• Asia-Pac equities initially traded lower, but later painted a mixed picture; US equity futures traded with a downside bias
• Apple (-3.5% AM) and Amazon (-4.0% AM) both initially fell over 5% post-earnings; both firms cited supply chain issues
• Facebook (FB) to rebrand as "Meta" - new ticker "MVRS" to trade from December 1st
• RBA again refrained from defending the Apr 2024 bond yield; bond yield rose to 0.77% vs RBA's 0.10% target
• ECB sources stated that President Lagarde's mild rates pushback reflected ECB colleagues' views
• The US is committed to helping Taiwan with its ability to defend itself, according to a top US diplomat in Taiwan
• Looking ahead, highlights include German GDP (Flash), EZ CPI (Flash), US PCE Price Index, Chicago PMI, Canadian GDP
• Earnings: BNP Paribas, Daimler, Danske Bank, Eni, EssilorLuxottica, Safran, Signify, Swiss Re; Exxon, Chevron, Phillips 66, AbbVie, Colgate-Palmolive

CORONAVIRUS UPDATE

South Korea is to ease social distancing measures next month, according to Yonhap. (Yonhap)

ASIA

Asia-Pac equities initially traded lower but later painted a mixed picture as the tailwinds from Wall Street dissipated. The S&P 500 and Nasdaq closed at record highs, whilst the DJIA and R2K posted solid gains. Aftermarket earnings saw reports from Apple (-3.5% AM) and Amazon (-4% AM), who both fell over 5% at one point, in turn hitting the NQ, with both firms citing supply chain issues. US equity futures overnight resumed trade modestly firmer but then drifted lower as APAC sentiment seeped into the Western futures. The ASX 200 (-0.8%) was dragged lower by its Telecoms and Financials sectors, whilst the KOSPI (-0.7%) conformed to the risk tone. The Nikkei 225 (+0.3%) was initially hampered with some of the export-heavy sectors towards the bottom of the bunch, although later recovered as the JPY eased, and with Japan also looking ahead to the lower house election on Sunday. The Shanghai Comp (+0.2%) saw its opening losses cushioned after another daily net CNY 100bln injection by the PBoC, for a net weekly injection of CNY 680bln – the largest in 21 months. Hang Seng (-0.5%) failed to recover amid post-earnings losses from BYD, Ping An Insurance, and Petrochina, whilst Alibaba and Tencent are also in the red. Finally, the RBA once again refrained from defending the April 2024 yield, with the bond extending its rise to 0.77% vs the RBA's 0.10% target range.

• PBoC injected a CNY 200bln for a net CNY 100bln via 7-day reverse repos at a rate of 2.20%
• PBoC injected a weekly net CNY 680bln via OMO, the largest in 21 months
• PBoC set USD/CNY mid-point at 6.3907 vs exp. 6.3882 (prev. 6.3957)

China Evergrande (3333 HK) has made another debt payment ahead of Friday, according to NYT. (NYT) China Evergrande founder has pledged to repay USD 260mln in bonds, according to reports. (Newswires)

Japan's ruling coalition is on track to maintain a majority, according to Nikkei. (Nikkei) Lower house elections are set to take place on Sunday.

Japanese Government said Japanese car production fell 28.2% M/M in September; Factory output posted the biggest M/M drop in the month since May. Japanese government official said October output may not expand as much as expected as worries over the chips and parts shortages remain (Newswires)

• Australian Retail Sales MM Final (Sep) 1.3% vs. Exp. 0.2% (Prev. -1.7%)
• Australian PPI YY (Q3) 2.9% (Prev. 2.2%)
• Australian PPI QQ (Q3) 1.1% (Prev. 0.7%)

CENTRAL BANKS

ECB sources stated that President Lagarde's mild rates pushback reflected ECB colleagues' views; officials advised not to say the market is wrong. Policymakers also agreed to signal PEPP ending in March. (Newswires)

The RBA again made no offer to purchase Apr 2024 yield-target bond. (Newswires) Australian Apr 2024 bond yield topped 0.77% vs the RBA's 0.10% target. ANZ expects the RBA to eliminate its Apr 2024 YCC target at the upcoming meeting. (Newswires)

UK/EU

UK Ministers are holding discussions inside the key cabinet committee about the repercussions of triggering Article 16, which allows the UK to stop following some parts of the Northern Ireland Protocol. Separately, the UK Foreign Secretary has summoned the French Ambassador for discussions today over the seizing of a UK vessel. (Sky News/BBC News)

FX

In FX, DXY saw a mild rebound from yesterday’s 93.277 low, with the Index back above its 50 DMA (93.345), although an improvement in the risk tone saw the DXY ease off the 93.415 overnight high. EUR/USD and GBP/USD drifted off yesterday’s best levels in tandem with the Dollar, and the latter eyed its 100 DMA to the downside (1.3780). The EUR/GBP cross traded flat in a tight range. AUD/USD was again interesting as the RBA again refrained from purchasing its yield-target bond, which resulted in speculation that a tweak may be made on that front at next week’s central bank meeting. AUD/USD retained a bid and subsequently pressured the NZD as the AUD/NZD cross topped 1.0500. USD/JPY meanwhile briefly dipped under 113.50 in the first half of the session but thereafter felt some pushback from the Dollar and the somewhat improved risk tone.

COMMODITIES

Industrial commodities largely consolidated. WTI and Brent front month futures were flat around yesterday's best levels, with traders looking ahead to next week's OPEC+ meeting. Expectations are skewed towards a rollover of the current hiking pace of +400k BPD, with Saudi, Russia, Nigeria and Algeria all recently voicing support for that plan. However, EnergyIntel reported that OPEC+ now sees more room for its oil in the market, citing an initial draft report. Elsewhere, spot gold and silver showed some weakness towards the latter half of the APAC session, with the former drifting below the 1,800/oz mark and re-eyeing its 200 and 100 DMAs at USD 1,791/oz and USD 1,787/oz, respectively. Copper prices were flat overnight. Thermal coal futures in Zhengzhou slumped after China's State Planner said there is room for continued adjustments of coal prices and added the initial investigation results show coal production costs are significantly below current coal spot prices.

China's State Planner said there is room for continued adjustments of coal prices; initial investigation results show coal production costs are significantly below current coal spot prices. (Newswires)

OPEC+ output increase should not exceed 0.4mln BPD in December, Algeria's energy minister told state news. (Newswires) OPEC+ now sees more room for its oil in the market, according to an initial draft report cited by EnergyIntel. (EnergyIntel)

White House said US President Biden will informally consult with key energy consumers. (Newswires)

CME raises NYMEX natural gas futures maintenance margins by 9% to USD 7,000 per contract from USD 6,400 in December 2021. (Newswires)

CME lowers COMEX 5000 silver futures initial margin by 8% to USD 11.5k/contract from USD 12.5k/contract. (Newswires)

GEOPOLITICAL

The US is committed to helping Taiwan with its ability to defend itself, according to a top US diplomat in Taiwan. US support for Taiwan and defense relations are rock solid and remain unchanged (Newswires) Yesterday, Taiwan's President said the threat from China is increasing 'every day, and confirmed the presence of US troops on the island, according to CNN.

Chinese Foreign Ministry confirmed that Chinese President Xi will dial into the G20 summit via video link. (Newswires)

US DoJ said a Russian national has been extradited to the US to face charges for an alleged role in cybercriminal organization. (Newswires)

White House said they are exploring a new economic framework for the Indo-Pacific. (Newswires)

White House says Turkey is in process regarding purchasing F-16 fighter jets. (Newswires)

White House says US President Biden will meet on Saturday with Germany, France and the UK and they will cover Iran; they are working toward a joint negotiating position. (Newswires)

US

T-Notes were choppy in APAC/early European trade on Thursday with any breaks above 131-00 failing to hold. EGBs were on the defensive into the ECB meeting, with periphery spreads widening; T-Notes made session lows at 130-19+ in sympathy with Bunds as the statement failed to show any meaningful pushback on hawkish expectations. It wasn't until Lagarde's presser/Q&A that she pushed back on market rate hike pricing in the Eurozone – heading into the meeting OIS saw 10bps of hikes from the ECB in 2022 – which led to a partial reversal of earlier losses, although Eurozone spreads remained significantly wider, perhaps part due to Lagarde's nod to potential for greater inflation/bottlenecks than originally thought. Across the pond, there wasn't much reaction to the US Advanced Q3 GDP miss, although given it wasn't disastrous, the taper timeline remains intact; initial jobless claims also ticked lower on the week. T-Notes retested to the downside later in the session after the sloppy 7yr auction (more below) but failed to make new session lows before settlement. T-Note (Z1) futures settled 13+ ticks lower at 130-24.

Amazon (AMZN) Q3 2021 (USD): EPS 6.12 (exp. 8.92), Revenue 110.8bln (exp. 111.6bln). AWS sales 16.11bln (exp. 15.40bln); Online Stores Sales 49.94bln (exp. 51.53bln). Q4 Revenue view 130-140bln (exp. 142bln), Q4 op. income view 0-3.0bln (prev. 6.0bln Y/Y) "In Q4, we expect to incur several billion dollars of additional costs in our Consumer business as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs". (Amazon IR) Amazon sees USD 4bln in labour, inflation and operational disruption costs in Q4, according to the CFO. CFO said the Co. sees itself as a "shock absorber" so customers and merchants on the platform are not affected by higher costs. (Newswires) Shares fell 4.1% after market.

Apple Inc (AAPL) Q4 2021 (USD): EPS 1.24 (exp. 1.24/1.23 GAAP), Revenue 83.4bln (exp. 84.85bln). iPad: 8.25bln (exp. 7.227bln). iPhone: 38.87bln (exp. 41.511bln). Mac: 9.18bln (exp. 9.227bln). Other Products: 8.79bln (exp. 9.326bln). Services: 18.28bln (exp. 17.637bln). Supply chain constraints had larger than expected impact of 6bln on Q4 sales. Chip shortages and COVID related supply chain disruptions in S.E Asia impacted sales. Supply constraints affecting all of Apple's product lines. (Businesswire) CFO expects to achieve "very solid" revenue growth in December quarter and expects to set a record. Shares fell 3.6% after market.

Facebook (FB) to rebrand as "Meta" - new ticker "MVRS" to trade from December 1st. (Newswires) Facebook's (FB) new Meta Smartwatch is to have a front-facing camera, according to reports. (Newswires)

US House Speaker Pelosi confirmed that the House vote on the Infrastructure Bill will be postponed; noted that most who originally opposed the bill now support it. The White House said it is confident Congress will soon pass the Infrastructure and Social Spending and Climate bills. (Newswires)

US Senator Sanders said the House should not vote for infrastructure bill without clear language on Biden's budget reconciliation package. (Newswires) US Progressive Democratic Representative Jayapal said she is still unchanged and would vote against The Infrastructure Bill if it came to the floor yesterday, via CNN's Fox. (Twitter) US Democratic Senator Manchin said USD 1.75tln Biden Agenda price tag is not too high for him, called it "negotiated". (Newswires)

US House approved (358-59) the stopgap extension of the highways programme. (Twitter)

White House said there will announce steps on stockpiles to ease supply chains and is expecting solid outcomes from meeting; hopes to agree to set of principles with other countries improving supply chains. (Newswires)

CRYPTO

Ethereum (ETH) hits an all-time-high on Binance and BitStamp. (Newswires)

Australian Securities and Investments Commission (ASIC) released guidance on crypto investment products: ASIC has introduced a new ‘crypto-asset’ category in the licensing application for responsible entities. Responsible entities that intend to hold underlying assets that comprise crypto-assets will need to hold an authorisation in relation to crypto-assets. Key matters covered by ASIC’s good-practice guide include admission and monitoring standards, custody of crypto-assets, pricing methodologies, disclosure and risk management. (ASIC)

Monetary Authority of Singapore (MAS) vows to regulate digital assets to combat financial crimes performed through cryptocurrencies, says stablecoins could have a "useful role". (Finance Magnates)