• European indices have posted mixed performance with US futures modestly positive though RTY -0.2% lags slightly with overall magnitudes relatively contained
• DXY has continued to drift but remains above the YTD low of 91.740, with major peers generally firmer but with limited conviction in thin liquidity; though GBP was impacted in a delayed reaction to Barnier remarks
• EU Chief Brexit Negotiator Barnier says he is travelling to London this evening to continue discussions with UK Counterpart Frost; same differences persist on the 3-controversial issues - unless London takes decisive action quickly a deal will be all but impossible
• US President Trump stated that COVID-19 vaccine delivery will start next week
• Saudi Arabia and Russia have invited heads of delegations of JMMC to hold informal consultations on Saturday at 13:00GMT
• The desk will operate a normal service on Friday 27th November until 18:45GMT/13:45EST, upon which the desk will close given the US market closures

NOTABLE THANKSGIVING UPDATES

ECB Minutes: While there was wide agreement on the need to signal policy recalibration in December, it was cautioned that the Governing Council should not pre-commit itself to specific policy actions. PEPP and TLTROs have proven effective thus far. Double dip recession in some areas could not be excluded as a possibility. Link to full headline

ECB Chief Economist Lane says PEPP and the easing of conditions under the TLTRO programme have been the two cornerstones of our monetary policy response. (Newswires) Link to full headline

Riksbank leaves it Repo Rate unchanged at 0.00% as expected, Riksbank expands and extends asset purchases to SEK 700bln from SEK 500bln up to 31 December 2021 (Prev. H1-2021); Bremen and Floden dissented on the asset purchase decision. Link to Newsquawk headline & analysis

Foxconn (2317 TW) is moving some iPad & MacBook assembly to Vietnam from China at the request of Apple (AAPL), according to sources; plan is for assembly lines to come online in H1-2021. (Newswires)

EU Drug Regulator expects application for conditional marketing approval for COVID-19 vaccine in the coming days; collaborating with international regulators on the vaccine approval process, may not be possible to synchronise any decision-making. (Newswires)

CORONAVIRUS UPDATE

US coronavirus cases rose by at least 103,628 to a total of 12.88mln and deaths rose by at least 1,251 to a total of 263.4k, according to a major newswire tally. (Newswires)

US President Trump stated that COVID-19 vaccine delivery will start next week. (Newswires)

WHO’s Ryan commented that it is very possible we can return to some sort of normality next year through addition of vaccines. (Newswires)

UK PM Johnson said he is encouraged by recent data, but a new year national lockdown could be seen if regional restrictions do not work. (Newswires)

The AstraZeneca/Oxford University vaccine is set to undergo a new global trial to appease critics questioning the claim that the vaccine can protect up to 90% of people against COVID-19. (Guardian) Separately, it was reported that the UK government asked MHRA regulator to assess Oxford University/AstraZeneca COVID-19 vaccine candidate for temporary supply, according to the Health Ministry. (Telegraph) Note, the retrial of the drug is said to not impact the regulatory approval in the UK. Additionally, Developers of the Sputnik V COVID-19 vaccine said on Thursday that AstraZeneca should try combining its experimental shot with the Russian one to boost efficacy. (Newswires)

ASIA

Asian equity markets were mixed as trade continued to lack firm direction following the holiday closure in US for Thanksgiving and lull seen across European counterparts. ASX 200 (-0.5%) was pressured amid further deterioration of Australia’s trade ties with China after the latter announced to collect anti-dumping deposits on Australia wine of around 107%-212% from Saturday which saw double-digit losses in Treasury Wine Estate before it was temporarily halted pending further announcement. The Australian coal blockage situation off Chinese ports also further deteriorated as 82 ships were now involved carrying a total value of AUD 1.1bln, with the ongoing spat overshadowing the encouraging COVID-19 development in which Victoria state reached the threshold for total elimination of the virus after 28 days of zero cases. Nikkei 225 (+0.4%) swung between gains and losses as hopes regarding an extension of COVID-19 relief measures were counterbalanced by the pressure from currency inflows, while there was plenty of attention on Tokyo Dome whose shares were untraded with a glut of buy orders at the daily upper limit after reports Mitsui Fudosan is planning to make a tender offer. Hang Seng (+0.3%) and Shanghai Comp. (+1.1%) conformed to indecision but with the mainland kept afloat after the PBoC’s tepid liquidity operations resulted to a net weekly injection of CNY 130bln and with Chinese Industrial Profits surging 28.2% Y/Y. Finally, 10yr JGBs were subdued amid the lack of firm direction across overnight markets and after mixed results at today’s 2yr JGB auction which showed a weaker b/c.

PBoC injected CNY 120bln via 7-day reverse repos at a rate of 2.20% for a net weekly injection of CNY 130bln and announced CNY 5.0bln 3-month central bank bill swap. PBoC set USD/CNY mid-point at 6.5755 vs. Exp. 6.5739 (Prev. 6.5780)

• Chinese Industrial Profits (Oct) Y/Y 28.2% (Prev. 10.1%). (Newswires)
• Chinese Industrial Profits YTD (Oct) Y/Y 0.7% (Prev. -2.4%)

China is reportedly to collect anti-dumping deposits on Australian wine from November 28th equal to around 107%-212.1%, while Australia government later responded that it was extremely disappointed by the tariffs and will vigorously fight the tariffs. (Newswires)

Japan's ruling LDP is to urge the government to expand and create new state-backed loan and loan guarantee schemes to support COVID-stricken firms, while it also calls for an extension of zero-interest loan scheme to March and steps to promote EV and battery development. It was later reported that Japan will extend the compensation scheme until February for firms impacted by COVID-19 which retain jobs and was to expire in December. (Newswires)

• Tokyo CPI (Nov) Y/Y -0.7% vs. Exp. -0.5% (Prev. -0.3%); largest decline since May 2012. (Newswires)
• Tokyo CPI Ex. Fresh Food (Nov) Y/Y -0.7% vs. Exp. -0.7% (Prev. -0.5%)
• Tokyo CPI Ex. Fresh Food & Energy (Nov) Y/Y -0.2% vs. Exp. -0.2% (Prev. -0.2%)

US

NY Fed said FX swaps with foreign central banks totalled USD 1.56bln in the latest week with swaps with the SNB at USD 1.21bln and swaps ECB at USD 150mln. (Newswires)

ELECTION UPDATE

US President Trump said he will travel to Georgia next week to campaign for Republican Senate candidates and commented that conceding is going to be a very hard thing to do, while he stated if electoral college votes for Biden it would be a mistake, but he will leave the White House if it does. However. President Trump later tweeted that the primary point made in his press conference was that the 2020 election was rigged and that he won. (Newswires)

UK/EU

EU Chief Brexit Negotiator Barnier says he is traveling to London this evening to continue discussions with UK Counterpart Frost; will be briefing EU Member States & European Parliament today - same divergencies persist. Subsequently, envoys report this briefing was not a 'particularly bright picture'. Furthermore, the negotiator remarked that "Without London taking the necessary decisions quickly, reaching a deal will be all but impossible.", Express' Barnes (Twitter/Newswires)

There were initial reports that EU's chief negotiator Barnier called an "urgent" meeting of EU fisheries ministers for tomorrow, according to sources. However, an EU official later confirmed Barnier will speak to "some" EU fisheries ministers on Friday but stated talks are not "urgent" Subsequently, reports indicate the negotiator has called for a meeting with such ministers next Monday. (Newswires)

EU Chief Brexit Negotiator Barnier is now talking to EU ambassadors about the state of Brexit talks, one source tells me there is growing "exasperation" within European governments about the chances of a deal, Sky's Parsons; seperately, (Twitter)

No progress yet on the level-playing-field and fishing, still no 'white smoke', according to a Brexit source cited by Euronews' Murray; “Still very hard to say but I think we’ll go into next week and possibly even longer”. (Twitter)

UK said it will impose new competition regulations to prevent Google (GOOG) and Facebook (FB) from abusing market dominance. (Telegraph)

ECB's Panetta said there should be no doubt on inflation commitment and is open to a case-by-case resumption of bank dividends; on the subject, ECB's Villeroy sees arguments in favour of a 'cautious' retrurn to allowing banks to pay dividends. (Newswires)

EU Consumer Confidence Final (Nov) -17.6 vs. Exp. -17.6 (Prev. -17.6, Rev. -15.5)

• Economic Sentiment (Nov) 87.6 vs. Exp. 86.5 (Prev. 90.9, Rev. 91.1)
• Selling Price Expectations (Nov) 0.2 (Prev. 0.6, Rev. 0.7)
• Industrial Sentiment (Nov) -10.1 vs. Exp. -10.5 (Prev. -9.6, Rev. -9.2)
• Services Sentiment (Nov) -17.3 vs. Exp. -15.5 (Prev. -11.8, Rev. -12.1)
• Business Climate (Nov) -0.63 (Prev. -0.74, Rev. -0.73)

GEOPOLITICAL

North Korea is said to have attempted to hack South Korea's coronavirus vaccine producers, while it was also reported that North Korea advised overseas missions not to provoke the US, according to the South Korea spy agency. (Yonhap)

Saudi & UEA warplanes have launched a series of raids on positions in Yemen, AJA Breaking. (Twitter)

The Indian army says at least three Indian soldiers have been killed in a barrage of mortar shelling and gunfire by Pakistani soldiers along the highly militarized frontier Kashmir, AP reports. (Twitter)

EQUITIES

European majors have mostly drifted into positive territory (Euro Stoxx 50 +0.4%) following a lacklustre cash open, whilst the UK's FTSE 100 (-0.5%) remains the laggard as Brexit talks enter the final stretch, with EU's Chief Brexit negotiator Barnier out of isolation and headed to London for weekend talks; albeit, after giving EU27 a downbeat prognosis of the current state of talks. US futures have also been climbing off lows in tandem with EU futures on the holiday-shortened trading day with ES +0.2%, NQ +0.4% and RTY -0.2%. Sectors in Europe are mixed with no clear risk-profile - IT remains the top performer while Oil & Gas erased losses and now resides towards the top of the pile amid price action in the oil complex. Travel & Leisure fell and is now the laggard in what seems to be more of a retracement of the recent firm performance. In terms of individual movers, Banco Sabadell (-13%) plumbed the depths after the Co. terminated merger discussions with BBVA (+3%) as the parties did not achieve an agreement on the exchange ratio of both entities. AstraZeneca (-0.8%) is modestly softer as the AstraZeneca/Oxford University vaccine is set to undergo a new global trial to appease critics questioning the claim that the vaccine can protect up to 90% of people against COVID-19, however, this is not expected to impact regulatory approval in the UK. Finally, Indivior (-15%) shares slumped amid reports of a claim filed by Reckitt Benckiser (-0.9%) for GBP 1.07bln.

Alibaba (BABA) & Tencent (0700) have put talks to buy Baidu's stake in Iqiyi on hold, according to sources; reportedly 'balked' at the valuation of USD 20bln and regulatory headwinds. (Newswires)

FX

NZD/AUD - The Kiwi is just edging its Antipodean peer in first place among G10 majors, and fittingly perhaps with assistance from the NZ Treasury noting that the strong recovery in Q3 consumption will provide an upside skew to forecasts for overall growth in the quarter. Hence, Nzd/Usd is establishing a firmer base above 0.7000 and Aud/Nzd appears anchored to 1.0500 even though the Aussie is benefiting from ongoing Greenback weakness to inch closer to 0.7400 irrespective of yet more China trade angst as Beijing aims extortionate anti-dumping deposits on wine imports after finding fault with the environmental quality of coal. On a brighter note, Australia’s underlying cash deficit for the 4 months to October was narrower than expected.

JPY/CAD/EUR/GBP - Also firmer vs the Buck as the Yen probes 104.00, Loonie 1.3000 regardless of a downturn in crude prices and dovish comments from BoC Governor Macklem, Euro retains grasp of the 1.1900 handle and Sterling straddles 1.3350. However, Eur/Usd remains capped ahead of 1.1950 amidst ongoing Polish and Hungarian objections to the EU Budget and Rescue Fund, while Cable is hampered and Eur/Gbp propped over 0.8900 on the back of Brexit uncertainty as UK-EU trade talks continue to draw a blank on the main outstanding irreconcilable issues. Indeed, Brussels is said to be growing exasperated and chief negotiator Barnier’s latest update to envoys was described as not that bright before he returns to London for further face-to-face discussions.

CHF/DXY - The Franc is lagging somewhat, albeit still firmly beyond 0.9100 as the Dollar underperforms more broadly and index struggles to keep sight of 92.000 within a 92.053-91.868 range. Month-end factors are stacked against the Greenback and the lack of US participation as many extend their Thanksgiving holiday into the weekend leaves the DXY prone and only just holding off its 2020 low (91.740).

SCANDI/EM - Mixed trade as the aforementioned retracement in oil offsets some positives for the Nok via firm retail sales and official labour data also eclipsing estimates for a more pronounced rise, while Swedish Q3 GDP also beat consensus, but largely irrelevant given yesterday’s Riksbank QE extension and expansion to leave the Sek lagging. Conversely, cheaper crude has helped the Try get over any concerns raised by the CBRT revising bank reserve ratio requirements and the regulator raising its FX and Gold holding estimates as a result, while the Cnh and Cny have been cushioned by a net weekly PBoC liquidity injection and Chinese industrial profits jumping 28.2% y/y. Elsewhere, the Brl will return to reflect and digest comments from Brazil’s Treasury Secretary stressing the need to tighten the fiscal reins and observe discipline in order to bring down long term rates.

BoC Governor Macklem said vaccine news has been encouraging but they still project the economy will be operating below potential into 2023 and the economy will still require extraordinary monetary policy support as it recuperates. Macklem stated that borrowing costs are to remain very low for a long time and the Bank has committed to stop buying government bonds when recovery is well underway and most likely before inflation reaches 2% target. However, he added that there is a lot more room to purchase more government debt and do have capacity to do more if required, while negative rates are in the toolkit but they would not be terribly helpful at this time. Furthermore, Macklem stated they could potentially reduce the effective lower bound without going negative which is at 25bps and that it could be a bit lower. (Newswires)

Brazil Treasury Secretary Funchal said the country must return to fiscal discipline which will help lower long-term interest rates, while he added that they must control mandatory spending and must not give public sector workers pay increase. Funchal also stated that priority in Congress next week will be Federative pact and emergency aid constitutional amendments. (Newswires)

Turkish Central Bank revised banks' reserve ratio requirements and the Turkish banking regulator later noted that required reserves of the banking system is expected to increase by TRY 12.3bln and USD 5.7bln in FX and gold after the revision to required reserves. (Newswires)

FIXED

Gilts remain edgy before the next round of physical Brexit discussions, as prospects of a deal seem to have turned from 95% or on the brink to nigh on impossible amidst more batting of the ball between Brussels and London in terms of which side needs to compromise on the pact making or breaking issues. However, the 10 year debt future has rebounded alongside Bunds and US Treasuries to carve out a new Liffe intraday peak at 135.43 (just 1 tick sub-par vs -22 ticks at worst), while its German equivalent just retested its 175.65 Eurex best and T-note hovers near the upper end of 138-17+/138-07+ parameters. Note also, the UST curve is holding a flatter line in keeping with the above-average and lengthy duration profile for month end.

COMMODITIES

WTI and Brent futures have clambered off pre-European cash open lows as prices coattail on gains seen across the equity-sphere, and ahead of the OPEC/OPEC+ showdown next week (full preview available in the Research Suite) whereby markets have largely priced in the rollover of the current 5.7mln BPD cuts through Q1 2021. That being said, the recent price rally has cast doubts over the eagerness of some members to agree to this. Analysts at ING see downside risk heading into the meeting as "it is unlikely that OPEC+ surprise with a six-month rollover given the latest move in prices, while the three-month rollover is already largely priced in. So anything less than a three-month extension will likely be seen as bearish." Further, OPEC and OPEC+ experts are poised to meet today in preparation for the main event, whilst Saudi Arabia and Russia have invited delegation heads of the JMMC to hold informal consultations on Saturday at 13:00GMT, EnergyIntel's Bakr citing sources, thus weekend reports can be expected. Nonetheless, WTI Jan has reclaimed USD 45/bbl-status (vs. low 44.55/bbl) whilst Brent Feb re-tests USD 48/bbl (vs. low 47.35/bbl). Elsewhere, spot gold and silver exhibit somewhat of a holding pattern which reverberated from the APAC session amid lower volumes and a lack of fresh catalysts. Spot gold sees itself meandering just north of USD 1800/oz with the 200DMA residing just below the figure at 1799/oz, while spot silver fails to make much headway above USD 23.00/oz. Elsewhere, LME copper approached seven-and-a-half-year highs in light of the vaccine updates this month raising demand hopes. Finally, Chinese ferrous futures traded firmer overnight, with iron ore futures notching its third week of gains whilst hot-rolled coal prints its sixth amid depleting stockpiles prompted by demand hopes.

Saudi Arabia and Russia have invited heads of delegations of JMMC to hold informal consultations on Saturday at 13:00GMT, EnergyIntel's Bakr citing sources. (Twitter)

Direct oil shipments from Venezuela to China resume after being halted due to US sanctions, according to reports citing data and documents. (Newswires)