• Value outperforming growth once again (RTY +1.0%/NQ +0.5%) while European bourses are off highs as this price action emerges in Europe as well
• US President-elect Biden is poised to speak today on plans for a post-COVID economic recovery and longer-term growth, tentatively scheduled for 13:45EST/18:45GMT
• US President Trump reportedly plans a last-minute crackdown on China and will enact a series of hard-line policies in his final weeks, according to senior administration officials
• EU Officials caution of a crisis if Hungary/Poland vetoes the EU budget/recovery fund; amid reports of vetos due to rule of law issues
• FX sees the DXY modestly firmer as GBP waned on downbeat Brexit newsflow as safe-havens give up earlier gains as sentiment improves
• Looking ahead highlights include US NY Fed Manufacturing; RBA’s Lowe, Fed’s Clarida & Daly, ECB’s Lagarde & Mersch & President-elect Biden

US ELECTION UPDATE

US President-elect Biden and VP-elect Harris are poised to speak today on their plans for a post-COVID economic recovery and longer-term growth. The remarks are tentatively scheduled for 13:45EST/18:45GMT. (Newswires)

US President Trump tweeted in which he suggested that Biden only won in the eyes of the fake news media and that he concedes nothing, while he added we have a long way to go and that it was a rigged election. President Trump also noted that many cases being filed across the country are not ours but rather those of people that have seen horrible abuses and our big cases that show the unconstitutionality of the election and outrage of actions to change the outcome, will soon be filed. Furthermore, he questioned why does the fake news media continuously assume Biden will ascend to the Presidency and not even allowing our side to show which we are just getting ready to do, while he suggested the Constitution was badly shattered and violated from the election. (Twitter)

A legal adviser to the Biden campaign said Georgia counties that counted votes have shifted totals ‘almost imperceptibly’ in favour of Biden and that there is no reason to believe widespread irregularities were found in Georgia. (Newswires)

CORONAVIRUS UPDATE

US COVID-19 cases +155,708 (prev. +181,801) and deaths +1,252 (prev. +1,364). (Newswires) New York Governor Cuomo announced an emergency summit meeting on Friday between the Governors of six north-eastern states amid COVID-19 case spikes, while he sees the situation getting worse over the coming weeks and stated we believe we’re going to have to be taking additional steps. California, Oregon, and Washington issued an advisory on Friday urging the public to avoid all non-essential out-of-state travel amid rising COVID-19. It was also reported that Oregon Governor Brown ordered a two-week 'freeze' for the entire state starting November 18 in which restaurants and bars will be limited to take-out only and recreational facilities and venues that host indoor or outdoor events will be closed. Furthermore, New Mexico Governor announced that citizens will have to "shelter-in-place" from November 16th-30th in which all non-essential businesses and non-profits must stop in-person activities, while Washington state Governor Inslee announced new restrictions for residents and businesses to address the infection rates. (Newswires/ABC News/KGW Sunrise)

US President Trump said the vaccine will be available for the entire population as soon as April and the US will not deliver vaccine to New York state until the administration has approved to do so, while he expects Pfizer (PFE) EUA very soon and stated that the administration will not go into a lockdown under any circumstances. (Newswires)

US President-elect Biden’s incoming Chief of Staff said the Biden transition team has not yet been authorized to work with the current administration on COVID-19 efforts and that Biden spoke with Democrat congressional leaders Pelosi and Schumer about the urgent need for COVID-19 relief. (Newswires)

America’s top infectious disease experts have ruled out a national lockdown, whilst NIH’s Fauci said it would fall to local and regional leaders to instigation mitigation measures, even under a Biden administration. (Times)

US Operation Warp Speed Chief Slaoui reiterated that they are hopeful for another positive vaccine update from Moderna (MRNA) this week given the similar technology to Pfizer (PFE) and noted that if front running vaccines are approved via EUA, the vaccine could be available to those who need it in December. (Newswires)

Johnson & Johnson (JNJ) initiated the second global Phase 3 clinical trial of the Janssen COVID-19 vaccine candidate in UK in which it will recruit 6,000 people for a 12-month trial. There were separate reports that HHS and Johnson & Johnson are to expand agreement to support next phase of COVID-19 vaccine research and development. (Newswires)

UK COVID-19 cases +24,962 (prev. +26,860) and deaths +168 (prev.+462), while France cases +27,228 (prev. +32,095) and deaths +302 (prev. +359). (Newswires)

UK PM Johnson was notified by NHS Track and Trace that he is required to self-isolate after contact with a person that tested positive for COVID-19, while Downing Street stated that the PM is well and does not have any symptoms. (Newswires)

French PM Castex stated that they are working on a COVID-19 strategy which will be in place until next summer, as the nation needs to adopt long-term rules to live with the virus until a vaccine is found. (Le Monde)

Austria announced a lockdown from Tuesday through to December 5th which will include closing of non-essential shops and will require the public to stay-at-home with specific exceptions. (Newswires)

German Chancellor Merkel is to meet with the heads of the country’s states today and are considering stricter measures to tackle the rising COVID-19 infection including reducing the number of allowed in household gatherings and compulsory wearing masks for students. Subsequent reports indicate December restrictions will be decided on next week. (Newswires)

Japan's Miyagi prefecture may declare its own state of emergency regarding the virus, while reports also noted that Hokkaido and Sapporo chiefs are to hold emergency talks regarding the virus. (Newswires)

BioNTech (BNTX) - Co. and Fosun Pharma have received approval to start COVID-19 vaccine candidate BNT162B2 trials in China. (Newswires)

ASIA

Asian bourses kickstarted the week on the front foot and US equity futures extended on last Friday’s gains on Wall St, where all major US bourses notched respectable gains and the S&P 500 posted a fresh record close with the upside led by the resurgence in cyclicals. ASX 200 (+1.2%) and Nikkei 225 (+2.0%) were positive as energy and financials in Australia mirrored the recent outperformance of the sectors stateside but with markets halted in the ASX within the first hour of trade due to a data-related issue, while the Japanese benchmark extended on its best levels in nearly 3 decades after stronger than expected GDP data for Q3 which showed the widest expansion in the economy since comparable data was available in 1980. Furthermore, the region was also boosted by the recent signing of the Regional Comprehensive Economic Partnership (RCEP) trade pact involving 15 countries for the world’s largest trade bloc with members accounting for nearly a third of the global population and around 30% of global GDP, while the latest Chinese activity data added to the tailwinds after Industrial Production topped estimates and although Retail Sales missed, it still showed an improvement in growth from the prior month. Hang Seng (+0.9%) and Shanghai Comp. (+1.1%) were supported by the data and PBoC announcement of a CNY 800bln 1-year Medium-term Lending Facility operation, but with gains capped on uncertainty as reports suggested US President Trump plans a last-minute crackdown on China and will enact a series of hard-line policies in his final weeks. The announcement of a rejig to the Hang Seng Index also provided a catalyst for price action with the index to be increased to 52 constituents from the current 50 which saw Anta Sports, Budweiser APAC and Meituan Dianping benefit from their inclusion to the index and Swire Pacific shares suffered on their expulsion, effective December 7th. Finally, 10yr JGBs were flat amid similar uneventful trade in T-notes and with prices hampered by the broad appetite for riskier assets, as well as weaker demand at the enhanced liquidity auction for longer-dated JGBs.

PBoC skipped reverse repos but conducted CNY 800bln 1yr MLF operation with rate maintained at 2.95%. (Newswires) PBoC set USD/CNY mid-point at 6.6048 vs. Exp. 6.6058 (Prev. 6.6285)

China and 14 other countries agreed to set up the world’s largest trading bloc in which they virtually signed Regional Comprehensive Economic Partnership on Sunday. (Newswires)

US President Trump reportedly plans a last-minute crackdown on China and will enact a series of hard-line policies in his final weeks, according to senior administration officials. Trump officials plan to sanction or restrict trade with more Chinese companies, government entities and officials for alleged complicity in human rights violations, or threatening U.S. national security. US officials added not to expect substantial new moves on Taiwan or the closure of Chinese consulates. (Axios)

China said it firmly opposes US actions regarding restricting investments in firms linked to the Chinese military and stated the US should stop unreasonable suppression of Chinese firms. (Newswires)

Central Military Commission in China released an outline on improving joint combat capabilities of the People's Liberation Army, which is aimed at war preparedness amid increased risk of military conflicts in certain regions including South China Sea, Taiwan Strait and China-India border. (Global Times)

US government provided Qualcomm a license to permit sales of 4G mobile phone chips to Huawei Technologies. (Newswires)

Chinese Industrial Production (Oct) Y/Y 6.9% vs. Exp. 6.5% (Prev. 6.9%). (Newswires) Chinese Retail Sales (Oct) Y/Y 4.3% vs. Exp. 4.9% (Prev. 3.3%) Chinese House Prices (Oct) Y/Y 4.3% (Prev. 4.6%)

Japanese GDP (Q3) Q/Q 5.0% vs. Exp. 4.4% (Prev. -7.9%, Rev. -8.2%). (Newswires) Japanese GDP Annualised (Q3) 21.4% vs. Exp. 18.9% (Prev. -28.1%, Rev. -28.8%)

UK/EU

UK PM Johnson is expected to announce in the upcoming week the implementation requiring all new cars sold must be electric in 2030 (which was brought forward to 2035 from 2040 in February). There were also separate reports that Chancellor Sunak is mulling plans to charge motorists for using roads amid concerns of a GBP 40bln tax shortfall related to switch to electric cars. (Newswires/Times)

UK government reportedly launched a crackdown on tax avoidance by multinationals that lower their tax bills by shifting moving profits to other countries, in which the HMRC warned it could conduct investigations and impose substantial fines. (FT)

UK Brexit Negotiator Frost stated that there has been progress in a positive direction in recent days and we now largely have a common draft treaty text although significant elements have not yet been agreed, while he added we will build on these and get an overall agreement if we can, but may not succeed. (Newswires)

UK Environment Secretary Eustice said the government will be bringing the Internal Market Bill back and that both sides must focus on getting a free trade deal so measures for Northern Ireland will not be necessary, while he added that there is still “some way” between UK and EU on fishing and the “time is very, very short” to reach an agreement. Furthermore, he stated they can always squeeze out additional time if nearly there, but things must move this week. (Newswires)

EU sources noted there was less progress in recent days on outstanding Brexit sticking points than they had hoped for and that the moment of truth was approaching, while UK sources said that big gaps remained between the sides. Furthermore, both sides were doubtful that a draft agreement could be reached in the coming days. (BBC/Twitter)

EU diplomats note that progress has been made in drafting a legal text; but no mutually acceptable solutions on key sticking points fisheries, governance and level playing field. (Newswires)

Irish Foreign Minister Coveney stated that a deal is very difficult but very doable and that we won’t get a deal if the UK imposes the Internal Market Bill, while he added the sides are very far apart on fishing and that time is running out and talks must be resolved in principle this week. Subsequently, said fishing negotiations are not in a good place, in the same place as mid-Summer with only minor concessions discussed. (Newswires)

Senior EU Official says if there is a Hungarian veto of the EU 2021-27 budget there will be a crisis; not yet received any signal as to whether Poland would support the budget or not. (Newswires)

EU regulators are reportedly seeking a solution regarding post-Brexit derivative trades as overlapping regulations risk EU banks' branches in London having to route derivatives trades to NYC, while reports added that officials are working on adjustments to rules in the event the UK and EU block full access to each other’s financial services. (FT)

Fitch affirmed France at 'AA'; Outlook Negative and affirmed Austria at AA+; Outlook Stable. S&P affirmed Israel at AA; Outlook Stable and affirmed Iceland at A; Outlook Stable, while DBRS cut UK to AA; outlook stable. (Newswires

UK Rightmove House Price Index (Oct) M/M -0.5% (Prev. 1.1%). (Newswires) UK Rightmove House Price Index (Oct) Y/Y 6.5% (Prev. 5.5%)

GEOPOLITICAL

Turkish President Erdogan said Turkey and Northern Cyprus will no longer tolerate diplomatic ‘games’ regarding the rights to offshore resources in the eastern Mediterranean and he called for a two-state solution in Cyprus, while Cyprus stated that President Erdogan’s visit was provocative and illegal. (Newswires)

Azerbaijan news agency notes the reports of Turkey sending troops to Azerbaijan would be in-line with strategic co-operation agreements. (Newswires)

EQUITIES

Major European bourses trade mostly higher (Euro Stoxx 50 +0.8%) after picking up the bullish APAC baton, as the resurgence of State-side and APAC cyclicals reverberated into the region at the cash open – although in recent trade, the growth to value rotation seems to have garnered some traction (ahead of Moderna’s COVID-19 vaccine update this week) following the pause at the back-end of last week, with ES (+0.8%) and RTY (+1.1%) overtaking the NQ (+0.6%) which briefly gave up its 12,000 status. This has also become evident in European sectors, with Banks, Basic Resource, Travel & Leisure, Autos, Oil & Gas topping the charts, whilst Healthcare, Consumer Staples and Utilities lag and Tech inching lower towards the bottom of the spectrum after a firm open. The banking sectors has also been bolstered by BBVA (+15%) whose shares sky-rocketed some 20% at the open amid reports PNC is in advanced discussions regarding the acquisition of BBVA’s US operations in a USD 11bln transaction, subsequently underpinning the IBEX 35 (+2.0%). Meanwhile, the sub-par performance in Healthcare keeps the SMI (-0.1%) underwater. Elsewhere, Vodafone (+3.4%) holds onto gains despite overall downbeat earnings as the group is reportedly looking to raise USD 5bln in an IPO of their towers unit next year, according to sources.

JD.Com Inc (JD) Q3 20 (USD): EPS 0.50 (exp. 0.40), Revenue 25.70 (exp. 25.68bln).

FX

USD - Nowhere near as pronounced as last Monday when the Pfizer/BioNTech results broke and really boosted sentiment, but nevertheless the risk environment is positive. Hence, the DXY is choppy around 92.500, with last week’s low (92.129) the only real ‘support’ ahead of 92.000 unless the market mood changes dramatically. Ahead, only NY Fed manufacturing before a couple of Fed speakers on a relatively quiet start to the week in terms of scheduled data and events.

NZD/AUD/NOK - The main beneficiaries of risk appetite as the Kiwi eyes 0.6900 and Aussie retests 0.7300 in wake of upbeat comments from RBA Governor Lowe on the economy that could rebound rapidly on more good news regarding the recovery from latest COVID-19 outbreaks and in advance of a speech from Kent tonight. Meanwhile, the Norwegian Crown is riding on the crest of firmer oil prices along with the trade balance returning to surplus from deficit, as Eur/Nok retreats through 10.8000.

EUR/CAD/JPY/GBP/CHF - Also firmer vs their US counterpart, with the Euro probing 1.1850 and untethered by option expiries, the Loonie firming beyond 1.3100 against the backdrop of rising crude and awaiting Canadian manufacturing sales, while the Yen pivots 104.50 following firmer than forecast Japanese Q3 GDP. Elsewhere, the Pound straddles 1.3200 ahead of the next round of Brexit trade talks as EU diplomats note progress in drafting a legal text, but still no mutually acceptable solutions on the key sticking points (fisheries, governance and level playing field) and the Franc is lagging near 0.9100 as Swiss sight deposits reveal a hefty increase in domestic bank balances.

EM - Broad gains vs the Dollar, as the Cnh extends off a firmer PBoC Cny midpoint fix amidst somewhat mixed Chinese data and a 12 month MLF injection to compliment Sunday’s RCEP. However, the Try has lost recovery momentum in the run up to Thursday’s CBRT policy meeting after reports that Turkey has submitted a Presidential motion to send troops to Azerbaijan.

Notable FX Expiries, NY Cut:

-        USD/JPY: 104.45 (400M), 104.70-75 (800M), 105.00 (1BLN)

-        EUR/JPY: 123.00 (1.25BLN)

RBA Governor Lowe says we are on the road to an economic recovery, now is not the time for higher-rates, could see a rapid rebound if we get further good news on the health-side reiterates that negative rates are extraordinarily unlikely in Australia; would only consider negative rates if all major central banks adopted the same policy. (Newswires)

FIXED INCOME

Bunds and Eurozone debt peers remain on the front foot and outpacing peers with only a cursory acknowledgement to the fact that risk sentiment is constructive, albeit far less rampant than it was at the same stage last week when vaccine hopes were stoked by positive clinical results. The core 10 year bond has been up to 175.29 (+35 ticks), but not convincingly through Fib resistance, while Gilts faded into 135.00 again, this time at 134.94 (+19 ticks and 2 ticks shy of last Friday’s Liffe best) and the T-note is holding nearer the top of a 138-08-138-06+ overnight range. Ahead, plenty more from the global Central Bank ranks, NY Fed manufacturing and Canadian manufacturing sales before the latest weekly updates on the ECB’s APP and PEPP activity.

Saudi Aramco has reportedly hired banks for a potential Dollar bond offering. (Newswires)

China has mandated banks for new multi-tranche Euro-bonds according to a document. (Newswires)

COMMODITIES

WTI and Brent front-month futures see respectable gains in early European hours as prices drifted higher in APAC trade on account of the overall risk-positive sentiment across markets, and ahead of the key JMMC meeting tomorrow which will lay the groundwork for the all-important OPEC/OPEC+ meeting at month-end. The committee (composed of Saudi, Russia, Iraq, UAE, Kuwait, Nigeria, Algeria, Venezuela and Kazakhstan) will track compliance among members and review secondary source data alongside current market fundamentals before proposing policy recommendations – thus no policy decision will be taken at this meeting. Consensus prior the Pfizer/BioNTech COVID-19 vaccine update was tilted towards OPEC+ extending current production levels through Q1 2021 vs. an output cut rollback to 5.7mln BPD from 7.7mln BPD in January under the pact. However, there has also been chatter of deeper output curbs, with recent sources noting that talks between OPEC and allies are closing in on a delay of three-to-six months, whilst deeper cuts have not garnered supported so far from other members – with unanimous consent needed for any revision to the pact. Note: today sees the Joint Technical Meeting (JTC) where a drip feed of early source reports cannot be dismissed. WTI Dec and Brent Jan have been waning off highs in recent trade after posting peaks at USD 41.24/bbl (vs. low 40.15/bbl) and 43.80/bbl (vs. low 42.71/bbl) respectively in a move coinciding with a pullback in sentiment. Elsewhere, spot gold and silver trade in lockstep with the Buck awaiting the next fundamental catalyst, with the former coming close to the USD 1900/oz in APAC trade, whilst the latter meanders on either side of USD 25/oz. Meanwhile, LME copper coattails on the APAC outperformance in the red metal, with prices getting a boost by the stronger than expected Chinese Industrial Production data and softer Dollar.

China is reportedly to begin a large oil and gas project in the South China Sea after recently building the world’s largest oil and gas storage platform. (Asia Times Financial)