• The winner of the US Presidential Election has still yet to be declared, although Democrat Candidate Biden leads in electoral votes
• In the immediacy, we are expecting updates from Nevada (6 ECV) from 12:00ET/17:00GMT today while Arizona (11 ECV) is not expected until after 21:00ET Thursday / 02:00GMT Friday
• Currently, US equity futures are firmer with ES +1.8%, NQ +2.7%, YM +1.0%; DXY has dropped below the 93.00 mark and the yield curve is bull-flattening
• BoE increased the asset purchase programme by GBP 150bln vs. Exp. GBP 100bln, no new commentary on negative rates; Norges Bank U/C as expected
• EU negotiators have cleared the key Recovery Fund hurdle, with an agreement on the Rule of Law reached, according to a spokesperson
• Looking ahead highlights include FOMC rate decision & Fed Chair Powell, ECB's Schnabel, de Guindos & Weidmann
• Earnings: T-Mobile, Alibaba, General Motors & Uber

US ELECTION UPDATE

The winner of the US Presidential Election has still yet to be declared, although Democrat Candidate Biden leads in electoral votes with Fox News tallies President Trump at 214 vs. Biden at 264 (including Arizona), while CNN tallies President Trump at 213 vs. Biden at 253, with close races in several key states remaining to be called including Georgia (16 votes), Pennsylvania (20 votes), Arizona (11 votes), North Carolina (15 votes) and Nevada (6 votes).

In the immediacy, we are expecting updates from Nevada from 12:00ET/17:00GMT today while Arizona is not expected until after 21:00ET Thursday / 02:00GMT Friday. Assuming Arizona is included, if Nevada goes in favor of Biden (as polls are indicating with 86% of votes tallied) then this would be sufficient to secure a Biden Presidency. Conversely, for Trump to secure the win he would require Georgia, Pennsylvania, North Carolina & Nevada to all be declared in his favor. (link to newsquawk analysis on the election as it stands)

The race has also been complicated by the threat of legal action with the Trump campaign reportedly considering legal action in Arizona and Nevada, while they also filed a suit in Georgia to require all the state's counties to separate all late-arriving ballots and sought to challenge late-arriving Pennsylvania ballots prompting the Supreme Court to instruct Democrats to respond by 1000GMT/0500EST. The Trump campaign said it will immediately request a recount in Wisconsin after the margin between the 2 candidates was less than 1ppt and a Wisconsin election official separately commented that results will be certified on December 1st, although the Wisconsin Attorney General suggested the Trump campaign may not proceed with a recount and that there was basically a zero chance of an election result change. (Newswires/MSNBC)

Democrat Presidential Candidate Biden said it is clear that he is winning enough states to win the Presidency but not declaring that he has won until votes have been counted, while he stated that every vote must be counted and he is confident he will emerge victorious. (Newswires)

NY Times tally the Republican Party as currently having 48 Senate seats, Democrats at 48 seats, other parties at 2 seats with 4 to still be called. (51 required for Senate control)

CORONAVIRUS UPDATE

AFP tweeted US COVID-19 cases hit a new daily record topping 99k cases citing Johns Hopkins, while a major newswire tally noted that US cases rose by at least 104,970 which was its highest single day increase. (Newswires)

UK COVID cases +25,177 (prev. +20,018) and deaths +492 (prev. +397). (Newswires)

Italy PM Conte announced to impose intermediate new COVID-19 restrictions in Puglia and Sicily region, while the toughest new restrictions will be placed on Calabria, Lombardy, Piedmont and Valle D’Acosta. Furthermore, the government stated stricter measures to help contain the coronavirus will take effect from Friday and it will approve new stimulus measures next week. (Newswires)

AstraZeneca (AZN LN) says it is ready to supply hundreds of millions of COVID-19 vaccines; weekly delivery schedule of vaccines will roughly match what UK govt has in mind for vaccination plans. (Newswires)

ASIA

Asian equity markets were higher across the board as the region took impetus from global peers including the tech-led rally on Wall Street as further election results trickled in and although the presidency still hangs in the balance with several key states still to be declared, betting markets have Biden as a heavy favourite and Fox News also tallies him as just 6 electoral votes shy of a victory at 264 vs. 214 for President Trump. Meanwhile, prospects of a Blue Sweep diminished which underpinned tech and defensives stateside. ASX 200 (+1.3%) was led higher by tech and healthcare with financials also buoyed after NAB topped forecasts for FY cash profit despite declining 37% Y/Y, although upside in the index was capped by weakness in the commodity sectors and ongoing souring of ties with China which saw Treasury Wine Estates slump on news China may impose anti-dumping duties of more than 200% on wine imports from Australia. Nikkei 225 (+1,7%) was also buoyed and rose above the 24k level to print its highest level since January, while Hang Seng (+3.3%) and Shanghai Comp. (+1.3%) moved higher in tandem with the rising tide across global stocks and despite a liquidity drain by the PBoC, as it also announced to conduct a Medium-term Lending Facility on November 16th with the amount to be determined by market demand. Finally, 10yr JGBs traded positive as they tracked upside in T-notes and following a break of the psychological 152.00 level, while the BoJ were also present in the market today in which it upped purchase amounts in 1-3yr and 3-5yr maturities as it had previously flagged.

PBoC injected CNY 30bln via 7-day reverse repos for a net daily drain of CNY 110bln, while it is to conduct a Medium-term Lending Facility operation on November 16th with the amount to be determined by market demand. (Newswires) PBoC set USD/CNY mid-point at 6.6895 vs. Exp. 6.6933 (Prev. 6.6771)

HKEX (388 HK) said it will introduce futures and options contracts based on the Hang Seng Tech index on November 23rd and January 18th respectively. (Newswires)

Ant Group's IPO could be delayed by at least 6-month and then with its value sharply reduced, FT citing sources; noting the key matter is the new regulatory changes around a prospectus which would impact their lending business. (FT)

Central Banks

BoE: Asset purchase programme GBP 895bln vs. Exp. GBP 845bln (Prev. GBP 745bln), QE Gilts GBP 875bln vs. Exp. GBP 825bln (Prev. GBP 725bln). Rates unchanged at 0.10% as expected. (Link to newsquawk headline & analysis)

-        All restrictions announced up to and including 31 October have been reflected in the Committee’s judgements. Beyond 2021 Q1, restrictions are assumed to be loosened.

-        Risks to the near-term outlook for activity are judged to be skewed to the downside. The skew is somewhat smaller than was judged to be the case in August, however, as recent developments are consistent with some of the downside risks previously identified materialising.

-        Participants attach some weight to the possibility of a negative bank rate

-        GDP: 2020 -11% (Prev. -9.5%), 2021 7.25% (Prev. 9.0%), 2022 6.25% (Prev. 3.5%), 2023 1.75%; GDP does not exceed its level in 2019 Q4 until 2022 Q1 (Prev. end-2021).

-        CPI: 2020 0.5% (Prev. 0.25%), 2021 2.0% (Prev. 1.75%), 2022 2.0% (Prev. 2.0%), 2023 2.0%

-        Unemployment: 2020 6.25% (Prev 7.5%), 2021 6.75% (Prev. 6.0%), 2022 5.0% (Prev. 4.5%), 2023 4.25%

BoE Governor Bailey: have not said anything about negative rates today and will not be putting a timeline on negative rates; on Brexit, says talks are continuing so it is right to base forecasts on assumption of a deal.

Norges Bank leaves its rate unchanged 0.0%, as expected; the sharp economic downturn and considerable uncertainty surrounding the outlook suggest keeping the policy rate on hold until there are clear signs that economic conditions are normalising. (Link to newsquawk headline & analysis)

-        Increased Covid-19 infection rates and more containment measures abroad and in Norway will likely put a brake on the upswing in the coming period.

-        So far, economic developments have largely been in line with the projections in the September Report; Oil prices have declined and are lower than in September.

UK/EU

EU negotiators have cleared the key Recovery Fund hurdle, with an agreement on the Rule of Law reached, according to a spokesperson. (Newswires)

UK Chancellor Sunak is expected to confirm that furloughed workers will get 80% of their wages as long as their businesses have been mandated to shut. (Telegraph)

EU diplomat noted a no-deal outcome still cannot be excluded given the situation, while reports added it is up to UK PM Johnson whether and how he wishes to move forward when Brexit talks recommence, with the next few days critical as both sides reflect whether they wanted a deal and what compromises are necessary. (FT)

European Commission says the 2021 economic recovery for the Eurozone will be 4.2% (smaller than previously expected) following a 2020 recession of 7.8%. (Newswires) (Link to full headline)

EQUITIES

Another session of gains for Europe (Euro Stoxx 50 +1.2%) after the region picked up the baton from a stellar APAC session in continuation of price action seen throughout the prior day whilst the US presidency hangs in the balance. In terms of where we stand, Biden’s on 264 electoral colleges vs. Trump’s 214 (assuming the Arizona tally is included), with 270 needed for a victory. Several key states remain to be called including Georgia (16 EC votes), Pennsylvania (20 EC votes), North Carolina (15 EC votes) and Nevada (6 EC votes). For Trump to win, he would need to pick up all of the remaining swing seats. Meanwhile, the latest implied probability from betting odds on Betfair Exchange are suggesting an 84% chance of a Biden win. That being said, legal challenges/calls for recounts are expected from Trump. Major US equity futures trade firmer, with ES (+1.9%) above 3,500, NQ (+2.9%), YM (+1.3%), RTY(+1.3%) all in solid positive territory. Back to Europe, additional impetus could be derived by EU negotiators clearing the Rule of Law issue, a major hurdle in the passing of the EU Recovery Fund. However, the legal jargon still has to be agreed between the European Parliament and Council, with reports stating that differences remain over the exact size of the budget and support. Major EU bouses see broad-based gains of around 1.1-1.2%, whilst the UK’s FTSE 100 (+0.4%) sees modest underperformance in Sterling-dynamics post-BoE. Sectors are mostly higher with the IT sector outpacing peers following earnings from Qualcomm (+15% pre-market) who posted beats across the board, thus propping up the likes of STMicroelectronics (+3.2%), Infineon (+3.7%) and Dialog Semiconductor (+6.5%), with the latter experiencing added impetus from its respective earnings report. Meanwhile, the banking sector resides as the laggard, with ING (-6.8%) and Commerzbank (-6.6%) dragging down the sector post-earnings, although SocGen (+4.0%) bucks the trend after narrowing its cost of risk and upping its CET1 ratio guidance. In terms of individual movers, AstraZeneca (Unch) whose earnings were sullied by reports that the Co. fell short of its target to deliver 30mln doses of its COVID-19 vaccine to the UK by the end of September and will only be able to supply only 4% of what it promised by year end, according to reports citing the head of government vaccine taskforce. However, the Co. reportedly stated it is ready to supply hundreds of millions of COVID-19 vaccines and weekly delivery schedule of vaccines will roughly match what the UK Gov’t has in mind for vaccination plans.

FX

USD - The Dollar is weaker in relation to most major rivals in the run up to the FOMC and doubtless anticipating dovish guidance from the Fed and Chair Powell, but no action in terms of policy stimulus. However, the DXY is hovering around 93.000 within a softer 93.548-92.897 range awaiting the climax of the US Presidential Election that looks increasingly likely to see Republican Biden replace Democrat Trump, albeit with a gentle Blue ripple rather than the tidal wave prophesied by polls. Also ahead, another pre-NFP gauge in the form of Challenger lay-offs and the more timely IJC updates, but all unlikely to steer attention away from the FOMC and casting votes in the 2020 ballot.

EUR/NZD/AUD/GBP - All in the running to claim top G10 spot as the Euro eyes a series of recent highs capping advances beyond 1.1800, including the pre-ECB peak, while the Kiwi has caught up with its Antipodean peer on the way to reclaiming 0.6700+ status vs the Greenback, with Aud/Nzd retreating from the high 1.0700 area to test bids/support around the figure and the Aussie meeting resistance above 0.7200 against the Buck in wake of mixed trade data overnight. Elsewhere, Sterling has rebounded firmly from pre-BoE lows as the MPC continues to keep NIRP cards close to its chest and Governor Bailey added that there is no timetable for the use of negative rates, if sub-zero is adopted at all presumably. Hence, Cable is back above 1.3000 and Eur/Gbp below 0.9050 even though the UK construction and composite PMIs slowed.

CHF/JPY - The Franc has pared more losses vs the Dollar through 0.9100 and is pivoting 1.0700 against the Euro before a very topical SNB event entitled how to steer rates in negative territory hosted my Maechler and Moser, while the Yen is consolidating above 104.50 in advance of a raft of Japanese data and well away from option expiries in Usd/Jpy plus Eur/Jpy at 105.00 (1 bn) and 124.50 (1.1 bn) respectively.

CAD/SEK - No breach of 1.3100 yet for the Loonie vs its US counterpart and perhaps little inclination so close to Friday’s Canadian-US jobs report face-off, while the Swedish Crown is straddling 10.3000 in Euro cross terms following somewhat conflicting data (new orders down in September, Q3 GDP up q/q, but negative y/y).

NOK/EM - The Norwegian Krona has not been knocked by the Norges Bank’s downbeat assessment and outlook for the economy as it holds comfortably above 11.0000 vs the Euro, while the Yuan has rallied sharply from PBoC fix levels to register another multi-year peak vs the Greenback close to 6.6100 (Cnh vs Cny circa 6.6235 at one stage).

Australian Trade Balance (AUD)(Aug) 5.6B vs. Exp. 4.5B (Prev. 4.6B). (Newswires) Australian Exports (Sep) M/M 4% (Prev. -4%) Australian Imports (Sep) M/M -6% (Prev. 2%)

FIXED INCOME

Well that didn’t last long in terms of a rally in Gilts on the back of BoE fireworks via its APF, as the 10 year debt future erases all and more of its 42 tick advance to trade below par (-22 ticks on the day and not far from 136.00). However, Italian bonds are rocketing towards 151.00 having surpassed recent highs and the contract peak amidst bullish risk sentiment, with extra incentive after reports that the Rule of Law hurdle has been overcome to unleash Recovery Fund grants and loans, and perhaps some bulls front-running more QE from the ECB in December. Elsewhere, Bunds and US Treasuries are also fizzling after reaching 176.65 and 139-08+ respectively to trade at 176.31 (-9 ticks vs +1/4 point at best) and near 139-00 ahead of a busy pm agenda that culminates in the FOMC and post-meeting presser from Fed chair Powell.

COMMODITIES

WTI and Brent front month futures see modest losses on the day, albeit the contracts are off worst levels and in proximity to the unchanged mark, as the crude complex takes a breather from recent price action as the US election vote count enters the final stretch. Reports noted that oil traders added to bearish bets on WTI yesterday on the prospect of a Biden, and thus a pursuit of cleaner energy and his agenda to tackle global warming. Aside from that, news flow has remained light for the complex and price action is likely to be dictated by macro updates barring OPEC+ sources/comments. WTI resides around USD 39/bbl (vs. low 38.27/bbl), while its Brent counterpart sees itself north of USD 41/bbl (vs. low 40.33/bbl). Elsewhere, spot gold and silver are underpinned by the softer Buck, with the yellow metal edging higher above USD 1900/oz (vs. low 1902.50) and silver eyeing USD 24.50/oz to the upside (vs. low 23.88). Conversely, LME copper sees modest losses amidst thin trade for the red metal as the red metal eyeing the Chinese ban of imported copper ore and copper concentrates from Australia. Meanwhile, Dalian and Singapore iron ore prices fell amid speculation exports from Australia picked up last month.