to bypass the Strait of Hormuz. Iraq's oil exports averaged around 3.5mln bpd in October, including approximately 400k bpd via Turkey's Ceyhan port. GEOPOLITICAL RUSSIA-UKRAINE Kremlin spokesperson Peskov said a phone call between Russian President Putin and US President Trump was not currently planned. ASIA-PAC NOTABLE HEADLINES China and Canada held their first energy ministerial dialogue via video conference, with both sides agreeing to strengthen cooperation in traditional energy, renewables, civil nuclear power and uranium resources, according to a statement. Both sides are encouraging energy companies to explore cooperation in trade, technology, investment and projects. Japanese Chief Cabinet Secretary Kihara said authorities would closely monitor market movements with a high sense of urgency. Japan is to ask tech companies based in the US to share previously undisclosed vulnerability information, Nikkei reports, citing sources. Chinese chipmaker YMTC reportedly put its USD 4.9bln Shanghai IPO on hold, with a potential listing in H1 2027 subject to market conditions, according to sources. EU/UK NOTABLE HEADLINES ECB's Kazaks said rates need to rise if inflation risks are spreading and that there may be a gradual increase in interest rates. ECB's Moulin said the solution to France's financial problems is in France and not in Frankfurt, while he added that banks can deal with rising rates and there is no longer a risk of a loop between banks and sovereigns. Furthermore, he is sceptical regarding the French government's plan to raise the regulated savings cap. Netherlands nominated Knot for the role of ECB President. Separately, former ECB official Knot said core inflation and second-round effects would likely pick up, meaning the ECB may have to approach its 2% goal from above more frequently. He added that the central bank would respond with a 'hawkish-leaning' policy when appropriate, while warning that Europe's lack of integrated capital markets was harming the region. DATA RECAP UK S&P Global Services PMI Final (Oct) 52.8 vs. Exp. 53.1 (Prev. 52.1) UK S&P Global Composite PMI Final (Oct) 52.9 vs. Exp. 53.1 (Prev. 52.0) German S&P Global Services PMI Final (Oct) 52.5 vs. Exp. 51.7 (Prev. 52.9) German S&P Global Composite PMI Final (Oct) 53.4 vs. Exp. 52.8 (Prev. 53.8) French S&P Global Services PMI Final (Oct) 46.2 vs. Exp. 48.4 (Prev. 51.2) French S&P Global Composite PMI Final (Oct) 46.6 vs. Exp. 48.4 (Prev. 51.1) European S&P Global Services PMI Final (Oct) 51.4 vs. Exp. 51.7 (Prev. 53.0) European S&P Global Composite PMI Final (Oct) 51.7 vs. Exp. 51.9 (Prev. 53.1) European HICP (Oct YY) 4.0% vs. Exp. 4.0% (Prev. 3.8%) European Core Inflation Rate YoY Flash (Oct YY) 2.5% vs. Exp. 2.5% (Prev. 2.5%)