Key evening developments: the central bank lifted the FX deposit reserve ratio to 6%, effective November 15, while Governor Pan Gongsheng vowed to safeguard smooth operation of stock, bond and foreign exchange markets, and the PBOC conducted a 100 billion yuan swap facility operation.
1. Central bank raises FX deposit reserve ratio to 6%, effective November 15
Importance: ★★★★★ On November 3, the People's Bank of China issued an announcement stating that, in order to strengthen foreign exchange liquidity management at financial institutions, it would raise the FX deposit reserve ratio for financial institutions by 2 percentage points, from the current 4% to 6%, effective November 15, 2026. According to Wen Bin, chief economist at China Minsheng Bank, the renminbi has been persistently strengthening recently, and raising the FX deposit reserve ratio will tighten domestic US dollar liquidity and ease upward pressure on the renminbi; in 2021 the central bank raised this tool twice to 9%, and between 2022 and 2023 it cut it three times to the current 4%. Lian Ping, chairman of the China Chief Economist Forum and dean of the International Institute of Finance, said the increase is a macro-prudential adjustment by the central bank against one-sided exchange rate movements and FX liquidity, made against the backdrop of a relatively strong renminbi and ample foreign exchange supply, with the aim of avoiding expectations of rapid one-sided appreciation and enhancing two-way flexibility in the market.
2. Pan Gongsheng: Safeguard smooth operation of stock, bond and FX markets
Importance: ★★★★ According to Xinhua, the 25th session of the Standing Committee of the 14th National People's Congress held its second plenary meeting on the morning of November 3 at the Great Hall of the People in Beijing, where PBOC Governor Pan Gongsheng, entrusted by the State Council, delivered a report on financial work. The report set out considerations for next steps: continue implementing a moderately loose monetary policy; further strengthen and improve financial regulation; enhance the adaptability of financial services to the real economy and accelerate building a multi-tiered modern financial market system; steadily deepen financial reform and high-quality opening-up; implement monetary policy tools that support the capital market, consolidate and improve the market stabilization mechanism, safeguard the smooth operation of stock, bond and foreign exchange markets, and hold the bottom line of preventing systemic financial risks.
3. PBOC conducts 100 billion yuan swap facility operation, winning bid rate 10bp
Importance: ★★★★ On November 3, the People's Bank of China conducted a Securities, Funds and Insurance companies Swap Facility (SFISF) operation. The operation amounted to 100 billion yuan and used a rate-based bidding method, with 31 securities and fund companies participating in the bidding and a winning bid rate of 10bp. The central bank also published the announcement of the SFISF operation result [2026] No. 1 the same day. According to The Paper, CITIC Securities said it had declared a third batch of swap facility operations and participated in the bidding; Guolian Minsheng Securities said it won a bid again; GF Securities said it has won bids for three consecutive batches since first participating in the initial phase in October 2024.
4. Iran comments on negotiations, international crude oil futures plunge during trading
Importance: ★★★ On the evening of November 3, international crude oil futures plunged during trading. At 20:27, Brent crude futures fell below US$105 per barrel to US$104.99 per barrel; at 21:33 the decline widened to 2%, to US$102.19 per barrel, with WTI crude futures at US$94.46 per barrel at the same time. As of 22:30, WTI crude futures stood at US$96.22 per barrel and Brent crude futures at US$104.36 per barrel. On the news front, according to CCTV News, an official familiar with the negotiations said Qatari mediators expect to receive feedback from the United States and Iran within the next 36 hours on a new proposal. According to a report cited by Wallstreetcn, Iran's president said the Supreme Leader has granted "additional authorization" allowing dialogue on issues previously regarded as "non-negotiable."
5. World Gold Council: Q3 global central bank net gold purchases 321 tons, gold ETF holdings hit record high
Importance: ★★★ The World Gold Council released its Q3 2026 Gold Demand Trends report on November 3. The report showed that in the third quarter global central banks bought a net 321 tons of gold, the fastest pace of purchases since the end of 2024; cumulative purchases so far this year reached 675 tons, slightly above the level of the same period last year. In the same period, global physical gold ETFs saw net inflows of 211 tons, reversing the outflow trend of the second quarter, with total holdings rising to 4,256 tons, a record high; over-the-counter trading and other gold demand reached 143 tons, higher than 101 tons a year earlier.
6. US midterm elections begin voting
Importance: ★★★ According to Xinhua, the United States began voting in its midterm elections on November 3. At 6 a.m. US Eastern Time (19:00 Beijing Time), polling stations opened first in some eastern states including Maine, New York and Virginia. In this election, Republicans and Democrats will contest all 435 seats in the House of Representatives and 35 of the Senate's 100 seats, and voters will also elect governors in 36 states as well as some state legislators and other local public officials. A China Merchants Securities research note pointed out that, based on the latest polling from eight institutions, the probability of Republicans losing both the Senate and the House is the highest, the probability of retaining the Senate but losing the House is moderately low, and the probability of holding both chambers is the lowest.
Opportunity outlook
A review of sectors with high attention and their catalysts during the day. 1. Electronic fabric: according to the November quotation from Zhuochuang Information, mainstream 7628 thick fabric was quoted at 14.6 yuan/meter to 14.65 yuan/meter, up 1.5 yuan/meter month-on-month; 2116 thin fabric was quoted at 20.2 yuan/meter, up 2.5 yuan/meter month-on-month. 2. Storage: Xiechuang Data said in its investor relations activity record that DDR is extremely short in supply, and recent quotes have been raised by 30% and accepted. 3. Long-duration energy storage: CATL delivered the first 5.64MWh EnerQB long-duration energy storage system to Quinbrook for Australia's 3GW/24GWh series of projects. 4. Nuclear power: Unit 2 of CGN's Zhejiang San'ao nuclear power project completed its first nuclear fuel loading, with 177 nuclear fuel assemblies loaded. 5. Methanol: Geely released a new-generation methanol hybrid technology, with the first model, the Galaxy Starshine 6 E-fuel, launched, and methanol cost per 100 kilometers as low as 20 yuan. Among these, signs of tight storage supply have persisted recently. According to Xiechuang Data's investor relations activity record, because HBM occupies a large amount of capacity, the upward price trend for DDR will remain unchanged for at least the next three years; Flash is relatively weak and easier to expand capacity for, and consumer Flash has already seen price cuts; HDD prices remain firm due to rigid demand for cold and warm data storage. A Guoyuan Securities research note said technology earnings have triggered a revaluation of market expectations, and it recommends paying attention to AI profit realization and internal divergence within the storage sector.
Selected announcements
Positive announcements: 1. China XD Electric: 12 subordinate subsidiaries became among the winning bidders for State Grid's fifth 2026 substation equipment (including cables) procurement, with a combined winning bid of about 1.115 billion yuan. 2. Pinggao Electric: the company, its subsidiaries and joint ventures won State Grid's fifth 2026 substation equipment procurement, totaling about 998 million yuan. 3. Wuliangye: repurchased 8.4097 million shares in October, paying about 600 million yuan. 4. Joyson Electronics: plans to repurchase 150 million yuan to 300 million yuan of shares, all of which will be cancelled to reduce registered capital. 5. Huate Dayin: the controlling shareholder plans to increase its stake by no less than 3.52 million shares and no more than 7.0386 million shares within six months from November 4.
Negative announcements: 1. Guosheng Technology: the main subsidiary of its photovoltaic business has been temporarily suspended since September 8, and if production is not resumed before December 7, the stock faces the risk of being subject to other risk warnings. 2. *ST Wintech: Nexperia B.V. has sued the company and its actual controller in the Amsterdam District Court in the Netherlands, claiming US$2 billion in damages. 3. Lion Micro: persons acting in concert with the controlling shareholder reduced a combined 7.7 million shares from August 3 to November 2, cutting their combined stake from 22.58% to 21.58%. 4. Qianli Technology: October vehicle sales were 6,282 units, down 25.81% year-on-year. 5. Wintime Holdings: revenue for the first three quarters was 180 million yuan, down 29.51% year-on-year; net loss was 37.5458 million yuan.
Tomorrow's focus
Watch tomorrow (November 4): representatives of the European Union, the United States and Ukraine meet in Brussels, and US midterm election results are released successively.
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