By Wayne Cole

SYDNEY(Reuters) -U.s. stock futures and the dollar climbed in Asia on Wednesday as early results from the U.S. presidential election suggested the race remained too close to call, leaving investors jumping at shadows.

Republican Donald Trump won eight states while Democrat Kamala Harris captured three and Washington, D.C., Edison Research projected, but critical battleground states were unlikely to be called for hours or even days.

Treasury yields climbed as some betting sites swung to favour Trump, while futures markets were still confident the Federal Reserve will cut interest rates by 25 basis points on Thursday.

Analysts generally assume Trump's plans for restricted immigration, tax cuts and sweeping tariffs if enacted would put more upward pressure on inflation and bond yields, than Harris' centre-left policies.

Trump's proposals would also tend to push up the dollar while potentially restricting how far the Fed might ultimately be able to cut rates. Reflecting that, Fed fund futures for next year eased into the red with November off 7 ticks.

"As the early results come in, even though none of them are that surprising, we are seeing Treasury yields rising a little bit, the dollar strengthening, bitcoin up; kind of a classic Trump trade," said Brian Jacobsen, chief economist at Annex Wealth Management.

"There's not a lot of conviction in these moves; it seems like these are little pops."

Yields on 10-year Treasury notes rose to 4.351%, from 4.279%, and nearer a four-month high of 4.388% touched last week. Two-year yields climbed to 4.241%, from 4.189% late in New York.

"If we look at the long end of the curve, that reflects the fact that both candidates are not exactly fiscal conservatives, they're both willing to use the fiscal printing press," said Arnim Holzer, global macro strategist at Easterly EAB Risk Solutions.

"The biggest issue is if Trump or Harris are going to get full mandates," he added. "If they don't get blue or red sweeps, it limits the fiscal damage, and that's the best outcome for bondholders."

YUAN GIVES GROUND

S&P 500 futures gained 0.6% in choppy trading, while Nasdaq futures added 0.3%. EUROSTOXX 50 futures firmed 0.2%, while DAX futures tacked on 0.4% and FTSE futures 0.3%.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed. Japan's Nikkei rose 1.2% as the yen slipped, tracking rallies on Wall Street overnight. [.N[]

In currency markets, the dollar index added 0.8% to 104.19. The euro slipped 0.8% to $1.0834, having hit a one-month top of $1.0937 overnight.

The dollar firmed 0.8% to 152.86 yen, and further away from a low of 151.34. [USD/]

The dollar gained 0.5% on the offshore yuan to 7.1375 yuan. China is seen on the front line of tariff risk, and its currency in particular is trading on tenterhooks with implied volatility against the dollar around record highs.

Chinese stock markets have surged to almost one-month highs as investors expect a meeting of top policymakers in Beijing this week to approve local government debt refinancing and spending. Chinese blue chips dipped 0.2% in early trade on Wednesday.

A firmer dollar combined with higher bond yields left gold prices little changed at $2,744 an ounce and off a recent record peak of 2,790.15. [GOL/]

Oil prices were down in early Asia trade as markets nervously waited on the U.S. election results. They had risen overnight as a storm was expected to cut U.S. output in the Gulf of Mexico. [O/R]

U.S. crude lost 23 cents to $71.66 per barrel, while Brent fell 39 cents to $75.14.

By Joe Cash and Laurie Chen

BEIJING (Reuters) - Fears of a widening tariff war between China and other major exporting nations are keeping diplomacy between the world's second-largest economy and the European Union alive, even as trade talks over electric vehicles stall.

While the U.S. election on Tuesday is almost certain to result in more American curbs on Chinese goods, European negotiators are investing in a longer game that may yield no immediate resolution but would at least stop an escalating trade conflict.

Some EU member states are even using the dispute to bolster bilateral ties away from the Brussels-Beijing negotiations and attract fresh investment from China.

"I don't think China wants this thing to significantly torpedo the EU-China relationship, especially given the fact we will probably be seeing a very different world (after the U.S. election)," said Bo Zhengyuan, a Shanghai-based partner at Plenum, a consultancy.

New EU tariffs of up to 45.3% on Chinese EV imports came into effect last week after a year-long investigation that divided the bloc and prompted retaliation from Beijing.

Brussels maintains that Beijing doles out unfair subsidies to its auto industry and refuses to accept China's counter-offer of minimum import prices. Beijing hit back with probes into Europe's pork and dairy industries and imposed curbs on brandy imports.

Beyond the headlines, however, is a more complicated series of negotiations.

Beijing has in recent months hosted a procession of official visits from the EU and its member states.

A French junior trade minister is visiting Shanghai this week, with Paris keen to continue developing commercial ties in China's financial capital.

France is also a "Country of Honour" at China's annual flagship import expo, despite Beijing having placed retaliatory import tariffs on its brandy.

While little progress has been made in even approaching a resolution, engagement remains a priority, analysts say.

"I am not terribly optimistic that the Chinese side will put anything on the table that the EU will accept, but I probably should also be curbing my pessimism a bit, and would not discount a solution," said Max Zenglein, chief economist at Merics, a Berlin-based China studies institute.

"I am sure certain member states will be pushing for this to demonstrate their willingness or ability to work out a deal."

A DIVIDED UNION

As Washington steps up its curbs on Chinese products, Beijing is wary of broader damage to its trade ties with the EU, worth $783 billion last year.

For its part, the EU is conscious of widening the division the tariffs have already created among its members.

Among the bloc's 27 member states, 10 voted for the tariffs, five voted against and 12 abstained. Germany, Europe's biggest economy, was among the dissenters.

"The definitive lack of a majority against the tariffs meant that some countries' 'no' votes were symbolic," one European diplomat said.

"Some EU countries want more in-country investment from China and hoped for less retaliation by not voting for the tariffs outright," they added.

Slovakian Prime Minister Robert Fico is the latest European leader to visit Beijing, seeking deeper two-way trade and investment ties as insurance against a wider fallout with China.

Finland, which abstained, last week also agreed to deepen commercial ties with China during a visit by President Alexander Stubb, following Spain's and Italy's lead.

CONSTRUCTIVE MUDDLE-THROUGH

China has incentives to contain the dispute: Its economy is slowing and it needs to find buyers for its EVs to ward off deflationary pressures.

European diplomats, veterans in complex multilateral negotiations that can take years to iron out, said it was clear Beijing wanted to avoid a trade war, but it only started talks with Brussels relatively late in the process.

While both China and the EU have launched challenges against each other at the World Trade Organization, that arbitration could take years.

"Chinese action on brandy, pork and dairy imports from the EU is probably baked in at this point," said Noah Barkin, senior advisor at Rhodium Group.

"A win for the EU would be Beijing limiting its response to brandy, pork and dairy, and then both sides hashing it out at the WTO," he added.

Barkin warned a less contained response could see China curb EU access to the critical raw materials it needs for a green energy transition.

During his visit to China in September, Spanish Prime Minister Pedro Sanchez said Spain would seek to resolve the EV dispute within the WTO.

While that would signal a failure of bilateral talks, it would head off a worsening in relations.

"I think there is a chance they will come to some agreement, regarding the minimum prices, but this will not lead to the removal of the tariffs, just a readjustment of the rates," said Plenum's Bo on EU talks. "That is probably the best outcome."

SEOUL (Reuters) - South Korea has ordered Facebook owner Meta Platforms (NASDAQ:META) to pay 21.62 billion won ($15.67 million) in fines after finding it had collected sensitive user data and given it to advertisers without a legal basis, Seoul's data protection agency said.

The U.S. tech giant obtained information from about 980,000 South Korean Facebook users on issues such as their religion, political views and sexuality while failing to seek agreement from users, the Personal Information Protection Commission said in a statement on Tuesday.

The information was then used by some 4,000 advertisers, the agency said.

A Meta Korea official declined to comment.

"Specifically, it has been found that (Meta) analysed user behaviour data such as pages they liked and advertisements they clicked on Facebook and created and managed advertising themes related to sensitive information," the commission said.

This included users being categorised for example as being North Korean defectors, following a certain religion, or identifying as a transgender or gay person, the agency said.

Meta had also unfairly declined a request by users to access personal information and failed to prevent data on about 10 South Koreans from being leaked by hackers, the agency said.

($1 = 1,379.5200 won)

By Nandita Bose and Steve Holland

PHILADELPHIA/GRAND RAPIDS, Michigan (Reuters) - Donald Trump and Kamala Harris both predicted victory as they campaigned across Pennsylvania and other battleground states on Monday in the final, frantic day of an exceptionally close U.S. presidential election.

The campaign has seen head-spinning twists: two assassination attempts and a felony conviction for Republican former President Trump, and Democratic Vice President Harris' surprise elevation to the top of the ticket after President Joe Biden, 81, dropped his reelection bid under pressure from his own party. More than $2.6 billion has been spent to sway voters' minds since March, according to AdImpact, an analytics firm.

Nevertheless, opinion polls show Trump, 78, and Harris, 60, virtually even. The winner may not be known for days after Tuesday's vote, though Trump has already signaled that he will attempt to fight any defeat, as he did in 2020.

Both candidates converged on Pennsylvania on Monday to urge supporters who have not yet cast their ballots to show up on Election Day. The state offers the largest share of votes in the Electoral College of any of the seven battleground states expected to determine the outcome.

Trump campaigned in North Carolina, Pennsylvania and Michigan on the final full day of the campaign and was due to return to his home in Palm Beach, Florida, to vote and await election results.

Harris scheduled five campaign stops in Pennsylvania, including two cities where Trump also visited, Reading and Pittsburgh.

She ended the day in Philadelphia with a star-studded event at the "Rocky steps" of the Philadelphia Museum of Art, the site of a famous scene from the movie "Rocky."

By Tom Westbrook

SINGAPORE (Reuters) - Stock markets moved sideways and an uneasy calm settled over currencies and bonds as investors waited for the United States to choose a new leader with polls showing the contest on a knife edge.

Oil held sharp overnight gains on delays to producers' plans for increased output, leaving benchmark Brent crude futures at $75.08 a barrel after a 3% rise on Monday.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat. Tokyo's Nikkei returned from a holiday and rose 1.3% in morning trade.

S&P 500 futures ticked 0.1% higher.

The dollar, which had eased overnight as traders made final adjustments to positions, bought 152.35 yen and traded at $1.0875 per euro.

"They've priced what they think is price-able and that's that," said Westpac strategist Imre Speizer, adding that a clear win for Republican Donald Trump would lift the dollar, while a win for Democrat Kamala Harris would push it a little lower.

Election day ends an acrimonious campaign jolted by assassination attempts on Trump and the withdrawal of President Joe Biden in favour of Harris, with polls showing the candidates virtually tied.

Markets are on edge about how Trump's protectionist trade policies in particular could stoke inflation and hit exports in the world's biggest consumer market with bonds and the dollar expected to move on the outcome of the election.

"Ultimately the U.S. election comes down to this - whether the U.S. electorate wants to vote for economic policy continuity, institutional stability and liberal democracy (Harris) or radical trade policy, a further retreat for globalization and strongman democracy (Trump)," J.P. Morgan analysts said in a note. "In short, a vote for stability or change."

BRACED

China is seen on the front line of tariff risk and the currency in particular is trading on tenterhooks with implied volatility against the dollar at record highs.

The yuan hovered at 7.1065 per dollar, while broader foreign exchange markets were steady. Traders kept one eye on a Reserve Bank of Australia rate decision, due at 0330 GMT, though no policy change is expected and most are keeping to the sidelines in order to trade quickly on election results.

The Australian dollar held at $0.6590. [AUD/]

"Simply, if Harris wins, we like selling dollar/yen and buying AUDUSD," said currency strategists at Citi. "If Trump wins, we like buying USD against EUR, SEK, and NOK."

Treasury markets, which have also priced in a U.S. interest rate cut for Thursday, held their ground in Asia with 10-year U.S. yields at 4.30%.

Bitcoin, which is seen as a beneficiary of a softer regulatory environment should Trump win office, has sold from recent highs and was steady at $67,924 on Tuesday.

When results roll in after midnight GMT the focus will be on battleground states of Georgia, North Carolina, Pennsylvania, Michigan, Arizona, Wisconsin and Nevada.

A winner may not be known for days and Trump has signalled that he will attempt to fight any defeat, as he did in 2020.

SEOUL (Reuters) - South Korea's October headline inflation slowed further to the weakest level in almost four years, data showed on Tuesday, strengthening the case for more interest rate cuts and fueling worries of an undershoot of the Bank of Korea's 2% target.

The consumer price index rose 1.3% in October from a year earlier, after an increase of 1.6% in September, Statistics Korea data showed, marking the slowest annual increase since January 2021.

That was weaker than a median 1.4% increase tipped in a Reuters poll of economists.

Declining prices of global oil and fresh food prices have been stabilising local inflationary pressure, although the fading low-base effects from last year could temporarily push up headline inflation going forward, according to the Bank of Korea.

"As for the future price path, core prices are expected to continue a stable trend around 2%, and consumer prices are also expected to approach 2% toward the end of the year," the BOK said in a statement after the data was released.

The BOK voted 6-1 to cut policy interest rates to 3.25% on October 11 as uncertainties regarding the future path of output increased while headline inflation in September undershot the bank's 2% target.

A separate poll conducted in early October showed analysts expect the country's base rate to remain at 3.25% by the end of this year.

The inflation index was unchanged on a monthly basis from September, also weaker than a 0.2% gain forecast in the poll.

The so-called core price index, which strips out volatile food and energy prices, increased 1.8% from a year earlier, the weakest since Sept. 2021.

Prices of apple and green onions dropped 20% and 13.9% from a year earlier, respectively. Petroleum prices decreased 10.6% on the year.

Investing.com-- The S&P 500 closed lower Monday as traders opted for caution ahead of the presidential election and the Federal Reserve's rate decision later this week. 

At 4:00 p.m. ET (2100 GMT), the Dow Jones Industrial Average dropped 257 points, or 0.6%, the S&P 500 index slipped 0.3%, and NASDAQ Composite fell 0.3%.

Trump, Harris set for tight presidential race

Investors were largely on edge before presidential elections on Tuesday, with recent polls showing Donald Trump and Kamala Harris were set for a tight race.

Recent increases in the dollar and Treasury yields showed some investors were positioning for a Trump victory, which is expected to result in more inflationary policies.

Analysts indicating that the outcome could significantly impact the market performance, especially the Big Tech sector.

Specifically, according to Wedbush analysts, a potential Trump victory is causing concern among global tech investors due to the possible escalation of the US-China tech conflict and increased tariffs.

“A major change in tariffs and a harsher stance on China we believe would significantly impact the supply chain, Nvidia (NASDAQ:NVDA), Beijing retaliatory impacts on Apple/Tesla likely, and slow the pace of the AI Revolution,” analysts led by Dan Ives said in a note.

NVIDIA Corporation (NASDAQ:NVDA), meanwhile, is set to join the Dow Jones Industrial Average on Friday, replacing struggling chipmaker intel.  

The quarterly earnings season is set to continue, with around a fifth of the companies in the benchmark S&P 500 due to unveil their latest quarterly earnings this week.

Earnings season continues 

Berkshire Hathaway Inc Class A (NYSE:BRKa)'s weaker than expected Q3 operating earnings totaled of $10.1B in the third quarter missed analyst forecasts, sending the stock more than 2% lower.

Marriott International (NASDAQ:MAR) stock fell 1.6% after the hotel operator cut its annual profit forecast, as domestic travel demand in the U.S. and China remains weak.

Viking Therapeutics (NASDAQ:VKTX) stock gave up gains to trade 13% lower as concerns about the drug maker's ability to mass produce its oral weight-loss drug offset better-than-expected results from a Phase 1 trial.

Fed set to cut interest rates

Focus this week is also on a Fed meeting, with the central bank widely expected to cut interest rates by 25 basis points after a 50 bps cut in September.

Markets will be watching for any commentary from the Fed on its plans for future rate cuts, especially in the light of recent data showing resilience in the U.S. economy and stickiness in inflation, which dampen the outlook for lower rates.

"We expect that the FOMC will deliver a 25 bp cut next week, and the focus will be on potential statement changes and the press conference with Chair Powell," UBS said in a recent note.

But Fed Chair Jerome Powell is unlikely to commit to any set pace of monetary easing, given that the central bank has so far maintained a data-driven approach to policy.

Still, the meeting comes after nonfarm payrolls data on Friday showed job growth slowed sharply in October, with a downward revision in readings for the past two months indicating that the labor market was cooling.

(Peter Nurse, Ambar Warrick contributed to this article.)

By Liz Lee

BEIJING (Reuters) -China has urged France to push the European Commission towards a solution acceptable to both the European and Chinese electric vehicle industries, while France said the bloc would not yield on key matters as it pushes to overturn a tariff on brandy.

The EU launched an anti-subsidy investigation into imports of Chinese-made battery EVs last year and in October voted for tariffs on those vehicles. China in recent months has launched its own investigations into European pork and dairy, and imposed temporary anti-dumping measures on imports of brandy from the EU in October.

Chinese Commerce Minister Wang Wentao, in a meeting with French junior trade minister Sophie Primas in Shanghai on Sunday, urged Paris to take on "an active role" to nudge the EU on Chinese EVs.

He reiterated the bloc's investigation was a major concern that has "seriously hindered" China-EU auto industry cooperation.

Primas told Wang that EU refuses to escalate the situation and continues to trade with China "but will not yield to pressure on the essential points".

"We will continue to defend fairer competition that benefits everyone," a statement from her press office showed, adding that Wang was open in their discussions to consider the propositions of French brandy producers.

Primas is on a three-day visit to challenge China over its import duties on brandy, which Paris calls political and unjustified, Reuters reported last week.

Wang told Primas Beijing's trade remedy investigations on EU brandy, pork and dairy products were in accordance with the domestic industry's applications and complied with the World Trade Organization rules, "unlike the EU" which was "rash" in launching its EV probe.

By Shaloo Shrivastava

BENGALURU (Reuters) - India's manufacturing growth gained momentum in October after decelerating for three months as demand improved significantly, helping in job creation and leading to a better business outlook, according to a business survey released on Monday.

The HSBC final India Manufacturing Purchasing Managers' Index, complied by S&P Global, rose to 57.5 in October from an eight-month low of 56.5 in September and was above a preliminary estimate of 57.4.

"India's headline manufacturing PMI picked up substantially in October as the economy's operating conditions continue to broadly improve," noted Pranjul Bhandari, chief India economist at HSBC.

"Rapidly expanding new orders and international sales reflect strong demand growth for India's manufacturing sector."

The output and new orders sub-indexes rose to three-month highs with a notable increase in demand.

International demand improved from a year-and-a-half low in September. A desire for Indian goods lead to orders from Asia, Europe, Latin America and the U.S.

Buoyant demand also boosted the outlook for the year ahead.

"Business confidence is also very high due to expectations of continued strong consumer demand, new product releases, and sales pending approval," added Bhandari.

To meet growing demand, firms took on many more workers than in September. Hiring increased for an eighth consecutive month.

That would probably bring some relief to the government, which has failed to create enough well paying jobs for those entering the workforce. Economists cautioned job creation will remain muted over the next 12 months, a Reuters poll published a week ago showed.

Inflationary pressures increased with both input and output prices rising faster. Input cost inflation was the highest in three months, elevated by higher material costs, wage bills and transportation fees.

Firms passed on the extra costs to their clients at a much quicker pace than in September.

India's inflation rose to a nine-month high of 5.49% in September, largely driven by higher food prices and close to the upper end of the Reserve Bank of India's (RBI) 2-6% target.

Despite that, a separate Reuters poll last week showed a slim majority of economists expected the RBI to cut interest rates in December, to 6.25% from 6.50% currently.

Investing.com-- Most Asian stocks rose on Monday with investors looking to more cues on fiscal stimulus from a meeting of China’s top policymakers this week, although risk aversion before the U.S. elections kept gains limited.

Regional trading volumes were also low on account of a market holiday in Japan. Nikkei 225 futures fell 0.2%. 

Asian markets took some positive cues from a softer-than-expected U.S. nonfarm payrolls reading on Friday, which furthered bets that a cooling labor market will bring more interest rate cuts from the Federal Reserve. 

U.S. stock steadied in Asian trade, with focus also turning to an upcoming Fed meeting this week. 

Chinese stocks upbeat as NPC meeting begins

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.5% and 0.3%, respectively, while Hong Kong’s Hang Seng index added 0.7%.

The National People’s Congress’ Standing Committee begins a four-day meeting on Monday, where the body is widely expected to outline more fiscal spending.

Recent reports said the body could approve an additional $1.4 trillion in new debt over the coming years to boost growth, especially as the Chinese economy grapples with persistent deflation and a prolonged property market crash.

The NPC meeting is likely to provide more cues on the implementation and scale of fiscal support outlined by Beijing over the past month. While Chinese stocks had initially clocked strong gains on optimism over the new measures, they trimmed a bulk of these gains on doubts over the timing and scale of the stimulus. 

Australia stocks rise, RBA in focus

Australia’s ASX 200 added 0.3%, remaining close to recent record highs with focus squarely on a Reserve Bank of Australia meeting on Tuesday.

The RBA is widely expected to keep rates unchanged, although the central bank may strike a hawkish tone due to Australian inflation remaining sticky. 

The RBA is also expected to flag a potential delay in any plans to cut interest rates, due to sticky inflation and strength in the job market. ANZ expects the central bank to only begin cutting rates in the first quarter of 2025. 

Broader Asian markets advanced, although gains were mostly skittish in anticipation of the U.S. elections and the Fed meeting. 

Recent polls showed Donald Trump and Kamala Harris were set for a tight race on Tuesday. Increased speculation over a Trump victory had pressured Asian markets in recent sessions, given that Trump has vowed to impose steep trade tariffs on China.

On Monday, South Korea’s KOSPI rose 1.4%, outperforming its regional peers on strength in local chipmaking stocks.

Futures for India’s Nifty 50 index pointed to a flat open, as Indian stocks struggled after tumbling from record highs in October. More key Indian earnings are also due this week.