• APAC stocks were mixed as the region only partially sustained the early momentum seen following the positive handover from Wall St.
• European equity futures are contained with Eurostoxx 50 futures up 0.1% after the cash market closed up 0.6% yesterday.
• DXY is a touch firmer and on a 110 handle, EUR/USD lingers around parity, Cable is back below 1.15.
• UK PM Sunak is expected to increase pensions and benefits in line with inflation, according to The Times.
• Looking ahead, highlights include EZ Retail Sales, US Midterms, Speeches from BoE's Pill, Fed's Williams, ECB's Nagel & SNB's Jordan, Supply from Germany, US & UK (syndication).

US TRADE

• US stocks gained and the dollar extended its sell-off amid the broad risk-on mood amid China reopening rumours which helped offset concerns from Apple's warning that restrictions in China were impacting output, while the attention now shifts to Tuesday's US midterm elections.
• SPX +0.97% at 3,807, NDX +1.11% at 10,977, DJIA +1.31% at 32,829, RUT +0.55% at 1,809.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US monetary policy is substantially tighter than the Fed Funds Rate indicates, according to San Francisco Fed research.
• Fed's Barkin (2024 voter) said it would have made more sense if the Fed had begun tightening earlier.

APAC TRADE

EQUITIES

• APAC stocks were mixed as the region only partially sustained the early momentum seen following the positive handover from Wall St with Chinese stocks pressured overnight as infections continued to rise.
• ASX 200 traded marginally higher with the index kept afloat by strength in the top-weighted financial industry and gains in consumer-related sectors.
• Nikkei 225 was firmer and edged closer to the 28,000 level as participants digested earnings releases and shrugged off mixed household spending data although Average Cash Earnings accelerated.
• Hang Seng and Shanghai Comp were subdued despite the reopening rumours which officials pushed back against, while the number of daily new infections continued to climb from 6-month highs.
• US equity futures were rangebound (ES -0.1%) with price action lacklustre as attention turns to the US midterm elections.
• European equity futures are contained with Eurostoxx 50 futures up 0.1% after the cash market closed up 0.6% yesterday.

FX

• DXY found some reprieve after the recent sell-off and bounced off support near the 110.00 level, but with price action rangebound.
• EUR/USD faded some of its recent advances to test parity despite the latest rhetoric from ECB officials remaining hawkish.
• GBP/USD gave back the 1.1500 handle as the recent outperformance petered out, while press reports noted that PM Sunak is expected to increase pensions and benefits in line with inflation and that Chancellor Hunt is to announce a tax raid on inheritance.
• USD/JPY traded flat beneath the 147.00 handle with the BoJ Summary of Opinions doing little to spur a reaction in the currency.
• Antipodeans were lower with price action subdued alongside the mixed risk tone and COVID woes in China.
• PBoC set USD/CNY mid-point at 7.2150 vs exp. 7.2173 (prev. 7.2292)

FIXED INCOME

• 10yr UST futures prodded the prior day’s lows amid a busy corporate debt pipeline and after lacklustre BoE Gilt sale demand.
• Bund futures traded subdued after yesterday’s fluctuations.
• 10yr JGB futures were rangebound with prices restricted as Japan plans further issuances for its extra budget, although the downside was cushioned with the BoJ present in the market for JPY 1.75tln of JGBs on top of its daily fixed-rate operations, as scheduled.

COMMODITIES

• Crude remained rangebound with slight pressure seen after the rise in China's COVID infections.
• EU Commission reportedly signalled that it does not see a price cap on imported natural gas as the best tool to contain soaring gas costs and instead suggested a plan to spread costs over time, according to Bloomberg.
• UK PM Sunak is set to announce a major gas deal with America after the COP27 Climate Change Summit, according to The Telegraph
• Spot gold was marginally softer as the greenback found some reprieve from the recent sell-off.
• Copper traded lower with price action subdued and sentiment dampened amid the COVID woes in China.

CRYPTO

• Bitcoin was pressured alongside the cautious risk tone and slipped below the USD 20,000 level, with headwinds also as FTX Token sold off overnight.

NOTABLE ASIA-PAC HEADLINES

• Hong Kong Chief Executive Lee dismissed calls to drop the health code for travellers and mask-wearing rules, according to SCMP.
• Japanese PM Kishida is to approve USD 198bln extra budget for the stimulus plan, according to Bloomberg. Furthermore, Japan's government is to add JPY 1.4tln of fiscal loans for the second extra budget and will issue JPY 20.4tln in deficit-covering bonds, according to a draft cited by Reuters.
• BoJ Summary of Opinions stated that Japan's consumer inflation is likely to continue accelerating as firms pass on higher costs. Furthermore, consumer inflation is likely to slow back below 2% next fiscal year due to the impact of slowing global growth but cannot rule out chances that prices will sharply overshoot forecasts.
• RBNZ reappointed Governor Orr as the head for another five-year term, according to Reuters.

DATA RECAP

• Japanese All Household Spending MM* (Sep) 1.8% vs. Exp. 1.7% (Prev. -1.7%)
• Japanese All Household Spending YY* (Sep) 2.3% vs. Exp. 2.7% (Prev. 5.1%)
• Japanese Average Cash Earnings YY (Sep) 2.1% (Prev. 1.7%)
• Australian NAB Business Confidence* (Oct) 0 (Prev. 5.0)
• Australian NAB Business Conditions* (Oct) 22 (Prev. 25.0)
• Australian Westpac Consumer Sentiment Index (Nov) 78.0 (Prev. 83.7)
• New Zealand 1yr Inflation Expectations (Q4) 5.1% (Prev. 4.9%)
• New Zealand 2yr Inflation Expectations (Q4) 3.6% (Prev. 3.1%)

GEOPOLITICS

RUSSIA-UKRAINE

• Ukrainian President Zelensky said it is vital to force Russia to participate in genuine peace negotiations, according to Reuters.
• White House Press Secretary said US President Biden has no intention of meeting Russian President Putin, while State Department spokesman Price said Russia signals that it is focused on escalation, according to Bloomberg.

OTHER

• North Korea’s military denied exporting weapons to Russia in which it stated that it has never exported weapons or ammunition to Russia and has no plans to do so, according to Yonhap.

EU/UK

NOTABLE EU/UK HEADLINES

• BoE urged lenders to do more to avoid a repeat of the pensions fund turmoil seen in September, according to FT.
• UK PM Sunak is expected to increase pensions and benefits in line with inflation, according to The Times.
• UK Chancellor Hunt is to announce a tax raid on inheritance in the Autumn statement, according to The Telegraph and FT.
• Barclaycard UK consumer spending rose 3.5% Y/Y in October vs prev. 1.8% Y/Y increase in September, while Barclaycard said 48% of Britons plan to spend less on Christmas this year.
• UK plan to review or repeal all EU laws by end-2023 suffered another setback after 1,400 additional pieces of legislation were discovered, according to FT.
• UK and France are reportedly in the final stage of reaching an agreement concerning illegal English Channel crossing, according to FT.
• ECB President Lagarde reiterated that they must bring inflation back to 2% and that inflation is much too high, while she added that inflation expectations need to remain anchored and interest rates will rise further.
• ECB's Kazaks said there is no pivot with the ECB to keep raising rates and will still say that inflation is a problem. Kazaks said discussion about the size of the step is appropriate and the December step size depends on the economy and whether ECB adjusts other instruments, while he added there is no need to pause at the turn of the year and that the ECB should continue hiking into next year, according to Econostream Media.

DATA RECAP

• UK BRC Retail Sales YY (Oct) 1.2% (Prev. 1.8%)
• UK BRC Total Sales YY (Oct) 1.6% (Prev. 2.2%)