Monday Morning Coffee - Markets Update - 3 Nov 2025 - Asian Markets Climb on Trade Truce, AI Momentum; Dollar Hits 3-Month High

The Trade Academy Team
Nov 3
3 min read

Markets Update: Asian equities advanced Monday, buoyed by optimism over a year-long U.S.-China trade truce and sustained enthusiasm around artificial intelligence investments, even as a stronger dollar reflected investor recalibration of U.S. rate cut expectations.

Global Markets Roundup: 3 Nov 2025

Asia Stocks Near Multi-Year Highs Despite Muted Trade

The MSCI Asia-Pacific index outside Japan rose 0.63% to 729.82, edging closer to a 4½-year high reached last week. The benchmark has gained more than 27% year-to-date, pacing for its best annual performance since 2017.

Markets in Japan were closed for a public holiday, keeping overall volumes in the region subdued. Still, South Korea’s Kospi surged over 2% to a new record, while China’s blue-chip CSI 300 added 0.1% and Hong Kong’s Hang Seng Index climbed 1%.

While last week’s agreement between Washington and Beijing to freeze tariffs for a year lifted sentiment, analysts at BofA advised caution: “We advise investors to lock in some gains on the rises and accumulate on the corrections, and rotate into more defensive positioning toward year end,” they wrote, warning that much of the optimism has already been priced in.

Economic data released across Asia pointed to continued factory weakness, as major manufacturing hubs remained sluggish in October amid ongoing U.S. tariffs and softer demand.

Nasdaq futures (NQ1!) rose 0.25%, and European futures (FESX1!) pointed to a higher open ahead of fresh manufacturing data.

Dollar Strengthens After Fed Pushback on Rate Cuts

The U.S. dollar climbed to a three-month high after a series of hawkish signals from Federal Reserve officials tempered expectations for a December rate cut.

Several Fed presidents expressed discomfort with further easing, while Governor Christopher Waller acknowledged the case for support amid a weakening labor market. Following the Fed’s expected 25-basis-point cut last week, Chair Jerome Powell said another cut in December was “not a foregone conclusion.”

Market pricing for a December cut dropped to 68%, down from near-certainty before the policy meeting.

The dollar index DXY rose, as the euro EURUSD slid to $1.1524—its lowest in three months. The British pound (GBPUSD) edged down 0.2% to $1.3142, while the yen USDJPY hovered near a 9-month low at 154.05 per dollar.

Government Shutdown Drags On, Data Delays Loom

With the U.S. government shutdown stretching into its second month, key labor data including job openings and non-farm payrolls will not be released this week. Investors will instead focus on private employment figures from ADP for clues about labor market strength.

The shutdown, which began October 1, is now the second-longest in U.S. history, trailing only the 35-day closure of 2018–2019.

Earnings Spotlight Turns to Tech After Mixed AI Results

Investors will closely watch upcoming earnings from tech firms, following a mixed round of reports from mega-cap names that revealed growing scrutiny over returns on heavy AI-related capital spending.

Semiconductor players Advanced Micro Devices (AMD) and Qualcomm (QCOM), along with data analytics firm Palantir Technologies (PLTR), are scheduled to report this week. McDonald’s (MCD) and Uber (UBER) are also on deck.

While AI enthusiasm continues to support global equity markets, analysts caution that investors are increasingly looking for concrete returns to justify the valuations.

Gold Rebounds; Crude Gains After OPEC+ Holds Output Steady

In commodities, gold climbed back above $4,000 as traders bought into last week’s dip.

Oil prices advanced modestly after OPEC+ opted to maintain current production levels through the first quarter of 2026:

Brent Crude (BRN1!): +0.32% to $64.98/barrel
WTI Crude (CL1!): +0.28% to $61.16/barrel

Outlook

Markets will remain focused on macro signals and earnings performance this week as the global economy continues to balance between rate uncertainty, trade dynamics, and AI-fueled equity enthusiasm.

Though investor sentiment remains upbeat, analysts warn that the sustainability of current valuations hinges on both geopolitical stability and earnings delivery, particularly from the tech sector.

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team