• European bourses have spent much of the morning fairly contained but with a gradually increasing negative bias, as the recent rally pauses amid numerous geopolitical developments.
• DXY is once again on the backfoot and sub-106.00 to the modest benefit of peers, ex-JPY.
• The bund is currently near the unchanged mark despite some fairly marked gyrations overnight and throughout the European morning amid geopols. & hot UK CPI.
• Crude benchmarks began a touch softer digesting the latest clarifications, however reports of an oil tanker attack lifted price action.
• Fed's George (voter) says Fed should continue raising rates, but Fed should slow pace of hikes, WSJ reports.
• Looking ahead, highlights include Canadian CPI, US Retail Sales and IP, BoE Treasury Select Committee, Speeches from ECB's Lagarde, Panetta, Fed's Williams, Barr, Waller, Supply from the US.

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EUROPEAN TRADE

EQUITIES

• European bourses have spent much of the morning fairly contained but with a gradually increasing negative bias, Euro Stoxx 50 -0.5%, as the recent rally pauses amid numerous geopolitical developments.
• US futures are marginally firmer, ES +0.1%, but similarly contained as the ES clings onto the 4k mark ahead of numerous metrics and more Fed speak.
• Amazon's (AMZN) retail business is reportedly bracing for a tough holiday season by "sellers for lump sums of cash and limiting inventory", according to Business Insider.
• Lowe's Companies Inc (LOW) Q3 2023 (USD): Adj. EPS 3.27 (exp. 3.10), Revenue 23.5bln (exp. 23.13bln); raises FY22 outlook
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FX

• DXY once again on the backfoot and sub-106.00 to the modest benefit of peers, ex-JPY.
• EUR/USD is the current outperformer given the soft USD with specific developments limited aside from numerous ECB speakers though largely on financial stability; currently, holding above 1.04.
• Cable briefly spiked on the hot UK CPI release, to a 1.1942 high; however, this proved shortlived given the overarching headwind of a bleak domestic outlook.
• As mentioned, JPY is the G10 laggard, with USD/JPY briefly rising as high as 140.29 though it has since managed to move back below 140.00.
• PBoC sets USD/CNY mid-point at 7.0363 vs exp. 7.0409 (prev. 7.0421)
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Notable FX Expiries, NY Cut:

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FIXED INCOME

• Bunds and Gilts are currently near the unchanged mark despite some fairly marked gyrations overnight and throughout the European morning amid the hot UK CPI metrics.
• Inflation aside, the main drivers have been on the supply side with BTPs outperforming and above 118.00 as the Futura receives demand over EUR 6bln.
• Stateside, USTs are in-fitting with EGBs and thus near the unchanged mark with yields slightly mixed and largelly unreactive to Fed's George (voter) saying the pace of hikes should slow.
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COMMODITIES

• Crude benchmarks began the session a touch softer, with participants digesting the multiple updates around the Poland missile incident and the Druzhba pipeline.
• However, the complex then spiked on the below reports of an oil tanker being attacked near Oman; sending WTI and Brent to USD 87.51/bbl and USD 94.79/bbl peaks.
• Defense Official says that an oil tanker has been struck in an exploding drone attack off Oman, amid heightened tensions with Iran, via AP's Miller. The attack happened Tuesday night off the coast of Oman, according to the official.
• US Private Energy Inventories (bbls): Crude -5.8mln (exp. -0.4mln), Cushing -0.8mln, Gasoline +1.69mln (exp. +0.3mln), and Distillate +0.9mln (exp. -0.5mln).
• Russian Kremlin says hard work continues on reviving the grain deal, if necessary President Putin and Turkish President Erdogan will coordinate within hours; Russian Finance Minister says supported an extension of the grain deal at the G20 summit, via Reuters.
• Spot gold is modestly firmer given the aforementioned geopolitical concerns and as the DXY languishes below 106.00; albeit, the yellow metal is yet to surpass Tuesday's USD 1786/oz peak.
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CENTRAL BANKS

• Fed's George (voter) says Fed should continue raising rates, but Fed should slow pace of hikes, WSJ reports. Bringing inflation down without a recession might not be feasible. Inflation is at risk of growing entrenched in the economy due to an overheated job market, and that will make it increasingly difficult for the Federal Reserve to bring inflation down without a recession.
• ECB's Muller says both 50bps and 75bps rate hikes are 'substantial', adding that he favours a 'substantial' rate hike in December.
• ECB's Visco says price growth could return to target by the end of 2024; ECB needs to continue with restrictive policy.
• ECB's de Guindos says it is difficult to have financial stability without price stability.
• ECB Euro Zone Financial Stability Review: Risks are increasing and banks may need to build up provisions.

NOTABLE EUROPEAN HEADLINES

• UK Chancellor Hunt is to give local authorities the right to raise council tax by a maximum of 4.99% from 2.99%, according to FT.
• UK regulators may require social media firms to disclose algorithms, according to the FT.

NOTABLE EUROPEAN DATA

• UK CPI YY (Oct) 11.1% vs. Exp. 10.7% (Prev. 10.1%); MM (Oct) 2.0% vs. Exp. 1.7% (Prev. 0.5%)
• UK Core CPI YY (Oct) 6.5% vs. Exp. 6.4% (Prev. 6.5%); MM (Oct) 0.7% vs. Exp. 0.6% (Prev. 0.6%)
• UK ONS House Price Index (Sep): 9.5% YY vs exp. 9.8% (rev. 13.1%).

NOTABLE US HEADLINE

• Apple (AAPL) CEO said it's made the decision to source chips from Arizona and source additional chips from Europe and is set to buy chips from the plant that opens in 2024, according to Bloomberg.
• Elon Musk said reports that SpaceX is in funding talks that would value it over USD 150bln is false.
• US Republicans won control of the US House of Representatives, according to Decision Desk HQ.
• Former US President Trump filed a statement of candidacy for the 2024 presidential bid, according to Bloomberg.
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GEOPOLITICS

RUSSIA-UKRAINE

• Polish Foreign Ministry said a "Russian-made" rocket landed in a Polish village at 15:40 local time; Poland has summoned the Russian ambassador, via Reuters.
• US officials said initial findings suggest the missile that hit Poland was fired by Ukrainian forces at an incoming Russian missile, according to AP
• US President Biden said the missile that hit a Polish village near the border with Ukraine was probably not launched from Russian territory, citing information on the rocket's trajectory, via dpa.
• US President Biden said leaders will determine the next steps after finding out what happened in Poland, and added that Russia continues to escalate its attacks in Ukraine.
• Polish President said there is no definitive evidence of who fired the rocket that fell onto the village, and added that what happened was a one-off incident and there are no indications that it will happen again, via Reuters.
• Local Polish media reports citing sources said what hit Przewowo is most likely the remains of a rocket shot down by the Armed Forces of Ukraine, via Radio Zet.
• Polish PM said they are working to establish the cause of the explosion in the village near the border with Ukraine, and decided to increase monitoring of air space, according to Reuters.
• Kremlin spokesperson said he has no information on the incident in Poland, via Reuters.
• Ukraine's President Zelenskiy said Russian missiles have struck Poland; strikes on NATO territory a significant escalation and action is required, via Reuters.
• Polish President said it is very likely that Poland will activate Article 4 of the NATO Treaty on Wednesday at the NATO meeting, via Reuters. Subsequently, reports via local press indicate that Poland will not request the Article 4 activation. A view the Polish PM has since intimated as well.
• NATO ambassadors to meet on Wednesday at Poland's request on the alliance's Article 4, according to European diplomats cited by Reuters. NATO SecGen to brief at 11:30GMT/06:30ET.
• US President Biden told the G7/NATO that the Poland blast was caused by Ukrainian air defence missile, via Reuters citing a NATO source.

OTHER

• UK PM Sunak is to meet Chinese President Xi on the sidelines of G20, according to Politico; meeting has subsequently been cancelled, due to the emergency meeting re. Poland.
• WTO Chief said risks to 2023 global trade forecasts are on the downside; said the US is actively consulting with WTO members informally on dispute settlement system reform - hopeful of a breakthrough next year, via Reuters.

APAC TRADE

EQUITIES

• APAC stocks traded lower throughout the session but climbed off session lows as markets juggled the US PPI data with the latest geopolitical development.
• ASX 200 was pressured by its heavyweight Financials sector, with losses also seen across gold miners.
• Nikkei 225 briefly fell back under the 28k mark but losses were cushioned by the weaker JPY, whilst machinery names were after the Japanese government cutting its machinery orders assessment.
• KOSPI conformed to the downbeat tone across the region with the heaviest losses seen across the electronics and construction sectors.

NOTABLE ASIA-PAC HEADLINES

• China's state planner said growth stabilisation policies will take effect in Q4, will actively expand effective investment and speed up consumption recovery in key sectors, via Reuters.
• China reported 1,623 (prev. 1,661) new coronavirus cases in the mainland for Nov 15
• China's Beijing reported 197 new local symptomatic cases (vs 303 the prior day)
• Shanghai Disney said parts of the resort will resume operations on Nov 17th; Disneyland Park will remain closed until further notice, via Reuters.
• Xinjiang's Yining announced on Tue life & production will return to normal, after successfully curbing the latest COVID 19 spread, according to Global Times.
• PBoC injected CNY 71bln via 7-day reverse repos at a maintained rate of 2.00% for a CNY 63bln net injection.
• PBoC Governor Yi said talks with US Treasury Secretary Yellen were candid and constructive, via Bloomberg.
• US Treasury Secretary Yellen and PBoC Governor Yi discussed macroeconomic and financial developments, high and volatile commodity prices, the sides exchanged macroeconomic views outlooks of US and China. Yellen noted that she looks forward to future engagements with the Chinese side, according to the Treasury Department.

APAC DATA

• Japanese Machinery Orders MM (Sep) -4.6% vs. Exp. 0.7% (Prev. -5.8%); YY (Sep) 2.9% vs. Exp. 7.4% (Prev. 9.7%)
• Australian Westpac Leading Index (Oct) -0.1% (Prev. -0.1%)
• Australian Wage Price Index QQ (Q3) 1.0% vs. Exp. 0.9% (Prev. 0.7%, Rev. 0.8%); YY (Q3) 3.1% vs. Exp. 3.0% (Prev. 2.6%)
• Chinese House Prices YY (Oct) -1.6% (Prev. -1.5%)