Oil slips as Vance reaches out to Iran hard-liner; Asian stocks mixed

Summary:

• Oil moved lower following reports that Vice President Vance, acting on President Trump's instruction, contacted Iranian hard-liner Mohsen Rezaei to restart peace negotiations.
• According to some analysts, Trump's comments suggested the letter may have concerned the U.S. blockade or Iranian assets that are frozen.
• Gold remained above $4,000 per ounce.
• RBNZ Governor Anna Breman stated that a December rate hike is highly probable, speaking a day after the central bank unexpectedly held rates; the New Zealand dollar ended the session flat.
• New Zealand's business confidence climbed to +53 in October, and the proportion of firms planning price hikes reached its highest point since May.
• The Hong Kong Monetary Authority kept its base rate at 4.25%, in line with the Federal Reserve's decision.
• Microsoft shares gained in after-hours trading, while Alphabet shares declined sharply.
• A group led by Nelson Peltz offered $1.4 billion to take Wendy's private.
• Samsung reported a record operating profit for the third quarter, but its shares slid as much as 6.6% after it postponed its shareholder-return plan.
• The Kospi dropped 2.8%, the Shanghai Composite fell 0.8%, and the Nikkei and Hang Seng were little changed.

Oil and Iran

During Asian trading, oil prices edged down amid reports of a new U.S. diplomatic effort with Iran. The Wall Street Journal reported that Vice President JD Vance sent a letter to Mohsen Rezaei, who serves as secretary of Iran's Supreme National Security Council and is considered a key hard-liner, aiming to revive peace talks. The letter, per the report, was sent on President Donald Trump's orders, despite Trump's threat to resume the war following the midterm elections next week.

Further reports provided additional context indicating a more concerted push. Some analysts interpreted Trump's comments to the media as suggesting the letter may have covered the U.S. blockade of Iranian ports or the unfreezing of Iranian funds, possibly about $6 billion in Qatar that were previously released for humanitarian purposes. Neither matter has been confirmed. ANZ warned that oil price risks stay high, pointing to ongoing Houthi strikes on Saudi energy facilities.

Gold

Gold traded above $4,000 per ounce. A Reuters poll released this week indicated that analysts have lowered their 2026 forecast for the second consecutive quarter, attributing the cut to high yields and a robust dollar tied to the Iran conflict, while anticipating a rebound in 2027.

New Zealand

Reserve Bank of New Zealand Governor Anna Breman stated that a December rate hike is highly probable, also noting that the entire committee agrees on the likelihood of further increases, although the timing remains unclear. Her remarks followed the RBNZ's unexpected decision to hold the cash rate at 2.75% a day earlier. The New Zealand dollar finished the session nearly unchanged. Separately, the ANZ Business Outlook survey indicated business confidence increased to +53 in October, and the proportion of companies intending to raise prices reached its highest level since May.

Hong Kong

As anticipated, the Hong Kong Monetary Authority maintained its base rate at 4.25%, in line with the Federal Reserve's decision to keep rates unchanged. Because of Hong Kong's currency peg, the base rate is 50 basis points above the lower bound of the Fed funds target range.

Company news

Microsoft shares gained in after-hours trading following better-than-expected results, as Azure growth picked up and the CFO stated that the company anticipates remaining cash flow positive even with increased capital expenditure. Alphabet shares dropped sharply in after-hours trading, as a shortfall in search advertising and negative free cash flow offset Google Cloud revenue that more than doubled.

An investor group headed by Nelson Peltz's Trian Fund Management made a cash offer of $7.35 per share to take Wendy's private, giving the burger chain a valuation of roughly $1.4 billion.

Samsung Electronics posted a record third-quarter operating profit of roughly 107 trillion won, fueled by demand for AI memory chips. However, its shares gave up earlier gains and dropped as much as 6.6% after the company stated it would postpone disclosing details of a shareholder-return plan until late January. In contrast, rival SK Hynix has unveiled approximately $45 billion in extra returns. The stock was also hit by chip margins that fell short of expectations and a nearly 60% increase in capital expenditure this year.

Equities

Asian equity markets showed a mixed performance. South Korea's Kospi declined 2.8% and the Kosdaq dropped 2.9%, with Samsung's decline exerting significant pressure. The Shanghai Composite lost 0.8%, while Japan's Nikkei and Hong Kong's Hang Seng were roughly flat.