• Equities began the session on the backfoot and have extended to the downside, with the NQ lagging stateside post-SNAP.
• SNAP -25% in the pre-market; TWTR -8%, with the US reportedly to review Musk's deal
• USD continues to climb with the index above 113.50 at best while USD/JPY tests 151.00 and Cable near 1.11
• Debt has extended on initial downbeat performance amid Germany approving the debt brakes suspension; UK 10yr back above 4.00%
• Crude complex is softer on the session but off worst levels amid reports that China and Saudi are to cooperate on oil market stability
• Looking ahead, highlights include Sovereign Debt Ratings for the UK, Germany, Czech and Italy, Speech from Fed's Williams

As of 11:15BST/06:15ET

LOOKING AHEAD

• Sovereign Debt Ratings for the UK, Germany and Italy, Speech from Fed's Williams.
• Click here for the Week Ahead preview.

EUROPEAN TRADE

EQUITIES

• Cash bourses in Europe started the session with losses which then extended to the downside as market sentiment further deteriorated.
• Sectors in Europe are in a sea of red, but defensive sectors are faring better than cyclical peers, with Healthcare, Food & Beverages, Optimised Personal Goods, and Utilities towards the top of the bunch, whilst Retail, Consumer Products, Construction, Real Estate, and Basic Resources reside on the other end of the spectrum.
• US equity futures are also softer across the board with the NQ (-0.9%) lagging its peers (ES -0.6%, RTY -0.5%, YM -0.4%) as bond yields continue to climb.
• SNAP (SNAP) - Q3 2022 (USD): Adj. EPS 0.08 (exp. 0.00), Revenue 1.128 (exp. 1.14bln). Daily active users rose 19% Y/Y to 363mln (exp. 358.7mln), sees Q4 DAU of about 375mln. Quarterly sales growth was slowest on record. Authorized a stock repurchase program of up to USD 500mln of its Class A common stock. Not providing formal Q4 guidance and sees it as highly likely that Y/Y revenue growth will decelerate as we move through Q4, due in large part to the fact that Q4 has historically been relatively more dependent on brand-oriented advertising revenue, which declined slightly on a Y/Y basis in the most recent quarter. Estimate adj. EBITDA would be about USD 200mln under about flat Y/Y revenue growth assumption for D4. (businesswire) -25% in the pre-market
• US government is reportedly mulling a security review regarding Elon Musk's deal to acquire Twitter (TWTR), according to Bloomberg. Additionally, Elon Musk is said to have told prospective investors that he planned to cut almost 75% of Twitter (TWTR) workers, according to documents cited by Washington Post.
• CATL slows battery investment plans in N. America, according to Reuters sources; due to concern that new US rules around sourcing battery material will increase costs.
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FX

• DXY has continued to benefit from further yield upside with the 10-yr eclipsing 4.25% and the index to a 113.50+ best.
• As such, peers across the board are hampered with GBP lagging and approaching 1.11 amid the latest bout of political turmoil.
• EUR/USD seemingly found support as it neared the 0.97 mark and conscious of multiple chunky OpEx for the NY Cut.
• Traditional havens are also dented despite risk sentiment given differentials weighing; USD/JPY has risen to a test of 151.00, with participants attentive for any BoJ/MoF reaction.
• Antipodeans are unable to escape the USD's ascendance with CAD similarly dented, but off worst, amid the most recent paring of crude losses.
• China's major state-owned banks are seen selling USD in the onshore spot market to stabilise the Yuan, according to Reuters sources; meant to prevent the spot price from weakening past 7.25.
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Notable FX Expiries, NY Cut:

• EUR/USD: 0.9670-75 (783M), 0.9700 (1.75BN), 0.9725 (1.2BN), 0.9745-50 (1.07BN), 0.9770-75 (656M), 0.9800-10 (1.42BN), 0.9840-50 (1.90BN)
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FIXED INCOME

• Debt has extended on initial downbeat performance amid Germany approving the debt brakes suspension to fund their EUR 200bln energy support scheme.
• As such, Bunds are subdued by over a full point; though, amid ongoing political turmoil, Gilts remain the laggard and briefly lost the 97.00 handle sending the corresponding yield back above 4.0%.
• Stateside, USTs are similarly pressured though a touch more contained ahead of Fed's Williams as we near the blackout period.
• Elsewhere, the periphery has been unreactive to the as-expected announcement that the Italian coalition has put Meloni forward to become PM.
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COMMODITIES

• WTI and Brent December contracts are lower intraday but off lows amid the firmer Dollar and deterioration of broader risk sentiment.
• Spot gold posts modest losses and remains under USD 1,650/oz after dipping below yesterday’s lows.
• LME metals are lower across the board with 3M copper also weighed on by the risk mood – the red metal trades on either side of USD 7,500/t.
• Saudi and China are said to be ready to cooperate oil market stability; Saudi remains the most trusted China oil supplier, according to a joint statement cited by Bloomberg.
• EU Council President Michel said the European Council reached an agreement on energy and agreed to work on measures to contain energy prices, according to Bloomberg.
• Belgium PM says it will take 2-3 weeks for energy ministers to come up with how to implement the gas price cap, via FT's Bounds; two energy ministers summit will probably be needed to agree energy package, via WSJ's Norman.
• Hungary's PM Orban said an agreement was reached that even if the EU imposes a gas price cap, long-term supply agreements will be exempt, according to a Facebook post.
• US Treasury Official estimates that Russia has sufficient tankers and services to trade about 80-90% of its oil, following the December 5th sanctions; circa. 1-2mln BPD of Russian crude and refined products could be shut in if they resist the price cap, via Reuters.
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NOTABLE EUROPEAN HEADLINES

• German Parliament votes to approve the suspension of the debt brake, via Reuters.
• Italy's Meloni says she has been proposed by the rightist coalition as PM to President Mattarella, via Reuters.
• The ECB is planning to create a new interest rate, according to Expansion.

NOTABLE EUROPEAN DATA

• UK GfK Consumer Confidence (Oct) -47 vs. Exp. -52.0 (Prev. -49.0)
• UK Retail Sales MM (Sep) -1.4% vs. Exp. -0.5% (Prev. -1.6%, Rev. -1.7%); YY (Sep) -6.9% vs. Exp. -5.0% (Prev. -5.4%, Rev. -5.6%)

NOTABLE US HEADLINES

• US government is reportedly mulling a security review regarding Elon Musk's deal to acquire Twitter (TWTR) with Biden administration officials discussing whether the US should subject some of Musk's ventures to security reviews, according to Bloomberg. It was also reported in the Washington Post that Elon Musk told prospective investors that he planned to cut almost 75% of Twitter workers and that the current management had reportedly planned to cut payroll by about USD 800mln by the end of next year, although an internal memo from Twitter later stated that there were no plans for any company-wide layoffs.

CRYPTO

• Bitcoin is under pressure and has lost the USD 19k handle and lies at the lower-end of a circa USD 700 range for the session.

GEOPOLITICS

RUSSIA-UKRAINE

• US Secretary of State Blinken said they take the Russian threat to use nuclear weapons seriously but have not yet seen a reason to change our nuclear status, according to Al Jazeera.
• EU could reinforce sanctions on Iran if support for Russia isn't wound back; "Several leaders said they'd be open to additional sanctions this morning.", according to WSJ's Norman.

CHINA-TAIWAN

• US Secretary of State Blinken said they place great emphasis on making sure the differences between China and Taiwan are resolved peacefully and not through coercion or force, according to Al Jazeera.

APAC TRADE

EQUITIES

• APAC stocks traded cautiously with the region lacking firm direction following the weak lead from Wall Street where stocks reversed initial gains amid mixed data releases and continued upside in yields.
• ASX 200 was dragged lower by underperformance in industrials and the top-weighted financials sector, while the Australian Treasurer also flagged a 25bps hit to Q4 GDP from recent floods.
• Nikkei 225 was slightly softer after mostly inline inflation data which showed Core CPI at its fastest pace of increase since 2014 and as participants remained on alert for intervention after the JPY weakened beyond the 150.00 level for the first time since 1990.
• Hang Seng and Shanghai Comp. were indecisive heading towards the conclusion of the Communist Party Congress and pending release of delayed key data. Furthermore, Chinese press reports noted analysts see room for an LPR cut by year-end, although there was also the threat of further tech restrictions with the US eyeing expanding its China tech ban to quantum computing and A.I. products.

NOTABLE APAC HEADLINES

• US is reportedly eyeing expanding its China tech ban to quantum computing and AI products, according to Bloomberg.
• Australian PM Albanese said he is concerned about a delay to the implementation of the UK-Australia trade agreement amid UK political instability, according to Reuters.
• Australian Treasurer Chalmers said the latest floods are to cut 25bps from GDP growth in the December quarter, while floods will add 10bps to inflation in December and March quarters, according to Reuters.

DATA RECAP

• Japanese National CPI YY (Sep) 3.0% vs Exp. 2.9% (Prev. 3.0%); CPI Ex. Fresh Food YY (Sep) 3.0% vs Exp. 3.0% (Prev. 2.8%); Ex. Fresh Food & Energy YY (Sep) 1.8% vs Exp. 1.8% (Prev. 1.6%)
• New Zealand Trade Balance (Sep) -1615M (Prev. -2447.0M, Rev. -2625M)
• New Zealand Exports (Sep) 6.03B (Prev. 5.48B, Rev. 5.29B); Imports (Sep) 7.64B (Prev. 7.93B, Rev. 7.92B)