Morning wrap (07.11.2025)

Asian-Pacific indices trade mixed. Chinese indices are down 0.10–0.70%, Japan’s JP225 gains 0.05%, while Australia’s AU200.cash falls 0.54%.

On the forex market, volatility remains low in the first part of the day. The U.S. dollar edges higher (USDIDX +0.17%). Among the weakest currencies are the New Zealand dollar and Japanese yen, both down about 0.10–0.20%. On the other hand, the Australian dollar is among the top performers, rising 0.10–0.15%.

Tesla has approved a massive 10-year performance-based pay package for Elon Musk worth $1 trillion, tied to milestones such as 20 million vehicles sold annually, 1 million robotaxis, 1 million humanoid robots, and an increase in market capitalization from $1.5T to $8.5T. For comparison, in 2024 Tesla delivered over 1.7 million EVs.

The White House announced that it will not issue any export licenses for Nvidia’s restricted AI chips designed for China, reversing earlier signals of flexibility from President Trump.

Beth Hammack of the Cleveland Fed stated she wants policy to remain “on the restrictive side”, noting that while no further hikes are the base case, they cannot be ruled out.

Alberto Musalem of the St. Louis Fed highlighted the resilience of the U.S. economy, expecting a slowdown in Q4 followed by a rebound in 2026, while warning that tariffs and large deficits pose upside inflation risks.

Fed officials continue to emphasize a cautious stance, signaling the central bank is not in a rush to ease policy aggressively.

The People’s Bank of China withdrew a net 1.57 trillion yuan from the banking system through open-market operations — the largest liquidity reduction since January 2024.

In Japan, household spending rose 1.8% y/y in September (the fifth consecutive increase) but missed forecasts of +2.5%, driven mainly by automotive and recreation spending.

Exports fell 1.1% y/y (in USD) despite expectations of growth, while imports rose only 1.0%, also below forecasts.

JPMorgan told clients that the bull market in equities remains intact, and that any correction should be seen as a buying opportunity. The bank pointed to resilient U.S. economic growth and strong corporate earnings, forecasting the S&P 500 to “break above 7000.”

Trump met with Central Asian leaders and announced plans to deepen cooperation on critical raw materials to reduce dependence on China. An example is Cove Capital’s purchase of a 70% stake in Kazakh deposits. The initiative is described as strategic in nature.