• Asia-Pac equities traded with losses across the board as the region took its cue from the downbeat Wall Street handover
• Differences continue to narrow in US stimulus talks but more work needs to be done. Pelosi and Mnuchin will speak again today, according to her aide
• US FBI Director said US has identified Russia and Iran to have taken action to interfere with the election
• In FX, DXY retraced some of yesterday’s losses, EUR/USD fell below 1.1850, Cable held onto 1.3100, USD/CNH drifter higher
• Operation Warp Speed Chief Slaoui stated AstraZeneca and Johnson & Johnson COVID vaccine trials will restart this week
• Looking ahead, highlights include German GfK Consumer Confidence, US Weekly Jobs & Existing Home Sales, EZ Consumer Confidence (Flash), CBRT Rate Decision, BoE's Bailey & Haldane, Fed's Kaplan & Barkin, ECB's Panetta & Hakkarainen, supply from the UK
• Earnings include STMicroelectronics, AT&T, Intel, American Airlines, Coca-Cola. Southwest

CORONAVIRUS UPDATE

US 60,426 (prev. +60,061) new COVID-19 cases and 863 (prev. +513) additional deaths. New York COVID stats: Cases +2,026 (prev. +1,201); positivity rate 1.62% (prev. 1.32%), Hospitalisations 950 (prev. 942); deaths +7 (prev. +12). (Newswires)

France reported 26,676 (prev. +20,468) new COVID-19 cases and 163 (prev. +163) additional deaths. Germany reported 11,287 (Prev. 7,595) new COVID-19 cases and 30 (Prev. 39) additional deaths, according to RKI. UK reported 26,688 (prev. +21,331) new COVID-19 cases and 191 (prev. +241) additional deaths. (Newswires)

Operation Warp Speed Chief Slaoui stated AstraZeneca (AZN, AZN LN) and Johnson & Johnson (JNJ) COVID vaccine trials will restart this week. (Newswires)

AstraZeneca (AZN)/ University of Oxford COVID vaccine volunteer in Brazil who died reportedly did not receive the vaccine, according to a source. (Newswires)

Fujifilm (4901 JT) partnered with China’s CareLink to deploy Avigan tablets in China. (Newswires) Note: Avigan has shown positive results in COVID-19 Phase III trial

ASIA

Asia-Pac equities traded with losses across the board as the region took its cue from the downbeat Wall Street handover, which saw the Dow reverse its earlier gains and the S&P and Nasdaq close the day with modest losses as participants tracked stimulus developments. In terms of the electronic reopen, US equity futures opened flat but lost ground after the FBI Director announced that US has identified Russia and Iran to have taken action in order to interfere with the 2020 election, with under a fortnight to go until voters head to the polls. This sentiment reverberated into APAC indices – losses in the ASX 200 (-0.6%) were led by the oil and mining sectors, whilst Nikkei 225 (-0.7%) saw lacklustre performances across its industrial, auto and pharma names, while airliner ANA holdings fell to the foot of the index after sources suggested the Co. is to post a record annual loss and shed half of its fleet. KOSPI (-1.2%) also held onto losses in-line with the regional performance, whilst a South Korean business lobby group called on Japan to ease its restrictions on exports of key industrial products to South Korea in a bid to help improve strained ties between the two countries. In China, Hang Seng (-0.4%) and Shanghai Comp. (-0.8%) conformed to the glum tone, and with geopolitical tensions heating up as the Pentagon confirmed last week’s source reports that it notified US Congress of three possible military sales to Taiwan, a move repeatedly contested by Beijing. Finally, JGB futures track action in the fixed income futures complex amid a lack of pertinent data, auctions or news flow.

PBoC sets USD/CNY midpoint at 6.6556 vs. Exp. 6.6521 (Prev. 6.6781); the firmest CNY fix since July 11 2018  (Newswires) PBoC injected CNY 50bln via 7-day reverse repos at a maintained rate of 2.20% for a net neutral daily position.

A South Korean business lobby group on Thursday called on Japan to ease its restrictions on exports of key industrial products to Korea to help improve strained ties between the two countries. (Yonhap)

CENTRAL BANKS

Fed's Bullard (non-voter) said Fed is not battling with markets; markets believe Fed will keep rates low for a while, Fed is buying bonds at a healthy clip and will need to think about how to play QE going forward and negative rates are not a good option. (Newswires)

Fed Beige Book noted economic activity continued across all districts, with pace of growth characterised as slight to modest in most. (Fed)

South Korea and China have agreed to extend FX swap agreement by 5yrs and expand the agreement to CNY 400bln (Prev. CNY 360bln). (Newswires)

UK/EU

UK PM Johnson's office said they are ready to welcome EU team to London to resume negotiations later this week. The office added Brexit Negotiator Barnier’s words were authoritative, but it is entirely possible negotiations will not succeed. Brexit Negotiator Frost said intensive talks will happen every day and start this afternoon in London (Newswires)

UK Chancellor Sunak is to unveil fourth COVID-19 support package for ailing firms, according to The Guardian. (Guardian) UK Chancellor is understood to be working on a compensation package for thousands of businesses whose trade is restricted by COVID-19 restrictions; Sunak is poised to announce extra help for pubs and restaurants. (Telegraph)

ECB's Makhlouf says the Irish central bank changed its base case to assume no deal between EU and UK. (FT)

FX

In FX, DXY traded firmer within a relatively narrow band after climbing off worst levels in a move which coincided with the FBI identifying Russia and Iran as culprits in election interference. From a technical standpoint, the DXY downside in the prior session saw the index dip below 92.500 to a low of 92.469, with the next recent low residing at 92.418 (27th Aug low) and with a few daily August lows scattered between 92.500 and 92.000 ahead of the current 2020 low at 91.737. EUR/USD was modestly pressured as it moved below 1.1850 after reaching a peak of 1.1880 during yesterday’s session, whilst downside levels include the 50 DMA which overlaps with the 1.1800 psychological mark. GBP/USD retained its 1.3100+ status on relief that the EU and UK will continue negotiations on a post-Brexit trade deal with EU negotiators expected to arrive in London as soon as today, with the aim for a deal by mid-November. Elsewhere, Antipodeans were uneventful and largely tracked the Dollar, with AUD/USD meandering around 0.7100 throughout most the session thus far and NZD/USD trading just below 0.6650, albeit losses in the AUD are slightly more pronounced than its Kiwi counterpart as AUD/NZD surrendered its 1.0700 handle. The Loonie stood as the G10 laggard throughout most of the overnight session, potentially on influence from the decline crude prices, as USD/CAD inched further above 1.3150. USD/JPY also drifted higher as the Buck trimmed some of yesterday’s losses, and with the pair eyeing a sizeable USD 2.6bln in opex at strike 104.50. USD/CNH moved higher in early APAC hours before pausing on account of another firm PBoC Yuan fix, which marked the strongest fix since July 2018, thereafter price action in the onshore and offshore pairs resumed to the upside. Finally, USD/KRW opened trade lower on due to the prior day’s USD softness, however this led to verbal intervention by the South Korean Finance Minister who said action will be taken to stabilise FX markets if needed, and subsequently, traders suspected the BoK of buying USD/KRW to stem the recent strength, whilst the BoK and PBoC extended and expanded their FX swaps agreement.

South Korean Finance Minister said they will take action to stabilise FX markets if needed. BoK was suspected of purchasing USD to curb KRW gains, according to FX dealers. (Newswires)

COMMODITIES

WTI and Brent front month futures saw a lacklustre overnight session with both benchmarks hovering around the prior day’s lows as sentiment weighed on the crude complex. WTI remained sub-40/bbl whilst Brent found some mild overnight support at USD 41.50/bbl. On the supply side, Norway's Industri Enegi trade union said it agreed on a new wage deal with oil service companies. Elsewhere, precious metals traded on a softer footing as the DXY drifted off yesterday’s lows, with spot gold testing inching closer towards USD 1900/oz to the downside (vs. high 1926/oz) and spot silver lost further ground below USD 25/oz (vs. high 25.08/oz). Copper futures also pared back some of yesterday’s gains amid Dollar-dynamics and losses across APAC stocks.

Norway's Industri Enegi trade union has agreed a new wage deal with oil service companies. (Newswires)

ABN AMRO sees WTI averaging USD 34/bbl in 2020 and USD 43/bbl in 2021. Goldman Sachs sees a bull market emerging for commodities in 2021. (Newswires)

GEOPOLITICS

US FBI Director said US has identified Russia and Iran to have taken action to interfere with the election. Iran sent spoof emails to intimidate voters, Russia obtained some voter information Intelligence Community caught threat and reacted swiftly (Newswires) US government has concluded that Iran is behind a series of threatening emails arriving this week in the inboxes of Democratic voters, according to two U.S. officials cited by Washington Post. (Washington Post)

US State Department said Pentagon has notified congress of three possible military sales to Taiwan; deal could have a value of up to USD 1.8bln. (Newswires) This is in-fitting with sources last week which suggested the White House is moving forward with three sales of advanced weaponry to Taiwan. Missile drills in the South China Sea and aeronautical limitations were the reasons a Taiwanese aircraft was denied entry into Hong Kong airspace en route to the Pratas Islands last week, according to a military insider. (SCMP)

Turkey’s S-400 test from last Friday reportedly failed, according to Greek City Times citing Russian military blogs. (Newswires)

Syrian army were reportedly bombarding Turkish groups in northern Syria, according to Kurdistan224 journalist. (Newswires)

A top Trump admin official secretly met with a representative of Venezuelan leader Maduro’s regime last month to try to negotiate the leader’s peaceful exit from power, sources cited by Bloomberg's Jacobs. (Twitter)

US

Yields continued to rise on Wednesday although were off their highs in later trade amid the choppy risk tone and 20-year auction out the way. By settlement, 2s +0.2bps at 14.9bps, 10s +1.6bps at 81.3bps, 20s +1.8bps at 138.2bps, 30s +1.8bps at 162.1bps; T-Note futures volumes were decent. Treasury futures had been offered out of the APAC session in quiet overnight trade and a continuation of Tuesday’s bear-steepener. However, as Europe came to their desks stocks saw some selling pressure, seeing investors bid up EGBs, seeing spillover strength for USTs. The T-Note traded choppy for the rest of the session, although maintained its losses throughout, despite the to-and-froing of stimulus hopes on wider risk assets; there has been continued doubt cast by GOP Senators and Pelosi has been alluding to a post-election deal. Furthermore, reports that a candidate had died in the AZN/Oxford Uni trial also brought haven bidders out of the woodwork, but that concern was relived as it became clear the candidate was on placebo and not the actual virus. The USD 22bln 20-year Treasury bond auction went down okay, stopping through the 1.371% WI by 0.1bps. The removal of the risk of a poor auction saw some additional strength, with newswires noting that dealers were covering unmatched shorts from the auction, in addition to fast and real money accounts unwinding steepeners. T-note (Z0) futures settled 4 ticks lower at 138-18+

US House Speaker Pelosi and Treasury Secretary Mnuchin's conversation brought the sides closer to "being able to put pen to paper to write legislation". Differences continue to narrow but more work needs to be done. Pelosi and Mnuchin will speak again today, according to her aide. (Twitter)

US House Speaker Pelosi suggested it is very possible a deal will slip until after the election, noting the outstanding issue on state and local funding. US House Speaker Pelosi hopes a deal can be reached by November 3rd, adding it is up to whether President Trump can convince Senate Majority Leader McConnell to do so, although she believes McConnell might not mind waiting until after the election. (Politico)

White House Spokesman Morgenstern said it is possible for the White House and Congress to reach a stimulus deal before the election, although some think it is better to wait until after. (Newswires) Senate Appropriations Chair Shelby sees a slim chance of a stimulus vote before the election. (Newswires) White House Chief of Staff Meadows says there are a number of differences still in the COVID-19 relief talks; says Trump is "willing to lean into this" (Fox)

US President Trump tweeted that he does not see any way US House Speaker Pelosi and Senate Minority Leader Schumer doing the right thing for workers, regarding COVID-19 relief. (Twitter) White House communications director says he is cautiously optimistic on a stimulus deal, 'the best we have felt for a deal so far'. (Newswires)

There is almost no operational way the House and the Senate could move such a stimulus bill before the election, according to Fox's Pergram, with Congressional sources believing that the effort from both sides is to give the appearance they are trying to get a deal just before the election. (Twitter)

Senate Democrats block the Senate republicans USD 500bln aid bill, as expected. (Newswires)

POLL: Fox News Poll shows Biden tops Trump in Michigan, Pennsylvania, Wisconsin; but Trump leads in Ohio; conducted Oct 17-20 state-wide among likely voters +/- 3ppts error margin: Michigan: Biden 52% Trump 40%, Pennsylvania Biden: Biden 50% Trump 45%, Wisconsin: Biden 49% Trump 44%, Ohio: Biden 45% Trump 48%. (Fox) 

POLL: Quinnipiac Texas poll Oct 16/19: Trump and Biden tied at 47% (prev. poll from Sept 17/21 had Trump +5; RCP average Trump +4.4). (Quinnipiac) Reuters/Ipsos poll in Arizona sees Biden at 49% backing vs 46% for Trump. Reuters/Ipsos poll sees Biden take the lead with 50% backing vs 46% for Trump. (Newswires)

Tesla Inc. (TSLA) - Q3 2020 (USD): EPS 0.76 (exp. 0.57); Revenue 8.77bln (exp. 8.36bln). Maintains FY guidance of 500k deliveries, but says it has become more difficult. Co. said achieving 500k deliveries is dependent on Q/Q increases in Model Y and Shanghai production, as well as improvements in logistics and delivery efficiency at higher volumes. Co. noted Shanghai Model 3 production capacity has increased to 250k units per year. CEO Musk said hopefully there will be a wide release of the full self-driving feather by year-end (Newswires) ­Shares rose 3% after market