# Nov 1 China-US Policy Brief: PBOC Anchor Switch Takes Effect Nov 2, Midterms in Final 48 Hours

Source: https://aistim.cn/en/policy/policy-20261102-e308d91e
Language: en
Published: 2026-11-02T01:14:35.524Z
Updated: 2026-11-02T01:14:35.524Z
Author: AISTIM

China's 1.25% overnight repo rate becomes the main policy rate on Nov 2; a new VAT withholding regime for individuals takes effect Nov 1; US midterms vote Nov 3 with polls and prediction markets favoring Democrats in the House; watchlist: Apple, Palantir and AMD report earnings this week.

## US Policy

### Midterms in final 48 hours: Nov 3 vote, polls and prediction markets favor Democrats in the House, Senate close (preview, polls are not results)

Election Day is Tuesday, Nov 3. All 435 House seats and 35 Senate seats are on the ballot. Republicans currently hold the House 218-214, so Democrats need a net gain of four seats to flip it; in the Senate, Republicans lead 53-47, so Democrats also need a net gain of four. As of Nov 1: the RealClearPolling generic ballot puts Democrats ahead by 8.3 points (50.2% to 41.9%); Polymarket and Kalshi price Democrats' chances of retaking the House at 92%-93% and the Senate at 68%; Decision Desk HQ's model gives Democrats 80% for the House (projected 238 seats) and 60% for the Senate (projected 52 seats). President Trump said on Nov 1 that if Democrats win a majority he may have to become "Mr. Veto," and he held final rallies in Kansas and Iowa the same day. Reuters reported on Nov 1 that White House officials have since April been preparing a "govern without Congress" playbook, exploring expanded executive action on immigration, tariffs, housing costs and federal spending while preparing defenses against possible congressional investigations.

### Fed watch: December 8-9 hike odds around 70%-72%, October jobs report the key test (market pricing, not a Fed commitment)

As of Nov 1, Kalshi and Polymarket both price a 25-basis-point hike at the Dec 8-9 meeting at about 70.5%-72%, with no change at about 28%; CME FedWatch shows the same 72%/28% split, slightly narrower than the 71.4%-80% range in the Oct 30 edition. October nonfarm payrolls, due Friday, are expected by a Bloomberg survey to rise by 60,000 (September: 29,000) with unemployment flat at 4.2%; a hiring rebound would strengthen December hike pricing.

### Trump reportedly plans to resume strikes on Iran the day after the midterms (unconfirmed report)

Cailian Press reported on Oct 31 that Trump reportedly plans to resume strikes on Iran the day after the midterms, with Gulf states told to prepare for action as early as Nov 4; US Central Command on Oct 30 denied Iran's claim that it had destroyed a US uncrewed surface vessel in the Strait of Hormuz. This remains a "reportedly" account without official US confirmation and is recorded here as such, not as an established fact.

## China Policy

### PBOC anchor switch on Nov 2: overnight repo at 1.25% becomes the main policy rate (announced, first-day outcome pending)

The People's Bank of China announced on Oct 30 that from Nov 2 it will conduct overnight reverse repo operations every working day via fixed-rate, quantity tenders, at 1.25% currently; the 7-day reverse repo shifts to fixed-quantity, interest-rate tenders with multiple-price allotment, used mainly around tax periods and month-ends; other tools previously priced off the 7-day rate switch to the overnight rate with unchanged spreads. The overnight DR001 rate averaged 1.2890% on Oct 30 and 1.2805% for October as a whole. A Nov 2 BT Finance analysis added that on the evening of Nov 1 the PBOC convened securities and fund firms to discuss capital-market support tools, while the financial regulator and the securities regulator jointly studied optimizing the relending facility for share buybacks and stake increases, though specific terms have not been disclosed. Nov 2 is the first day; operation size and whether DR001 holds near 1.25% remain to be verified.

### VAT withholding for individuals takes effect Nov 1: seven services, payer withholds (announced)

Under the Ministry of Finance and State Taxation Administration's measures on withholding VAT for individuals, from Nov 1 domestic entities paying individuals for seven services - R&D, software, design, consulting, radio/TV program production, cultural services and education services - must withhold VAT. This is China's first individual VAT withholding regime, implementing the VAT Law. The statutory VAT rate is 3%, reduced to 1% through end-2027. The change shifts compliance costs to payers and affects freelancers, part-time university staff, consultants and content creators.

### "15th Five-Year Plan" special plans: consumption target of 60 trillion yuan retail sales by 2030, "six networks" investment disclosed (announced)

Xinhua reported on Nov 1 that the State Council approved the consumption "15th Five-Year Plan" in July, the first national-level special plan for consumption, targeting retail sales of about 60 trillion yuan by 2030 across 28 tasks in six areas, with elderly care, childcare, tourism and health services prominent. For the "six networks," planned investment in the new power grid and urban underground pipe networks is about 5 trillion yuan each during the plan period, with about 4 trillion yuan of new direct investment in the computing-power network. The policy chain extends from subsidizing consumption to fixing infrastructure gaps, benefiting grid equipment, pipe networks, computing infrastructure and consumer services.

### Gas turbine guidance: four agencies target a self-reliant industrial chain by 2030 (announced)

The National Energy Administration, the Ministry of Industry and Information Technology, the State-owned Assets Supervision and Administration Commission and the market regulator jointly issued guidance on gas turbine innovation, covering R&D, manufacturing and testing, collaborative innovation, pilot applications, policy support and implementation, targeting a fully self-reliant industrial chain by 2030, with new-fuel adaptation, AI-enabled operations, intelligent maintenance platforms and industry databases. Gas turbines underpin flexible regulation of the new power system and oil and gas supply security.

### A-share Q3 earnings season closes; Binance hack update

Xinhua Finance counted 5,572 listed companies reporting Q3 2026 results by 8 a.m. on Oct 31: combined revenue of 56.66 trillion yuan, up 5.66% year on year, and net profit attributable to shareholders of 5.10 trillion yuan, up 8.30%; electronics led industry profit growth at 236.89%, followed by nonferrous metals at 70.26%; the six state banks together earned 1.14 trillion yuan in the first three quarters, up 6.14%. On the Binance case, withdrawals resumed in phases on Nov 1, with about 95% of the stolen $6.3 billion in assets replaced (up from 90%), about $3 billion frozen, and a full proof-of-reserves statement expected by Nov 3; the FBI has linked the attack to the North Korea-linked TraderTraitor group.

## US-Stock Watchlist

### Apple (AAPL): fiscal Q4 results after the close on Nov 2

Wall Street expects EPS of about $1.98-$1.99 and revenue of about $113.3 billion (up about 10%-11% year on year), with gross-margin guidance of 47%-48% (including about 1 point from tariff refunds). Focus: iPhone 18 Pro demand, memory-cost pressure on margins, and December-quarter guidance. The stock closed Oct 30 at $344.63; the analyst consensus target is about $340.88 (FMP data, Nov 1), TipRanks' average target is $337.77, and Bank of America keeps a $370 Buy target while cutting its fiscal 2027 iPhone shipment forecast by 9 million units to 247 million. Risks: memory and component inflation, supply constraints, margin guidance shortfall. For informational purposes only, not investment advice.

### Palantir (PLTR): Q3 results after the close on Nov 2

Wall Street expects EPS of $0.41 and revenue of about $2.18 billion (up about 85% year on year), after Q2 revenue of $1.935 billion (up 93%); full-year revenue guidance stands at $8.15-$8.158 billion. The stock closed Oct 30 at $184.11; TipRanks' average target is $218.95, but analysts are deeply split - Baird at $250 (Buy) versus RBC at $90 (Sell) - and options price about a 13.3% post-earnings move either way. Risks: stretched valuation (forward P/E near 89x versus about 28.3x for the industry) and guidance disappointment. For informational purposes only, not investment advice.

### AMD (AMD): Q3 results after the close on Nov 3

Wall Street expects EPS of $1.95 and revenue of about $13.09 billion (up about 41.5% year on year); the company's Q3 revenue guidance was about $13.0 billion (plus or minus $300 million) with gross margin near 56%. The stock closed Oct 30 at $504.80 (down 10.88% on the day); Susquehanna, Jefferies and Bernstein all carry $650 Buy targets, and TipRanks' average target is $664.31. Focus: data-center GPU MI450 and Helios ramp and Q4 guidance. Risks: memory and HBM price inflation, TSMC advanced-capacity constraints, and technical risk below the $502.66 support level (FXLeaders view). For informational purposes only, not investment advice.