Risk-Off Trade Dominates Asia on US Tech Rout and China–Russia Energy Link

GLOBAL MOOD: Risk-off
Drivers: Russian LNG Discounts, China Sanctions Defiance, Mixed US Data

Asian markets opened risk-off as tech-led US losses, China’s discounted purchases of sanctioned Russian LNG, and uncertainty over US data and AI regulation weighed on sentiment, prompting caution ahead of the FOMC minutes, and US trade data.

TODAY’S WATCHLIST

• FOMC Meeting Minutes
  
• US Balance of Trade
  
• Euro Oct CPI Data
  
  

THE BIG STORY
Russian LNG producer Novatek has sharply discounted cargoes from its Arctic LNG 2 project by 30–40% since August to entice Chinese buyers to purchase gas under some of the toughest sanctions imposed by the US and Europe. The cut-price sales have effectively pulled the $21-billion project out of commercial limbo, even as Washington moves to choke off Russia’s energy revenue to pressure the Kremlin over the war in Ukraine.

Despite US warnings that countries continuing to buy Russian energy could face consequences, China, a long-standing ally of President Vladimir Putin has continued purchases and rejected Western sanctions.

Meanwhile, President Donald Trump on Tuesday called for a single federal standard to regulate artificial intelligence, warning that a “patchwork” of 50 different state rules would stifle innovation and jeopardise the US position in the global AI race. Trump argued that over-regulation risks ceding ground to China and reiterated his priority of making the US “the world capital in artificial intelligence,” following his administration’s earlier directive to create a national AI Action Plan. 

Data Spotlight
US labour-market data pointed to renewed weakness as continuing jobless claims surged between mid-September and mid-October, rising by 10,000 to 1.957 million, the highest since August. The jump from September’s survey week to October’s suggests the unemployment rate for October may come in elevated, consistent with cooling hiring conditions. ADP data also showed private employers shed an average of 2,500 jobs per week in the four weeks to 1 November. The BLS will release the delayed September jobs report on Thursday, with August’s unemployment rate already near a four-year high at 4.3%.

Despite the deterioration in continuing claims, initial claims remained unchanged throughout the survey period, offering a modest sign that labour-market conditions are not worsening uniformly.

Separately, US factory orders rebounded, rising 1.4% in August after a 1.3% dip in July, with annual growth at 3.3%, though business equipment spending was softer than initially estimated. In energy markets, US crude inventories rose by 4.4 million barrels in the week ending 18 November the third consecutive weekly build  adding to signs of softer demand for the year-end.

Takeaway:
Rising continuing claims point to a softer jobs backdrop heading into October, even as factory activity stabilises and crude inventories continue to climb.

WHAT HAPPENED OVERNIGHT

• US tech stocks extend slide on valuation concerns
  • US equities fell Tuesday: S&P 500 −0.8%, Dow −1%, Nasdaq −1.1%, marking a four-day losing streak.
  • Mega-cap tech sold off ahead of Nvidia’s earnings, HOME DEPOT dropped 6% after cutting its full-year profit outlook
  • Investors positioned cautiously ahead of delayed macro data as labour trends showed mixed signals.  

• US Treasury yields fall amid broader risk-off sentiment
  • The 10-year yield slipped to 4.1%, the lowest in a week.
  • Caution grew before delayed economic releases, with fears that firm data and recent Fed scepticism could limit further rate cuts.
  • Initial jobless claims came in at 232,000, while continuing claims rose to 1.957 million — highest since August.
  • ADP data showed firms cut an average of 2,500 jobs weekly through early November, pointing to cooling labour momentum.  

• US Dollar holds steady ahead of key data releases
  • The dollar firmed against the yen, touching a new 9.5-month high amid concerns over Japan’s fiscal stance.
  • The dollar index hovered near 99.5–99.6, up 0.05%, as traders awaited critical US economic updates.
  • The euro dipped 0.09% to $1.1579; the dollar rose 0.18% to 155.52 against the yen. 

• Crude oil rises after volatile session tied to sanctions uncertainty
  • Brent crude ended 1.07% higher at $64.89, while WTI gained 1.39% to $60.74.
  • Prices whipsawed on uncertainty over Western sanctions and their effects on Russian supply.
  • Sentiment was also shaped by President Donald Trump confirming interviews for the next Fed Chair.

 Day’s Ledger

Economic Data

• Euro Oct CPI Data
• Euro Sep Current Account 
• US Balance of Trade
• FOMC Meeting Minutes
  
• US Oct Industrial Production Data 

Corporate Actions

• Jul-Sep Earnings: Orient Tradlelink, Resourceful Automobile 

Policy Events

• German Buba Vice President Buch Speaks
• ECB Non-Monetary Policy Meeting 
• ECB Buch Speech 

TICKERS TO WATCH

• NBCC sells rights for 609 Amrapali units to AU Real Estate for ₹10.69 billion
• MAX HEALTHCARE gears up for expansion-led growth and stronger margins ahead
  
• S&P raises Airtel ratings on earnings momentum; says outlook positive
• DREAMFOLKS eyes diversification beyond airport lounge services in India
• TCS bags 5-year NHS Supply Chain deal to deploy cloud, AI solutions
• TATA STEEL marks 10 years of Kalinganagar, sets sights on 16 mtpa capacity
• ULTRATECH kept at ‘BBB-’ by Fitch with a stable outlook for credit strength
• GLENMARK gets EU nod to market Winlevi, paving way for its European launch.
  
  

MUST READ

• Google CEO Sundar Pichai urges caution on AI use, flags 'bubble' concerns
• Trai mandates pre-tagging of SMS elements to further curb spam, fraud
• India likely to enter Bloomberg Global Index as FPIs give positive feedback
• India in talks with 7-8 countries to extend UPI services: DFS secy Nagaraju
• India imposes anti-dumping duty on Vietnam steel imports for 5 years
• CCI moves NCLAT seeking clarity on WhatsApp, Meta's data sharing order
• Salary hikes in 2026 may remain low, survey shows
• Fed’s Jefferson Says Weaker Labor Market Shifts Balance of Risks
• Euro Zone Set for Moderate Growth After Resilience in 2025

See you tomorrow with another edition of The Morning Edge.

Have a great trading day

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Ata Hasnain writes, Is Ankara’s posture toward India driven more by ideological projection or geopolitical calculation—or both?