Asian Chip Stocks Slide as RBA Hikes and Signals a Pause
Tuesday, 3 November 2026 — Asian stocks fell as the selloff in US chipmakers deepened, with South Korea's Kospi sliding more than 3% after the Nasdaq 100 entered a technical correction on Monday (BBG). The Reserve Bank of Australia raised its cash rate to 4.85%, an 18-year high, in a split vote, and Governor Michele Bullock signalled a wait-and-see approach (BBG). The yuan ended its longest winning streak since 1996 after the PBOC asked banks to hold more foreign currency in reserve (BBG). Americans vote in the midterm elections today, with control of Congress at stake (BBG).
Chart of the day: The RBA's new forecasts against the data
Australia: the RBA's November forecasts (dashed) against August's (dotted) for CPI and trimmed-mean inflation, unemployment, GDP and the cash rate since 2022. Unemployment is now seen rising to 5.1% by the end of 2028, against 4.8% in August. Source: ABS, RBA, Macrobond, GGMA. https://www.rba.gov.au/publications/smp/2026/nov/outlook.html
Our six themes for the day:
The Reserve Bank of Australia raised its cash rate by a quarter point to 4.85%, an 18-year high, in a split vote, and Governor Michele Bullock said the latest increases have not yet started to feed through. Traders took that as a pause signal: money markets now price in only an 8% probability of a further rise in December. The new forecasts show unemployment rising to 5.1% and underlying inflation reaching the target band about six months later than in August. In our view, the RBA has handed the next move to the data, so the Australian dollar will trade on monthly inflation and jobs data.
Brent and WTI both fell more than 7% yesterday after Iran's president said the supreme leader had given the government authority to negotiate, and WTI rose 1.6% to $98.01 this morning. Exports from the Gulf Arab producers are back near pre-war rates, which tempers supply fears. In our view, the risk premium now rests on two dates: tonight's midterm results and Trump's decision on Iran after the vote, with the US still striking Qeshm Island on Monday.
Third, US JOLTS at 16:00 CET. Consensus puts job openings at 7.164 million from 7.079 million, and quits at 3.096 million from 3.066 million. Money markets price in a 74% probability of a Fed rate rise in December. In our view, quits matter more than openings today because they show how confident workers are about switching jobs, and they lead wage growth.
Fourth, New Zealand's labour market report at 22:45 CET. The third-quarter jobless rate is expected to ease to 5.5% from 5.6%, and private wages to rise 0.5% q/q after 0.7%. Money markets price in a 79% probability of an RBNZ rate rise in December.
Fifth, Swiss CPI at 08:30 CET. Consensus is 1.2% y/y from 1.0%, flat on the month, with core inflation at 0.5%. Money markets price in an 11% probability of an SNB rate rise in December. In our view, a headline rate of 1.2% with core still at 0.5% would signal to the SNB that the rise is energy-driven, which argues for patience rather than a hike.
Finally, the US midterms. The first polls close at 00:00 CET. Democrats need a net gain of three seats to take the House and four to take the Senate, and some results could take weeks. In our view, a split Congress is the outcome with the smallest market footprint, while a Democratic sweep would put fiscal policy and the debt ceiling back on the agenda for bonds.
In brief
The RBA raised its cash rate to 4.85%, an 18-year high, in a split vote, and Governor Bullock signalled a pause.
Asian chip stocks slid after the Nasdaq 100 entered a correction, led by South Korea's Kospi.
The yuan ended its longest winning streak since 1996 after the PBOC raised the foreign-exchange reserve ratio.
Oil steadied after Monday's sharp drop on hopes of US-Iran talks.
Americans vote in the midterm elections, with control of Congress at stake.
Today's Macro Roadmap: Swiss CPI is due at 08:30 CET, US JOLTS job openings follow at 16:00 CET, New Zealand's labour market report is out at 22:45 CET, and the first US midterm polls close at midnight CET.
The full briefing
Stocks
The Nasdaq 100 fell 1.4% on Monday, taking it 10% below its peak, and the S&P 500 fell 0.5% (BBG). A gauge of US chipmakers extended a three-day rout to 12% (BBG). Apple fell 2.8% after the close as a forecast of narrower gross margins of 45% to 46% overshadowed revenue guidance of 7% to 10% growth (CNBC). Oracle is raising $20 billion through bonds and new shares to fund its AI build-out, and its shares fell 8.8% (Reuters). It led 17 companies selling high-grade bonds on Monday, the longest lineup since September (BBG). Some of the largest asset managers warned of bubble risks in AI, while Wall Street bank chiefs struck a more bullish tone (BBG). US and European equity futures fell this morning (BBG), with S&P 500 futures down 0.2% at 7,556.
Asian equities
The MSCI Asia Pacific Index fell 1.1%, and Samsung Electronics and SK Hynix both dropped more than 4% (BBG). Taiwan's benchmark lost 3.6% (BBG). China's CSI 300 slipped 0.1% even after the PBOC said it would encourage greater use of its stock-support tools (BBG). Japanese markets were closed for a holiday (BBG). The MSCI Emerging Markets Index fell 0.6% to 1,550.
Australia
The RBA lifted the cash rate by a quarter point to 4.85%, its fifth increase this year (BBG). Bullock said "the last couple haven't even started to flow through yet", and traders pared back bets on further hikes (BBG). The RBA now sees underlying inflation returning to its 2-3% target band about six months later than it assumed in August (BBG).
The ECB
Governing Council member Peter Kazimir said "markets may still underestimate what is required", and that the ECB will have to raise rates again (Reuters). Central Bank of Ireland Governor Gabriel Makhlouf said French politicians need to "get on and fix" the country's public finances, ruling out immediate ECB intervention (BBG). He added that stretched valuations remain a concern for financial stability (Central Bank of Ireland). ECB Vice-President Boris Vujčić said the EU's internal barriers act like a tariff of around 67% on goods and 95% on services (ECB). The Bank of England is all but certain to raise rates on Thursday, but economists and investors diverge on how many more increases follow (BBG). South Korea's inflation slowed to 2.8% in October from 2.9%, while core inflation held at 2.8%, above the 2.7% consensus, strengthening the case for a Bank of Korea hike this month (BBG). A San Francisco Fed paper said El Niño could push US prices up by as much as 1 percentage point in 2027 (USNews).
What's priced for central banks?
Currently, short-term interest rate (STIR) traders price in a 74% probability of a Fed rate rise in December and 19 basis points of tightening by then. For the ECB, they price in an 86% probability of a rate rise in December, and for the BoJ 20 basis points of tightening by December. They fully price in a BoE rate rise in November, and price in an 8% probability of a further RBA rate rise in December, a 79% probability of an RBNZ rate rise in December and an 11% probability of an SNB rate rise in December.
Currencies
The onshore yuan weakened as much as 0.4% to 6.6731 per dollar, halting 13 straight days of gains, after the PBOC raised the foreign-exchange reserve ratio to 6% from 4%, effective 15 November (BBG). The offshore yuan weakened 0.4% to 6.673 per dollar. The Australian dollar fell 0.2% to 0.6982 dollars after the RBA decision (BBG). The euro was little changed at 1.1192 dollars, and the yen firmed 0.1% to 157.82 per dollar. Sterling was little changed at 1.3411 dollars, and one currency strategist said it could fall if the BoE pushes back against rate-rise bets on Thursday (WSJ).
Bonds
Treasuries rose on Monday, and the ten-year yield fell as much as six basis points to under 4.87%, the lowest since 10 September, as falling oil prices eased inflation concerns (BBG). There was no cash Treasury trading in Asia because of the holiday in Japan (BBG), and ten-year Treasury futures fell 0.1%. The US Treasury cut its fourth-quarter borrowing estimate to $618 billion, $10 billion less than in August, and publishes its refunding details on Wednesday (Treasury) (Reuters). AI-related debt from US technology companies may pressure European bond markets, with €40 billion to €60 billion of issuance in the pipeline, according to one fixed-income chief investment officer (Channelnewsasia).
Commodities
Brent settled 7.63% lower at $104.77 a barrel on Monday, and WTI fell 7.36% to $96.46 (Reuters), after Iran's president said the supreme leader had granted the government authority to negotiate (BBG). A draft proposal to end the war is being circulated after Iranian negotiators left talks in Doha (Reuters) (OilPrice). Vice President JD Vance said the US feels "pretty good about the prospects" of a negotiated settlement (Apa). The US struck Iran's Qeshm Island on Monday, the latest in a series of small-scale strikes (WSJ). Exports from Saudi Arabia, the UAE, Iraq and Kuwait rose 10% to 15.53 million barrels a day in October, roughly back to pre-war rates (BBG). WTI rose 1.6% to $98.01 this morning as oil steadied on optimism over US-Iran talks (BBG). Gold fell 0.9% to $3,912 an ounce, and copper fell 3.0%.
Crypto
Bitcoin fell 0.4% to $76,436. Binance customers pulled a net $3.64 billion after withdrawals reopened, and the exchange said it has covered about 95% of the $6.3 billion stolen in last week's hack (Coindesk).
Geopolitics
The US will mediate talks between Ukraine and Russia in Abu Dhabi on 10 and 11 November, according to a US envoy (Reuters).
US politics & New Zealand
Democrats need a net gain of three seats to take the House and four to take the Senate, and the results could take weeks because of rules on counting mail-in votes (BBG). In New Zealand, the governing National Party and Labour are almost level four days before Saturday's election (BBG).
Corporate news
Disney is moving towards thousands of job cuts and has asked some managers to target 20% in annual cost savings (BBG). Nvidia told cloud providers that a majority of their clients must be non-Chinese (FT). Anthropic aims to raise up to $3.5 billion from Japanese investors in its US IPO (BBG), and Elon Musk said serving the Grok chatbot had become too costly relative to revenue (Yahoo). Marvell Technology agreed to buy Lumentum at an enterprise value of $115 billion (BBG).
What I am reading
In other news, this article caught my eye: US Midterms 2026 Preview (LS). LiveSquawk writes that all 435 House seats and 35 Senate seats are contested, and that investors will watch for divided government and its effect on spending and the debt ceiling (LS).
Data and the day ahead
Data and the day ahead: On Monday, the US ISM manufacturing index rose to 55.5 from 54.5, against consensus for 54.5, in the tenth month of expansion (Industryweek). Production grew at a faster pace, while prices paid eased to 75.2 from 77.9 (BBG). Overnight, South Korea's consumer prices rose 2.8% y/y, matching the consensus (BBG).
Still to come: Swiss CPI is due at 08:30 CET, with consensus at 1.2% y/y from 1.0%. US JOLTS job openings follow at 16:00 CET, with consensus at 7.164 million from 7.079 million, alongside factory orders. New Zealand's labour market report is due at 22:45 CET, with the third-quarter jobless rate expected to ease to 5.5% from 5.6%. Bank of Spain Governor José Luis Escrivá speaks in Madrid and Banque de France Governor Emmanuel Moulin speaks in Lyon, both at 11:00 CET. Bank of Canada Governor Tiff Macklem testifies to lawmakers at 17:00 CET, and Bundesbank President Joachim Nagel speaks in Berlin at 18:00 CET. AMD reports after the US close, and the first US polls close at midnight CET (BBG).
Time Stamp: 3 November 2026, 08:08 CET
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Related: Yesterday's Briefing: Oil Falls on Iran Diplomacy as Stocks Steady After Tech Rout · Previously on the RBNZ: RBA Decision, Swiss CPI, JOLTS, NZ Jobs & Midterms (2 Nov)