• Major European bourses see gains across the board with US equity futures also in firm positive territory
• EMA has received application for conditional market authorisation for Pfizer/BioNTech's and Moderna's vaccine candidates
• Fed Chair Powell’s testimony at the Senate Banking Committee reiterated that the outlook for the US economy is uncertain and will depend on the virus
• ECB's Schnabel says the ECB is not obliged to do what the market expects; a 12 month PEPP extension is one thing being considered
• In FX, the DXY trades off worst levels, EUR/USD remains sub-1.2000 and GBP/USD briefly eclipsed 1.3400
• OPEC+ meeting has been rescheduled to December 3rd as more discussions are said to be needed
• Looking ahead, highlights include US Markit Manufacturing Final PMI, US ISM Manufacturing and Construction Spending, Fed Discount Rate Minutes, US President-elect Biden to unveil economic team, Fed's Powell, Brainard, Daly, Evans, ECB's Lagarde

CORONAVIRUS UPDATE

EMA is to express an opinion on the Pfizer (PFE)/BioNTech (BNTX) vaccine on December 29th, according to sources cited by FT; Moderna (MRNA) shot discussion will take place on January 12th; AstraZeneca (AZN) vaccine will not be scrutinised before January. (FT)

Pfizer (PFE)/BioNTech (BNTX) have submitted applications for conditional marketing authorisation for COVID-19 vaccine to EMA, data from clinical trials show efficacy of 95% for BNT162B2 with no safety concerns. (Newswires). EMA has received application for conditional market authorisation for Pfizer (PFE)/BioNTech (BNTX) BNT162B2 and Moderna's (MRNA) vaccine candidate. (Newswires)

US COVID-19 cases +152,608 (prev. +143,333); deaths +885 (prev. +1,210), New York COVID-19 cases +6,819 (prev. +6,723); positivity rate 4.57% (prev. 4.27%); hospitalisations 3,532 (prev. 3,372); deaths +54 (prev. +55). (Newswires) California Governor Newsom said we will need to take drastic action including a potential stay-at-home order for certain regions if the coronavirus trends continue and that ICU admissions are on track to exceed capacity state-wide by mid-December. (Newswires)

ASIA

Asian equity markets traded positively as strong data releases helped the region shrug-off the weak handover from US where stocks were pressured by month-end flows in which cyclicals underperformed and most major indices finished in negative territory, although the DJIA still notched its best monthly performance in more than 3 decades with a monthly gain of almost 12%. ASX 200 (+1.1%) advanced from the open with broad optimism across its sectors aside from energy following similar underperformance stateside and with the OPEC+ meeting postponed to Thursday to provide additional time for talks amid disagreements regarding extension of current production levels. Nikkei 225 (+1.3%) benefitted from more favourable currency flows which provided reprieve for Japanese exporters, while the KOSPI (+1.7%) was boosted after the upward revision to South Korean GDP for Q3 which was increased to 2.1% Q/Q from the preliminary 1.9% growth. Hang Seng (+0.9%) and Shanghai Comp. (+1.8%) conformed to the upbeat mood following the blockbuster Caixin Manufacturing PMI data which printed at a decade high of 54.9 vs. Exp. 53.5 and spurred Chinese markets to pick up from the slow start after the PBoC drained liquidity and with China’s new export control laws taking effect today, while Hong Kong had also announced further COVID-19 restrictions to curb the latest wave of the virus. Finally, 10yr JGBs saw mild gains despite the positive risk tone and mixed results at the 10yr JGB auction, as prices extended on the rebound from support through the key 152.00 level.

PBoC injected CNY 20bln via 7-day reverse repos with at a rate of 2.20% for a net daily drain of CNY 50bln. (Newswires)PBoC set USD/CNY mid-point at 6.5921 vs. Exp. 6.5900 (Prev. 6.5782)

• Chinese Caixin Manufacturing PMI (Nov) 54.9 vs. Exp. 53.5 (Prev. 53.6); 10-year high
• South Korean Revised GDP Growth (Q3) Q/Q 2.1% (Prev. 1.9%)
• South Korean Revised GDP Growth (Q3) Y/Y -1.1% (Prev. -1.3%)

Chinese Foreign Ministry, on US imposing Venezuela-related sanctions on Chinese firms, says China will take all necessary measures to safeguard Co rights and interests. (Newswires)

US

Fed Chair Powell reiterated recent commentary that the outlook for the US economy is uncertain and will depend on the virus, while he stated that the Fed's actions have unlocked almost USD 2trln of funding to support businesses, non-profits and local government. (Newswires)

Fed's Kaplan (voter) sees a very difficult 3-6 months but is optimistic about the next 12 months, while he added that he is reluctant to adjust asset purchases until there is more visibility on the outlook and is open-minded regarding the Fed giving more forward guidance on its asset purchase plan in the December meeting or later meetings. (Newswires)

US Treasury Secretary Mnuchin said based on recent data, he continues to believe targeted fiscal package is most appropriate federal response to pandemic and strongly encourages Congress to use USD 455bln in unused CARES Act funds to pass an additional bill. (Newswires)

Wisconsin Governor Evers certified President-elect Biden as the winner of the state's Presidential election, which followed confirmation by the Wisconsin Election Commission that Biden won in the state after a recount in 2 counties. (Newswires)

UK/EU

ECB's Schnabel says the ECB is not obliged to do what the market expects from us; a 12 month PEPP extension is one thing being considered; could consider longer duration of favourable TLTRO rate. (Newswires) Note the next policy announcement will be on Dec 10th

UK Health Secretary Hancock is to close the debate on UK tiering measures possibly as late as 19:00GMT, with MPs to vote after, according to Politico. (Politico)

EU Markit Manufacturing Final PMI (Nov) 53.8 vs. Exp. 53.6 (Prev. 53.6) (Newswires)UK Markit/CIPS Manufacturing PMI Final (Nov) 55.6 vs. Exp. 55.2 (Prev. 55.2)

EQUITIES

Major European bourses see gains across the board (Euro Stoxx 50 +1.1%) as the region added to the modest upside seen at the cash open after taking its cue from positive APAC session. State-side, US equity futures hold onto gains seen overnight in a retracement of yesterday's month-end induced losses - with ES +0.8%, NQ +0.7% and YM +1.1%, RTY +1.5%. On the COVID-19 front, distribution of a vaccine is seemingly unlikely this year as the European Medicine Agency (EMA) is to express an opinion on the Pfizer/BioNTech vaccine on December 29th, according to sources cited by FT whilst Moderna's shot discussion will take place on January 12th and AstraZeneca's vaccine will not be scrutinised before January. Back to Europe, the region experiences broad-based upside with sectors also higher across the board and with a pro-cyclical bias vs. the mixed performance seen at the open. As such, Basic Resources, Banks, Oil & Gas and Autos top the charts whilst Healthcare, Staples and Utilities reside on the other end of the spectrum. As such, the SMI's (+0.1%) gains are hampered given its heavy exposure to the pharma sector. The energy sector meanwhile rose from the ashes amid the price action in the energy complex. In terms of individual movers, UniCredit (-6.2%) share remain pressured after following CEO Mustier is to step down following clashes with the board over strategy. Mustier will remain in his post until either the end of his term of until a successor has been appointed. Elsewhere, Munich Re (+1.7%) shares saw a leg higher after setting FY20 targets whilst noting the pandemic impact on next year's financials will be considerably lower.

Zoom Video (ZM) - Q3 20 (USD): Adj. EPS 0.99 (exp. 0.76), Revenue 777mln (exp. 690mln). Guides above estimates. FY EPS view 2.85-2.87 (exp. 2.55). FY Revenue view 2.58bln (exp. 2.41bln) (Newswires)

FX

USD - Well that didn’t last long in terms of a recovery for the Greenback and price action suggests a classic short squeeze once the bulk of or residual month end rebalancing was out of the way. Indeed, the DXY only managed a fleeting appearance back above 92.000 late Monday before receding again and is back below the round number within a 91.964-603 range having rebounded from 91.504 to 92.051 amidst another upturn in risk sentiment at the start of December awaiting the final US Markit manufacturing PMI, ISM, construction spending and the first testimony from Fed chair Powell that has been somewhat pre-empted by the release of his text.

GBP/EUR - The Pound has picked up the baton from the Euro in terms of testing psychological resistance vs the Buck, at 1.3400, but like the single currency it has failed to sustain momentum as Brexit trade talks remain stymied on the 3 key issues and UK Cabinet Minister Gove concedes that there may be no negotiated outcome. However, Eur/Gbp is holding around 0.8960 after touching 0.9000 yesterday following an upward revision to the final manufacturing PMI that marginally eclipsed the Eurozone upgrade after mixed individual member state readings. Hence, Eur/Usd remains capped below 1.2000 and 1 bn option expiry interest from the big figure up to 1.2010, albeit recouping losses after its reversal to sub-1.1930.

NZD/CHF/CAD/AUD - All firmer against their US counterpart, but to varying degrees as the Kiwi consolidates off 0.7050 peaks in the run up to NZ trade data and Franc pivots 0.9070 in wake of stronger than forecast Swiss GDP and manufacturing PMI. Elsewhere, the Loonie is holding 1.3000+ status and eyeing crude prices in advance of OPEC for further direction and the Aussie is straddling 0.7350 post-RBA (unchanged policy settings in line with consensus so soon after aggressive easing last time) and conflicting leads via building approvals, current account and net export releases overnight. Next up, Q3 GDP before a speech from RBA Governor Lowe later on Wednesday.

JPY - The Yen is still caught between stalls as it tracks Dollar moves in response to the overall market tone and its own standing as a safe haven, but has retreated through 104.00 to test support into 104.50 after several failed attempts to breach recent highs. Nevertheless, Usd/Jpy appears unlikely to threaten decent option expiries between 104.85-105.00 (1 bn) at this stage.

SCANDI/EM - Contrasting fortunes for the Sek and Nok in keeping with the respective Swedish and Norwegian manufacturing PMIs, while the latter also looks apprehensive given the delay in scheduling for OPEC+ due to the lack of agreement within the cartel on extending output curbs. Meanwhile, the Cnh continues bounce with assistance from another strong Chinese PMI (Caixin manufacturing) and irrespective of the PBoC setting a softer Cny midpoint fix, in contrast to the Try after a slowdown in Turkey’s manufacturing PMI.

RBA kept the Cash Rate Target and 3yr yield target unchanged at 0.10% as expected and also maintained the parameters of term funding, while it stated the Board is not expecting to raise the Cash Rate for at least 3 years and is prepared to do more if needed with the size of the bond purchase program to be kept under review. RBA commented that fiscal and monetary support will likely be required for some time and addressing high unemployment is a national priority with a further rise in unemployment rate still expected but added that employment growth was strong again in October. Furthermore, the RBA stated that Australia's economic recovery is underway and recent data was generally better than expected but the recovery is still expected to be uneven and drawn out, as well as dependent on significant policy support. (Newswires)

Notable Option Expiries

• EUR/USD: 1.2000-10 (1BLN)
• USD/JPY: 103.00 (504M), 104.85-00 (1BLN)

FIXED INCOME

Not the warmest reception or best results from the DMO, but Gilts have recovered more lost ground than their debt counterparts against the backdrop of buoyant stocks and FTSE outperformance awaiting the 2nd of today’s auctions. The 10 year bond has bounced from 134.10 towards early Liffe highs and is now outperforming Bunds and USTs that remain below par, albeit also off new intraday lows (174.94 and 138-00+ for the T-note) and holding up better than the Eurozone periphery that could be taking heed of remarks from ECB’s Schnabel that seem less dovish than recent comments or guidance. Indeed, while revealing that the PEPP envelope may be pushed out for another year alongside extending TLTROs at friendly rates, the GC member also contends that there is no obligation to deliver what the market anticipates, in contrast to minutes of the October policy meeting that inferred an inclination to be consistent with expectations. Ahead, busy pm agenda including US manufacturing surveys, data and yet more Central Bank speak, including ECB President Lagarde who may reassure EZ debt about recalibration.

COMMODITIES

WTI and Brent futures see a choppy session whereby the benchmarks nursed earlier losses seen in wake of the OPEC+ meeting postponement to Dec 3rd which was due to ministers being unable to reach concensus on potential tweaks to the Declaration of Cooperation (Doc), although ministers are set to meet today at 13:00GMT/08:00EST for further negotiations, and thus source reports throughout the day are expected (Note: the Newsquawk OPEC Twitter Dashboard is available via the website). Meanwhile, markets are yet to see the implications of Saudi Arabia resining from its role as chairman of the OPEC-plus alliance and co-chairman of the JMMC, with some speculation doing the rounds of increased risks of a price war. Eyes are also on UAE who seemingly has not commmitted itself to a particularly course of action, and with recent reports resurfacing that the Kingdom is may drop out of the OPEC alliance. In terms of recent commentary from members, the Algerian Energy Ministry struck an optimistic tone with regards to reaching an accord whilst Kremlin stated that President Putin will not consult with Russian oil companies ahead of the OPEC+ meeting. WTI Jan has reclaimed a USD 45/bbl handle (vs. low 44.81/bbl) whilst Brent Feb 21 sees itself on either side of USD 48/bbl (vs. low 47.40/bbl). Elsewhere, spot gold and silver prices are underpinned by the softer Buck as the former breached 1800/oz to the upside alongside its 200DMA ~1801/oz, whilst the latter re-gained a footing above USD 23/bbl. Finally, LME copper prices are bolstered by the softer Dollar and stock market gains as the contracts mimic price action seen in Shanghai futures.

OPEC+ meeting has been rescheduled to December 3rd as more discussions are said to be needed, while there was no statement issued after the OPEC meeting on Monday but OPEC countries are planning to meet again on Tuesday. It was later reported that OPEC ministers are to meet again today at 1400CET/1300GMT and OPEC doesn't have full consensus yet which is why meeting with OPEC+ has been pushed back, according to energyintel's Bakr. (Newswires/Twitter)

Kremlin said Russian President Putin does not plan to meet with Russian oil companies ahead of the OPEC+ meeting. (Newswires)

GEOPOLITICAL

Foreign policy experts have urged US President-elect Biden to secure an arms control agreement with North Korea. (FT)