Key Highlights

• Global stocks continue to underperform after a weak session on Wall Street.
• Bitcoin extends slide to below $82,000 amid a pick-up in liquidations.
• MNB Deputy Governor Barnabás Virág unexpectedly resigns, causing HUF to fall.

Chart of the Day

APAC duration demand at lows as region gears up for stimulus

^{Source: BNY}

As expectations for Federal Reserve easing are pushed further out, the U.S. dollar yield remains the key anchor for global duration through to year-end. With limited active liquidation of long-dated Treasurys even earlier in the year, there is little scope for renewed rotation into U.S. fixed income, though Treasurys continue to anchor global portfolios and have weathered volatility well. Equity markets have found brief relief, but early signs of rotation are emerging as investors seek well-funded safety assets that could also benefit from a stronger yield environment. In this context, Asia-Pacific (APAC) markets merit renewed attention: Japan’s new stimulus, South Korea’s supplementary budgets and China’s fiscal efforts to boost household welfare all point to more proactive policy support. These economies are largely domestically funded but still offer room for selective foreign participation, though only at the right yield, price and FX levels. Our holdings data show weak demand at the front end of APAC curves, with only the 3-5y segment performing above its 12-month average, while interest in the 1-3y segment has declined sharply. As most regional central banks lean toward easing and Japan delays rate hikes, yield-sensitive investors have little incentive to extend duration amid uncertain risk sentiment. Longer-dated holdings have been steadier but are now seeing outflows, particularly in Japan, where yen weakness has eroded confidence. Some regional flows also appear to be shifting from local debt into equities, reflecting both valuation pressures and changing risk appetite. While near-term price effects may weigh on performance, higher yields could eventually draw local savings back into bonds. The most constructive outcome would be for governments to accelerate fiscal stimulus before yields rise too far, supporting a turnaround in growth expectations – like the fundamental improvement seen in Germany’s debt market structure earlier this year. 

What's Changed?

Caution is dominating trading across global markets today. The reversal staged by U.S. shares yesterday has led to further selling in APAC and EMEA. U.S. futures are set up for more selling, with Bitcoin and technology the focus. This is now the worst week for equities since April, and one that has contained the largest inter-day reversal in shares for the NASDAQ on record. Government spending isn’t turning sentiment. Japan’s new PM unveiled $112bn in stimulus, but the country’s equities still fell more than 2.4%. South Korea dropped even further, with the Kospi shedding 3.8%. The MSCI rebalancing on Monday, with a shift toward tech, isn’t sufficient to redress the situation either. Budgets will remain a key consideration for the market, with the U.K.’s turn next week key for GBP and gilts. If there is to be a reversal of the reversal, rates will be key. Yesterday’s U.S. jobs report for September didn’t help clarify Fed easing expectations for December. The rise in unemployment and increase in jobs are at odds with the other economic data on growth. The PMI and consumer sentiment reports today will be viewed in this context. Oil dropping by 2.5% suggests global growth doubts have become a driving force again. However, anything that gets U.S. 10y yields below 4% will help counter the pain from equities. What is notable beyond stocks and bonds is the currency world, where relative stability reigns: JPY has rallied from its 158 tests, CHF is flat and USD is up over 100 on the dollar index. The return of safe-haven FX could be key for another risk – washing out carry trades – as MXN, TRY and INR are all lower. The risk of a larger reversal will pivot on how policymakers react, with financial conditions forcing a rethink. The credit leg of technology will remain the barometer. As such, if there is a hope for stability today, it rests on the Fedspeakers or on new investment headlines. 

What You Need to Know

Japan’s government has approved a ¥21.3tn ($135bn) economic stimulus package, the first major initiative under Prime Minister Sanae Takaichi. The plan includes ¥17.7tn in general account spending and ¥2.7tn in tax cuts, marking the largest stimulus since the pandemic. The move sparked concern over fiscal discipline, pushing the yen to 10-month lows and super-long bond yields to record highs. Takaichi said funding would rely on higher-than-expected revenues and additional bond issuance, though total issuance for the fiscal year will remain below last year’s ¥42.1tn. A supplementary budget to finance the package is expected to be approved by parliament before year-end. Nikkei -2.405% to 48625.88, USDJPY -0.42% to 156.81, 10y JGB -4.6bp to 1.778%.

Hungary’s forint fell as much as 0.8% against the euro, its sharpest decline in over six weeks, after central bank Deputy Governor Barnabás Virág unexpectedly resigned before his term was due to end next June. The currency later traded 0.3% weaker, at 383.57 to the euro. Péter Benő Banai, a senior adviser to Governor Mihály Varga, will assume Virág’s responsibilities, while Deputy Governor Zoltán Kurali remains in charge of monetary policy. Analysts said Virág’s exit will not alter the central bank’s hawkish stance, prioritizing stability and inflation. Markets reacted nervously to the sudden resignation, reflecting heightened sensitivity to policy uncertainty amid global volatility in risk assets. Virág will stay on as an adviser to Varga. Budapest SI -1.002% to 106487.9, EURHUF +0.398% to 383.78, 10y HGB +3bp to 7.1%.

The U.S. has proposed a 28-point peace plan urging Ukraine to cede occupied territories, including Donetsk, and accept Russian sovereignty over them in exchange for ending the war. The draft, seen by the Financial Times, bans Ukraine’s future NATO membership and limits its military to 600,000 troops, while offering Russia major concessions such as phased sanctions relief, G8 reinstatement and shared investment in rebuilding Ukraine using $100bn in frozen Russian assets. Ukrainian officials say Washington is pressuring Kyiv to sign before Thanksgiving despite inadequate security guarantees. The plan, described as a “working document,” would be overseen by a Trump-led peace council and strongly favors Russian interests. German Chancellor Friedrich Merz has held an “urgent” call with leaders on the proposal. PFTS 0% to 458.79, USDUAH +0.166% to 42.28,10y UGB -3.6bp to 14.731%.

Bitcoin is heading for its worst month since June 2022, falling 23% in November and over 30% from its early-October record high. The token dropped as much as 6.4% on Friday to $81,629 before recovering slightly, while Ether slid 7.6% below $2,700. The selloff, triggered by October’s $19bn leveraged liquidation that erased $1.5tn in crypto value, has been worsened by another $2bn in liquidations this week. Institutional demand remains weak, with U.S.-listed Bitcoin ETFs seeing $903m in outflows on Thursday, their second-largest since launch. Analysts warn sentiment is “incredibly poor,” with potential forced selling and margin risks adding to market fragility amid broader risk aversion. Bitcoin -5.478% to 82428.42, Ethereum -6.654% to 2684.81.

ECB President Christine Lagarde said Europe must move from “resilience to strength” by completing its single market to drive productivity, competitiveness and strategic autonomy. She stressed that fragmented financial, energy and digital systems are hindering growth and called for a genuine capital market union, deeper cross-border investment and simpler regulation. Lagarde said full integration could boost private investment and help finance Europe’s green and digital transitions. She urged coordinated fiscal and industrial policies alongside monetary stability to reinforce Europe’s economic sovereignty and global standing, arguing that only a unified internal market can secure sustainable long-term growth. Euro Stoxx 50 -0.805% to 5525.06, EURUSD +0.087% to 1.1538, BBG AGG Euro Government High Grade EUR -0.2bp to 2.92%.

What We're Watching

U.S. November preliminary PMI manufacturing forecast at 52 from 52.5, with services expected at 55 from 54.8.

U.S. November final University of Michigan consumer sentiment is expected at 50.8.

Central bank speakers: NY Fed President John Williams delivers a keynote speech at the Annual Conference of the Central Bank of Chile; Federal Reserve Vice Chair Philip N. Jefferson speaks on financial stability; Dallas Fed President Lorie Logan speaks in a moderated panel at “The SNB and its Watchers 2025” conference.

What iFlow is Showing Us

Mood: iFlow Mood is in risk-on mood, but in a risk-reduction context with accelerated selling in core sovereign bills relative to the equity market. iFlow Mood is at 0.112.

FX: Light and mixed flows, with CHF standing out as seeing the only significant inflows within the iFlow universe. Elsewhere, KRW, COP and TRY saw moderate inflows while outflows in DKK, JPY, NZD and SEK. JPY scored holdings were reduced further, at 0.97 average weekly scored holdings.

FI: Australia, Chile, Mexico, Hungary and the Philippines posted significant demand, against significant outflows in Danish government bonds and U.K. gilts. Elsewhere, U.S. Treasurys and Eurozone and Colombian government bonds were bought, against selling in Peru, Israel and China.

Equities: New Zealand, South Korea and Brazil posted significant outflows, against demand in the Peruvian equities market. Within EM APAC, the energy and utilities sectors saw the most buying, against selling in the information technology and communication services sectors.

Quotes of the Day

“Excessive optimism sows the seeds of its own reversal.” – Alan Greenspan

“The reversal to mastery is to deny its existence.” – Robert Greene

Economic Details

Eurozone November manufacturing PMI fell to 49.7 from 50.0 in October, marking a return to contraction and the lowest level in five months. The manufacturing output index declined to 50.5, the weakest in eight months, as demand and new orders softened. Meanwhile, the composite PMI eased marginally to 52.4 from 52.5, with growth driven primarily by services, where the activity index rose to an 18-month high of 53.1. Employment was stable overall as modest services hiring offset manufacturing cuts. Input costs rose at the fastest pace in eight months, but selling prices increased only slightly. Business confidence improved, led by manufacturers, while overall sentiment remained robust across the euro area.

Germany’s November HCOB Flash Manufacturing PMI fell to 48.4 from 49.6, its lowest reading in six months, while the Manufacturing Output Index slipped to 50.7 from 52.4, signaling weaker factory activity. Declines in both total and export orders led to renewed backlog contraction and continued job losses, though at a modest pace. The services sector also slowed, with the Business Activity Index down to 52.7 from 54.6, as growth in new business moderated. Overall inflationary pressures eased, with manufacturing prices falling further and services price increases softening. The Composite PMI dropped to 52.1 from 53.9, indicating slower private sector expansion as Germany’s economy approached marginal growth at the end of the year. DAX -0.577% to 23144.58, EURUSD +0.087% to 1.1538, 10y Bund -2.4bp to 2.692%.

France’s November industrial business climate index fell to 98 from 101 in October, slipping below its long-run average of 100. The decline reflected weaker order books, with total and foreign orders both falling to -20 and -15, respectively. Production expectations dropped, though they remain above trend, while output has rebounded modestly over the past few months. The employment outlook softened, with the expected job balance at -1. By sector, sentiment weakened sharply in transport equipment, returning to its long-term mean, while it rallied in agri-food (96) and remained solid in capital goods (104). Finished goods stocks eased slightly but remained above normal, and price expectations fell modestly from October’s levels. CAC 40 -0.268% to 7959.69, EURUSD +0.087% to 1.1538, 10y OAT -2.1bp to 3.468%.

France’s November business climate indicator rose one point to 98, nearing its long-term average of 100, driven by stronger services activity, steady sentiment in construction and wholesale trade and declines in industry and retail. The employment climate index also climbed one point to 96, supported by hiring expectations in services. The services index rebounded to 98, while construction remained flat at 96. Industry slipped three points to 98 due to weaker order books and production prospects, while retail, including motor trade, fell to 97. Wholesale trade held steady at 98. Despite some improvement, both business and employment indicators remained below their long-term averages, suggesting lingering uncertainty across sectors.

France’s November wholesale trade business climate index was unchanged at 98, below its long-run average of 100, where it has remained since early 2023. Order intentions weakened slightly to -16, led by softer demand for household goods and food products, while the general business outlook improved to -32. Sales volumes and foreign sales both declined, with delivery flows from abroad stable but still below average. Employment conditions remained weak, with past and expected staffing balances at -15 and -6, respectively. Stock levels were steady near average, and cash flow positions stable. Selling price balances continued to fall, indicating easing price pressures since mid-2023.

France’s November services business climate index rose three points to 98, moving closer to its long-term average of 100. The rally was mainly driven by improved demand and activity expectations. Optimism increased in business services, information and communication, and administrative support, while property services weakened. Hiring expectations improved but remained below average. Among subsectors, sentiment strengthened sharply in road transport, which reached its long-run mean for the first time since June, and remained near normal in accommodation and catering. Selling price balances eased slightly, while economic uncertainty held stable at its average level.

France’s November business climate for retail and motor vehicles fell two points to 97, remaining below the long-term average of 100 but above September’s 92. Retail trade excluding motor vehicles improved strongly to 102, with higher sales and order expectations, while the motor vehicles sector dropped sharply to 92 amid a weaker sales outlook and falling order intentions. Overall order intentions declined and inventory levels rose. Hiring expectations improved slightly but remained below average. Price expectations increased, while cash flow conditions stayed weak. The mixed results highlight diverging performance between resilient retail stores and a renewed downturn in the motor vehicle trade.

France’s October retail sales volumes rose 0.3% m/m after a slight fall in September, driven by a 0.8% rebound in manufactured goods and a 0.4% decline in food sales. Within manufactured goods, sharp increases were recorded for press and stationery (+11.6%), books (+4.2%) and toys (+4.0%), while sales fell for auto equipment (-4.3%), jewelry (-2.3%) and consumer electronics (-1.6%). Supermarket and hypermarket sales dropped by 2.4% and 0.5%, respectively, but department store sales rose 2.8%. Over the three months to October, total retail volumes decreased by 0.3%, with manufactured goods down 0.1% and food sales down 0.6%, reflecting continued weakness in household consumption.

Netherlands’ October house prices were 6.6% higher y/y, continuing the upward trend that began in mid-2023. Prices also rose 0.5% m/m, reported Statistics Netherlands (CBS) and the Land Registry (Kadaster). On average, prices were 14.5% above their previous peak in July 2022. The total number of housing transactions increased by 20.5% y/y to 21,849, bringing the ten-month total to 193,317, a rise of 17%. The average transaction price for owner-occupied homes was €498,996. Despite the rise, analysts note variations linked to home quality and market mix, suggesting continued but moderate housing market expansion. AEX -1.061% to 925.01, EURUSD +0.087% to 1.1538, 10y NGB -2.2bp to 2.845%.

Dutch investment in tangible fixed assets rose 2.7% y/y in September, driven by higher spending on aircraft, buildings, machinery (including defense equipment) and infrastructure, while investment in road transport vehicles shrank. These figures were not adjusted for calendar effects, with one additional working day compared with September 2024. According to the CBS Investment Radar for November, the investment climate improved slightly, reflecting a larger y/y rise in share prices and less negative consumer confidence. Despite these improvements, CBS noted that more favorable investment conditions do not necessarily translate into higher investment growth.

The U.K.’s November services PMI fell to 50.5 from 52.3 in October, marking a seven-month low as client caution ahead of the budget weighed on new business. The composite PMI slipped to 50.5 from 52.2, indicating near-stagnant private sector growth, while manufacturing output rose to 50.6, supported by the first increase in new orders in over a year. Employment declined at the fastest pace in four months as both sectors cut staff amid weak demand and policy uncertainty. Input costs accelerated due to higher wages and import prices, but output price inflation slowed to a 59-month low, with manufacturers reporting the sharpest price cuts since 2016 and service firms losing pricing power. FTSE 100 -0.407% to 9488.85, GBPUSD +0.008% to 1.3074, 10y gilt -3.4bp to 4.552%.

U.K. public sector net borrowing was £17.4bn in October, £1.8bn (9.6%) lower y/y but £3.0bn (21.4%) above the Office for Budget Responsibility’s March forecast, marking the third-highest October borrowing since 1993. The current budget deficit stood at £12.6bn, and net investment at £4.8bn. For the financial year to October, borrowing totaled £116.8bn, up £9.0bn (8.4%) y/y and equal to 3.9% of GDP. Central government receipts rose 7.3% y/y to £86.4bn, while expenditure increased 4.2% to £92.6bn, with debt interest at £8.4bn. Public sector net debt excluding banks was £2.90tn (94.5% of GDP), and net financial liabilities reached £2.58tn (84.0% of GDP).

U.K. October retail sales volumes fell 1.1% m/m after rising 0.7% in September, the first decline since May, though they were 0.2% higher y/y. Over the three months to October, volumes rose 1.1% versus the prior three-month period and 0.4% y/y. Supermarket and clothing store sales dropped as consumers delayed spending ahead of Black Friday, while non-store (mainly online) sales also dipped. The value of online sales was down 0.8% m/m and 4.8% y/y, though it rose 3.0% on a three-month basis, keeping the online share flat at 28.1%. The total value of retail spending fell 0.9% m/m, highlighting weak consumer momentum despite modest three-month growth in volume terms.

U.K. November GfK consumer confidence declined by 2 points to -19, reflecting widespread pessimism ahead of the upcoming budget. All five confidence measures, including the general economic outlook and spending expectations, fell. Forward-looking confidence in personal finances dropped two points m/m to +1 but remains higher than the -1 recorded in November last year. However, expectations for the general economic situation over the next 12 months worsened significantly, falling six points y/y to -32 (October: -30; November 2024: -26). The major purchase index, indicating willingness to buy big-ticket items, decreased by three points to -15, signaling tighter household spending as the crucial retail season approaches. GfK’s consumer insights director, Neil Bellamy, highlighted that the public is bracing for difficult news, with little optimism in the current climate. The budget is seen as an opportunity to restore clarity and reassurance amid these challenging conditions

Sweden’s industrial capacity utilization stood at 88.8% in the third quarter of 2025, down 0.2 percentage points from the previous quarter in seasonally adjusted terms. On an annual basis, utilization rose from 2024, reaching 88.5% after calendar adjustment. Figures for Q2 2025 were revised upward to 89.0% on a seasonally adjusted basis and a calendar- adjusted 89.6%. The main reason cited for lower utilization was “lack of demand,” which fell to 57.8% of responses, while “other” causes rose to 10.2%. Publication of these statistics will be discontinued after Q4 2025. The data indicate stable but slightly declining utilization levels amid moderate demand weakness. OMX -0.491% to 2688.676, EURSEK +0.191% to 11.0354, 10y Swedish GB -4.9bp to 2.692%

Japan’s national headline inflation rose 0.4% m/m, 3.0% y/y in October from 0.1% m/m, 2.9% y/y. The CPI measure, excluding fresh food, also increased by 0.4% m/m, 3.0% y/y (September: -0.1% m/m, 2.9% y/y), while the core CPI excluding fresh food and energy rose 0.4% m/m, 3.1% y/y (September: 0% m/m, 3.0% y/y). Key contributors to the inflation included food prices, which rose 6.4% y/y (September: 6.7%), driven by staples such as rice and confectionery. Rice inflation remains elevated at 40.2% y/y. Energy prices increased by 2.3% y/y (September: 2.1%), with electricity costs up 3.2% y/y. Transportation and communication costs also contributed, with automobile insurance premiums rising 6.9% y/y. Conversely, education expenses declined significantly (-9.6% y/y), mainly due to lower public high school tuition fees. The slight expansion in overall inflation was supported by increases in durable goods and accommodation services, while energy’s contribution to inflation decreased slightly on government support measures to reduce electricity and gas charges. These data indicate persistent inflationary pressures in the Japanese economy, particularly in the food and energy sectors. Nikkei -2.405% to 48625.88, USDJPY -0.42% to 156.81, 10y JGB -4.6bp to 1.778%.

Japanese trade data for October 2025 show exports at ¥9.766tn, up 3.6% y/y (September: +4.2%), and imports at ¥9.998tn, rising 0.7% y/y (September: +3.0%). The trade balance recorded a deficit of ¥231.8bn, narrowing significantly from a ¥499.9bn deficit a year earlier or a ¥237bn deficit in September. Exports to Asia increased by 4.2% y/y, driven by strong shipments to Hong Kong (+19.2%), Taiwan (+17.7%) and Vietnam (+16.4%). Exports to the U.S. declined by 3.1%, while exports to the EU rose 9.2%. Key export commodities included medical products (+22.6%), electrical machinery (+5.8%) and transport equipment (+1.1%). Notably, semiconductor exports grew 15.8% and motor vehicle exports to the U.S. fell 0.9%. Imports edged up 0.7% y/y, with mineral fuels down 7.3% but foodstuffs up 7.0%. Imports from the U.S. surged 20.9%, led by foodstuffs (+27.9%) and machinery (+13.3%). Imports from China rose 0.8%, while those from the EU declined 9.0%. Mineral fuels accounted for 18.5% of imports, with petroleum products down 0.7%. Overall, Japan’s trade performance in October 2025 reflects resilient export growth amid moderate import increases, with a notable narrowing of the trade deficit compared with the previous year.

Japan’s flash November PMI data signaled a further expansion of Japanese private sector output, with the rate of growth edging up to a three-month high. Composite PMI rose to 52 (October: 51.5) with manufacturing improved to 48.8 but remaining in contraction for the fifth straight month and the services sector unchanged at 53.1. Firms recorded only a slight fall in new orders, softer than that seen in October. Business confidence regarding the one-year outlook for output meanwhile hit a ten-month high, and firms expanded their staffing levels at the fastest pace since June. Cost pressures intensified, however, with input prices increasing at the sharpest pace in six months, while selling prices rose solidly.

Australia’s November composite PMI rose to 52.6 from 52.1 in October, indicating the fastest business activity expansion in three months. Services activity increased to 52.7, while manufacturing output rebounded, with the PMI rising to 51.6 from 49.7 and its output index improving to 52.1 from 49.4. New orders grew more rapidly, led by renewed goods demand and stronger services activity, though export growth remained marginal. Employment rose but at the slowest pace in ten months amid hiring challenges in services. Input and output prices increased moderately, with inflation still muted by historical standards. Business confidence strengthened to a five-month high, reflecting optimism about future output growth. ASX -0.412% to 5107.08, AUDUSD +0.078% to 0.6445, 10y ACGB -0.5bp to 4.462%

New Zealand recorded a goods trade deficit of $1.5bn in October 2025, as exports rose 16% y/y to $6.5bn and imports increased by 11% y/y to $8.0bn. Exports were led by dairy products, with milk powder, butter and cheese up $316mn (18% y/y) to $2.1bn. Other key gains came from meat and edible offal (30% y/y), fruit (45% y/y) and wine (33% y/y). By market, there were rises in exports to China (18% y/y; $241mn), Australia (14% y/y; $110mn), the EU (40% y/y; $124mn), the U.S. (5% y/y; $37mn) and Japan (7.5% y/y; $21mn). Imports climbed $767mn (11%) to $8.0bn, driven by petroleum and products (30% y/y), fertilizers (370% y/y), mechanical machinery (19% y/y) and electrical machinery (26% y/y). In contrast, imports of aircraft and parts (-84% y/y) and inorganic chemicals (-40% y/y) decreased sharply. Imports from China surged 29% y/y, while those from the U.S. and South Korea fell by 15% and 19%, respectively. NZX 50 -0.149% to 13419.4, NZDUSD +0.287% to 0.56, 10y NZGB +2.7bp to 4.163%

South Korea’s October Producer Price Index rose by 0.2% m/m, 1.5% y/y from 0.4% m/m, 1.2% y/y in September. Among major sub-indices, agricultural, forestry and marine products declined sharply (-4.2% m/m), reversing previous positive growth (0.5% in September), though they were still up 4.0% y/y. Within this category, agricultural foods fell -5.5% m/m and livestock products dropped -5.4% m/m, while marine foods rose 5.2% m/m. Manufacturing product prices increased by 0.5% m/m and 1.0% y/y, with notable gains in computers, electronic and optical equipment (+3.9% m/m) and basic metal products (+1.3% m/m). Coal and petroleum products decreased by 2.1% m/m, contributing to a 3.8% y/y decline. Services rose 0.5% m/m and 2.0% y/y, supported by financial and insurance activities (+2.9% m/m) and accommodation & food services (+0.5% m/m). Electric power, gas, water and waste fell 0.6% m/m but increased by 1.5% y/y. These preliminary figures suggest mixed sectoral trends with overall moderate inflationary pressures at the producer level in October 2025. South Korea’s exports in the first 20 days of November rose 8.2% y/y while imports rose 3.7% y/y, leaving a trade surplus of $2.405bn. Outbound shipments reached $38.5bn in the period from November 1 to 20, compared with $35.6bn tallied a year earlier. Imports increased to $36.1bn over the same period. Chip exports rose 26.5% y/y, and exports to China and the U.S. were up 10.2% y/y and 5.7% y/y, respectively. KOSPI -3.785% to 3853.26, USDKRW +0.174% to 1474.7, 10y KTB +5bp to 3.332%

Singapore’s final Q3 GD came in better than expected at 2.4% q/q, 4.2% y/y vs. flash 1.3% q/q, 2.9% y/y and Q2 1.4% q/q, 4.4% y/y. Key drivers included manufacturing (+5.0% y/y), wholesale trade (+3.9% y/y) and finance and insurance (+4.6% y/y). The electronics cluster grew 6.1% y/y, boosted by AI-related semiconductor demand, while biomedical manufacturing rose 8.9% due to higher pharmaceutical ingredient output. Domestic exports to Taiwan, South Korea and Vietnam increased by 26.8%, 13.9% and 4.7% y/y, respectively. The wholesale trade sector benefited from strong global demand for AI-related electronics. The construction sector grew 3.6% y/y but contracted by 0.7% q/q. Retail trade improved to 2.5% y/y growth. The Ministry of Trade and Industry (MTI) has upgraded the GDP growth forecast for 2025 to around 4.0% y/y, up from 1.5-2.5%, and projects that 2026 GDP will come in at 1.0-3.0%. The slower expected pace of growth is linked to renewed U.S. tariffs and moderating external demand. Risks include geopolitical tensions and financial market volatility. Services sectors such as information and communications, and finance and insurance are expected to maintain steady growth, while consumer-facing sectors may remain subdued. STI -0.957% to 4468.68, USDSGD -0.039% to 1.3074, 10y SGB +2.4bp to 1.878%

India’s November composite PMI eased to 59.9 from 60.4 in October, indicating slower but robust private sector growth. Manufacturing PMI declined to 57.4 from 59.2, marking the weakest improvement in nine months, while services activity rose to 59.5. New orders and output expanded at the slowest pace since May, partly due to weaker factory demand and heavy rainfall disruptions. Export order growth held steady, but competition dampened gains. Employment rose for a 42nd month in a row, but at the slowest rate in 18 months. Input cost inflation was the weakest in over five years, while output charge inflation hit an eight-month low. Business confidence softened to its lowest level since July 2022 amid easing cost pressures. SENSEX -0.284% to 85389.77, USDINR +0.839% to 89.4512, 10y INGB +1.1bp to 6.499%

Malaysia’s October inflation eased to 1.3% y/y, with the consumer price index at 135.1 versus 133.4 a year earlier, driven by softer rises in food and beverages (1.5%) and housing, water, electricity, gas and other fuels (1.1%). Declines were recorded in information and communication (-2.4%), clothing and footwear (-0.3%) and transport (-0.2%). The strongest gains came from personal care, social protection and miscellaneous goods and services (6.0%) and restaurant and accommodation services (3.4%). Monthly inflation fell 0.1% m/m as transport and housing costs dropped. Johor led state increases at 1.9%, while Kelantan posted the lowest rate at 0.1%. Malaysian inflation remained below levels in Vietnam, Indonesia and South Korea but above China and Thailand. KLCI -0.148% to 1617.57, USDMYR -0.289% to 4.1458, 10y MGB -0.7bp to 3.426%

The Malaysian labor market remained robust in Q3 2025, with the labor force rising 2.9% y/y to 17.49 million and participation edging up 0.3 percentage points to 70.9%. Employment grew 3.1% to 16.97 million, while the unemployment rate fell to 3.0%. Underemployment improved, with those working fewer than 30 hours declining 12.6% to 230.9k and the time-related rate down to 0.8%. Labor demand rose 1.7% to 9.16 million jobs, with vacancies up 2.2% to 197.1k. Productivity increased 3.8% to MYR 45.10 per hour, supported by economic growth of a 5.2% and higher total hours worked. Continued domestic strength and policy support are expected to sustain momentum in Q4 2025.