• European bourses are mixed overall, Euro Stoxx 50 +0.2%, as opening gains scale back after a mostly constructive APAC session.
• Stateside, US futures are firmer across the board with Tech leading after strong APAC tech trade and in wake of Fed's Brainard, ES +0.7%.
• DXY continues to slip after a pronounced move which occurred prior to the European cash open, currently near sub-106.00 lows to the broad benefit of peers.
• BTPs are leading the fixed income complex with upside in excess of a point, Bunds are similarly bid though to a lesser extent
• USTs move in tandem with EGBs with yields lower as such in wake of Fed's Brainard, who backed the FOMC downshifting to a lower increment of rate hikes in December.
• Crude benchmarks are pressured with the overarching COVID headwind weighing on the demand side and overshadowing any potential upside from the USD & G20.
• Looking ahead, highlights include US PPI, Speeches from Fed's Harker, Cook, Barr, ECB's Villeroy, Elderson.
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EUROPEAN TRADE

EQUITIES

• European bourses are mixed overall, Euro Stoxx 50 +0.2%, as opening gains scale back after a mostly constructive APAC session.
• Stateside, US futures are firmer across the board with Tech leading after strong APAC tech trade and in wake of Fed's Brainard, ES +0.7%.
• Home Depot Inc (HD) Q1 2023 (USD): EPS 4.24 (exp. 4.12), Revenue38.9bln (exp. 37.95bln); Comps sales +4.3% (exp. 3.1%); reaffirms FY22 guidance.
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FX

• DXY continues to slip after a pronounced move which occurred prior to the European cash open, currently near sub-106.00 lows to the broad benefit of peers.
• USD/JPY has been touted by some as a key driver of the above move given its quick move from above-140.00 to sub 139.00.
• GBP benefits from the USD weakness and perhaps firm wage metrics though this was accompanied by an unexpected unemployment uptick, ahead of Wednesday's CPI and Thursday's fiscal update.
• Yuan remains in keen focus as it moves comparatively closer to the 7.00 handle, though proved resilient to soft overnight data with focus firmly on the broader USD move.
• SEK was unfased by soft-headline but hot-core vs exp. CPIF metrics, though this has prompted SEB to raise the risk of a 100bp Riksbank hike.
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Notable FX Expiries, NY Cut:

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FIXED INCOME

• BTPs are leading the fixed income complex with upside in excess of a point to a session peak of 117.26 vs trough 116.04 on supply-side dynamics.
• Bunds are similarly bid though to a lesser extent than periphery counterparts, having incrementally surpassed yesterday's 139.26 peak.
• Well-received German 7yr supply sparked limited upside while a softer UK outing caused Gilts to temporarily pullback to near-unchanged.
• USTs move in tandem with EGBs with yields lower as such in wake of Fed's Brainard, who backed the FOMC downshifting to a lower increment of rate hikes in December.
• Retail orders for the November 2028 BTP Italia reach EUR 4bln, via Reuters citing Bourse data.
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COMMODITIES

• Crude benchmarks are pressured with the overarching COVID headwind weighing on the demand side and overshadowing any potential upside from the USD & G20.
• Currently, WTI Dec’22 and Brent Jan’23 are lower by just over USD 1/bbl and have printed fresh November troughs of USD 84.06/bbl and USD 91.52/bbl respectively.
• IEA Monthly Oil Market Report: 2023 global oil output is to grow 740k BPD to 100.7mln BPD. Demand growth will slow to 1.6 mb/d in 2023, down from 2.1 mb/d this year, as mounting economic headwinds impede gains.
• Russia is reportedly expected to agree to extend the Black Sea grain-export deal, via Bloomberg. Subsequently, Russia says it will announce its decision on extension of Black Sea grains deal in an appropriate time, TASS reports.
• Precious metals have lost their initial shine but spot gold remains in proximity to yesterday's USD 1775/oz high.
• Ags. are in focus on the above reports, though initial pressure has eased a touch as Russia says it will make a decision at an appropriate time.
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CRYPTO

• BlockFi denied rumours that all or a majority of its assets are custodied at FTX. Most activity at the crypto lender remains halted and withdrawals are still on pause, according to CoinDesk.

NOTABLE EUROPEAN HEADLINES

• UK PM Sunak will accept an official recommendation to increase the living wage from GBP 9.50 an hour to about GBP 10.40 an hour — a rise of nearly 10%, according to The Times.
• UK Chancellor Hunt is considering a 40% windfall tax on "excess returns" made by electricity generators as part of his Autumn Statement, according to Bloomberg sources.
• ECB's Villeroy said ECB will probably continue to hike rates but may do so in a more flexible and less rapid manner; jumbo hikes will not become a new habit. We are clearly approaching the normalisation range of around 2%, via Reuters.
• EU Parliament and member states agreed on an EU budget for 2023, according to dpa.
• G20 draft declaration noted that central banks will continue to appropriately calibrate the pace of monetary policy tightening, via Reuters.

NOTABLE EUROPEAN DATA

• UK ILO Unemployment Rate (Sep) 3.6% vs. Exp. 3.5% (Prev. 3.5%); Employment Change (Sep): -52k vs Exp. -25k (prev. -109k)
• UK Average Earnings (Ex-Bonus) (Sep) 5.7% vs. Exp. 5.5% (Prev. 5.4%); Average Week Earnings 3M YY (Sep) 6.0% vs. Exp. 5.9% (Prev. 6.0%)
• German ZEW Economic Sentiment (Nov) -36.7 vs. Exp. -50.0 (Prev. -59.2); Current Conditions (Nov) -64.5 vs. Exp. -68.4 (Prev. -72.2)

NOTABLE US HEADLINE

• Fed's Barr (voter) said inflation is far too high, the Fed is heightening its focus on liquidity, credit, and interest rate risks. Barr said the US economic outlook has weakened amid tighter financial conditions and added that the Fed is reviewing the stance of banking mergers to see if any adjustments to the Fed approach are appropriate.
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G20

• Australian PM says there were positive discussions on trade embargoes levelled on Australia by China. Adds, the meeting with Chinese President Xi was another important step towards stabilising the relationship, will cooperate where possible with China. Many steps yet to take.
• Chinese President Xi says Sino-Australian relations have encountered difficulties in recent years and this is not what we wanted to see, according to State Media
• Russian Foreign Minister Lavrov says he has proposed to the G20 the removal of discriminatory barriers on energy markets; UN will deal with the removal of barriers for Russian grain and fertilizers; the G20 draft declaration has reference to an exchange of views re. Ukraine, West added phrase that many delegations condemned Russia. Russia highlighted alterative points of view.

GEOPOLITICS

RUSSIA-UKRAINE

• Chinese President Xi said China advocates a ceasefire in the Ukraine crisis and calls for peace talks, via state media.

OTHER

• Chinese President Xi told US President Biden that China will make all efforts for peaceful "reunification" with Taiwan, according to the Chinese Foreign Minister. China upholds the "one country, two systems" proposal for Taiwan, according to Reuters
• Chinese President Xi told French President Macron that China and Europe should expand two-way trade and investments, via state media.

APAC TRADE

EQUITIES

• APAC stocks traded mixed following a weak lead from Wall Street with newsflow also quiet overnight.
• ASX 200 saw pressure from its Metals & Mining sector, whilst the RBA minutes provided little in terms of hints for the upcoming meeting and left all options open.
• Nikkei 225 saw some downside after Q3 Japanese GDP unexpectedly fell into contraction, but losses were trimmed as the JPY weakened.
• KOSPI was contained whilst Taiwan’s Taiex outperformed as TSMC was boosted by a Berkshire Hathaway stake in the name.
• Hang Seng and Shanghai Comp cheered the meeting between US President Biden and Chinese President Xi, which was telegraphed as candid, whilst Chinese stocks saw little action to the Retail Sales contraction and sub-forecast IP metrics.

NOTABLE ASIA-PAC HEADLINES

• China reports 1,661 new confirmed COVID cases in mainland (prev. 1,794 a day earlier), via Reuters.
• PBoC injected CNY 850bln via 1yr MLF at a maintained rate of 2.75%; PBoC injected CNY 172bln via 7-day reverse repos with the rate at 2.00% for a CNY 170bln net injection.
• PBoC said longer-term fund injection exceeds Nov MLF maturities, according to Bloomberg.
• Chinese Vice President Wang said China will maintain strong policy continuity, according to Bloomberg.
• China's Stats Bureau said will actively expand demand, stabilise employment and prices; will consolidate the foundation of economic recovery; economic recovery slows due to COVID flare-ups, via Reuters.
• China's stats bureau spokesman said the property market shows some positive changes but the downward trend continues; expects China's CPI to remain benign, via Reuters.
• RBA Minutes said the board expects to increase interest rates further over the period ahead. Members did not rule out returning to larger increases if the situation warranted. Conversely, the Board is prepared to keep rates unchanged for a period while it assesses the state of the economy and the inflation outlook. The minutes suggested interest rates are not on a pre-set path. Expects to increase interest rates further over the period ahead, and the size and timing of future interest rate increases will continue to be determined by the incoming data. The board also conducted a forward guidance review in which forward guidance will generally be flexible and conditionality will likely focus on the Board’s policy objectives – namely, inflation and unemployment – rather than the drivers of these variables (e.g. wages). Forward guidance on interest rates will not always be provided, the Board does not intend to publish its own forecasts of the expected policy path. When policy rates are at, or near, the effective lower bound, a stronger form of forward guidance will be considered, via the RBA.
• JP Morgan lowers its 2023 FY Chinese growth forecast to 4% from 4.5%.

APAC DATA

• Chinese Retail Sales YY (Oct) -0.5% vs. Exp. 1.0% (Prev. 2.5%); Industrial Output YY (Oct) 5.0% vs. Exp. 5.2% (Prev. 6.3%)
• Chinese Urban Investment (YTD)YY (Oct) 5.8% vs. Exp. 5.9% (Prev. 5.9%)
• Japanese GDP QQ (Q3) -0.3% vs. Exp. 0.3% (Prev. 0.9%, Rev. 1.1%); Annualised (Q3) -1.2% vs. Exp. 1.1% (Prev. 3.5%, Rev. 4.6%)
• Japanese GDP QQ External Demand (Q3) -0.7% vs. Exp. -0.2% (Prev. 0.1%, Rev. 0.2%)
• Japanese GDP QQ Private Consumption Prelim. (Q3) 0.3% vs. Exp. 0.2% (Prev. 1.2%)
• Japanese GDP QQ Capital Expenditure (Q3) 1.5% vs. Exp. 2.1% (Prev. 2.0%, Rev. 2.4%)