• Asian equity markets traded somewhat mixed after a tentative lead from Wall St due to ongoing trade uncertainty
• US-China trade talks have hit a snag over agricultural purchases according to the WSJ
• Sentiment was also hampered overnight by weaker than expected Chinese Industrial Production and Retail Sales data
• UK Tory party was said to offer a deal to the Brexit Party in which the latter would only contest 40 seats, although this was rejected by party leader Farage
• Looking ahead, highlights include German Flash GDP, UK Retail Sales, EU Flash Employment & GDP, US Initial Jobless Claims, Weekly EIA Inventories, OPEC Monthly Report, Banxico Rate Decision, Fed’s Clarida, Evans, Powell, Daly, Williams, Bullard, Kaplan, Norges Bank’s Nicolaisen, ECB’s de Guindos, Lane, de Galhau, SNB’s Maechler, RBNZ Governor Orr, supply from the UK
• Earnings: Merck, Henkel, Bouygues, RWE, National Grid, Burberry Group, Walmart, NVIDIA, Viacom

ASIA-PAC

Asian equity markets traded somewhat mixed after a tentative lead from Wall St peers due to ongoing trade uncertainty and as the region digested several substandard tier-1 data releases. ASX 200 (+0.6%) was positive as tech and consumer staples led the early broad gains across Australia’s sectors and with abysmal jobs data supporting prospects the RBA may need to ease further. Nikkei 225 (-0.6%) succumbed to softer than expected Q3 GDP which disappointed hopes of front-loading ahead of the sales tax hike and raised questions regarding the Q4 outlook, although there were some success stories with Yahoo Japan the biggest gainer on news of a potential merger with Line Corp which also provided a tailwind for their respective parents SoftBank and Naver. Hang Seng (-0.8%) was the laggard and Shanghai Comp. (+0.4%) was indecisive amid the ongoing precarious US-China trade climate as President Trump commented that a deal is moving along very rapidly, although other reports suggested trade talks may have hit a snag over agricultural purchases. Furthermore, sentiment was also dragged by weaker than expected Chinese Industrial Production and Retail Sales data, as well as a decline in profits by index heavyweight Tencent and continued unrest in Hong Kong where protesters persisted with their new strategy of weekday disruptions. Finally, 10yr JGBs were higher and broke through resistance at 153.00, with prices underpinned by the cautious sentiment, weaker than expected Q3 economic growth and firmer demand at the 5yr auction.

PBoC skipped open market operations for a net neutral daily position. (Newswires)

PBoC set CNY mid-point at 7.0083 vs. Exp. 7.0078 (Prev. 7.0026)

US President Trump said a trade deal with China is moving along very rapidly, while he also commented that he has been fully briefed on auto tariffs and will be making a decision fairly soon. (Newswires)

US-China trade talks have hit a snag over agricultural purchases according to reports which added that China is wary of putting a numerical figure on its commitment in the next potential agreement to avoid making the deal seem one-sided in Washington's favour. Furthermore, Chinese officials were said to have been resisting US demands for strong enforcement mechanisms and curbs on forced tech transfers. (WSJ)

China stats bureau said the economy faces many external uncertainties and downward pressure continues, but also noted China will resist economic downward pressure and needs efforts to achieve full-year employment target. (Newswires)

Chinese Industrial Production (Oct) Y/Y 4.7% vs. Exp. 5.4% (Prev. 5.8%). Chinese Industrial Production YTD (Oct) Y/Y 5.6% vs. Exp. 5.6% (Prev. 5.6%) Chinese Retail Sales (Oct) Y/Y 7.2% vs. Exp. 7.9% (Prev. 7.8%) Chinese Retail Sales YTD (Oct) Y/Y 8.1% vs. Exp. 8.1% (Prev. 8.2%)

Japanese Economic Minister Nishimura said GDP data shows economy in gradual recovery and that they will closely watch private consumption. Nishimura added they must be vigilant of the impact from the sales tax hike and will prepare against downside risks from overseas economy, while he noted the effects from worsening ties with South Korea had a big impact on exports. (Newswires)

Japanese GDP (Q3) Q/Q 0.1% vs. Exp. 0.2% (Prev. 0.3%, Rev. 0.4%).

Japanese GDP (Q3) Y/Y 0.2% vs. Exp. 0.8% (Prev. 1.3%, Rev. 1.8%)

UK/EU

UK Tory party was said to offer a deal to the Brexit Party in which the latter would only contest 40 seats, although this was rejected by party leader Farage. According to reports, PM Johnson was prepared to put up “paper candidates” in opposition Labour-held constituencies to give an advantage to Brexit Party rivals, although Brexit Party Farage turned down the offer as they would prefer the Tories withdrawing their candidates altogether from the seats as they could still attract votes. (Telegraph) Note, Political Parties have until 16:00GMT today to confirm candidates for the upcoming general election.

ComRes UK election poll showed Conservatives at 40% (+3), Labour at 30% (+1), Lib Dems 16% (-1), Brexit 7% (-2) in survey conducted November 11th-12th. (Twitter)

UK RICS Housing Survey (Oct) -5 vs. Exp. -4.0 (Prev. -2.0, Rev. -3). (Newswires)

FX

DXY was relatively unchanged in a continuation of this week’s range-bound trade following inconclusive inflation data and after Fed Chair Powell provided nothing new during his testimony in Congress. The greenback’s major counterparts were also lacklustre in which EUR/USD attempted a breakdown of the 1.1000 handle and with a pullback in GBP/USD from resistance at 1.2850, while USD/JPY and JPY-crosses are choppy with a slight bias to the downside in the aftermath of the soft data. Antipodeans were the underperformers with AUD/USD leading the declines after the poor Chinese data and weak Australian jobs numbers which showed an increase in the Unemployment Rate, as well as a surprise contraction in Employment Change.

Australian Employment Change (Oct) -19.0k vs. Exp. 15.0k (Prev. 14.7k). (Newswires) Australian Unemployment Rate (Oct) 5.3% vs. Exp. 5.3% (Prev. 5.2%)

COMMODITIES

Commodities were mixed with mild outperformance seen in WTI crude futures following a surprise draw in headline API crude inventories which built upon the support from recent comments by OPEC Secretary General Barkindo who suggested potential for an upside swing in crude demand and a sharp reduction of supply estimates for next year. Elsewhere, gold continued to consolidate alongside an uneventful greenback, while copper was lacklustre due to the cautious risk tone and disappointing Chinese data.

US API Weekly Crude Stocks -0.54mln vs. Exp. +1.60mln (Prev. +4.26mln). (Newswires)

GEOPOLITICS

US President Trump said the Syrian ceasefire is holding very well and the Kurds seem satisfied, while added the US left troops in Syria only to secure the oil and that he will be talking with Turkish President Erdogan about a potential trade deal. In related news, Turkey President Erdogan said Turkey expects the US to halt support for Kurdish YPG immediately, while he added that a US resolution on Armenian genocide is a shameful step. (Newswires)

A Gaza ceasefire has been agreed according to reports citing Egyptian and Islamic Jihad sources. (AFP/Twitter)

US

Yields were lower across the curve, with a bias towards narrower curve spreads, with the complex largely trading off of the over-arching risk tone from the APAC session and early European session, traversing sideways through US trade; US CPI, and a testimony from Fed chair Powell were digested with ease. There was some modest upside after the WSJ article on US/China trade talks hitting a snag, though the moves weren’t anything to write home about. US T-note (Z9) futures settled 11+ ticks higher at 128.28+.

Fed's Daly (Non-Voter, Dove) said rate cuts this year have put monetary policy in a very good place, while Daly added she is open to the idea that risks are on the downside but noted that the Fed's stance is right so far. (Newswires)