• Stocks in Europe are on a mixed footing after scaling back opening gains with no clear fundamental catalyst driving price action thus far ahead of numerous events.
• Similar action in US futures with the ES back below 4k ahead of data, Fed speak and some corporate updates.
• DXY has seen an intra-day recovery from a 106.08 low to a 106.68 peak, with G10 peers now all pressured vs initial modest upside against the Greenback.
• Gilts unchanged ahead of significant fiscal changes from the UK, 10yr yield at 3.15%; USTs await Fed speak post-Waller.
• Crude benchmarks are under modest pressure given the USD recovery throughout the morning, generally softer APAC tone and a continuing deterioration to the China COVID case count weighing.
• Ags. in focus and pressured following an as-expected extension to the Black Sea grain deal.
• Looking ahead, highlights include US Building Permits, US Philly Fed, US IJC, Speeches from BoE's Pill, Fed's Bostic, Bullard, Bowman, Mester, Kashkari, Jefferson, Evans, SNB's Maechler, UK Autumn Statement at 11:30GMT.
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As of 10:40GMT/05:40ET

EUROPEAN TRADE

EQUITIES

• Stocks in Europe, Eurostoxx 50 -0.2%, are on a mixed footing after scaling back opening gains with no clear fundamental catalyst driving price action thus far ahead of numerous events.
• Stateside, futures have similarly pared back initial upside and are near the unchanged mark/marginally lower with the ES back below the 4k figure ahead of data, Fed speak and a few corporate updates.
• NVIDIA Corp (NVDA) Q1 2023 (USD): Adj. EPS 0.58 (exp. 0.69), Revenue 5.93bln (exp. 5.77bln). Data center 3.83bln (exp. 3.79bln), +30% Y/Y. Gaming 1.57bln (exp. 1.32bln), -51% Y/Y. Professional Visualization 200mln (exp. 349.1mln), -65% Y/Y. Q4 revenue view 6.00bln plus or minus 2% (exp. 6.09bln). Co. said certain export restrictions to China impacted Q3 revenue, with the decline largely offset by sales of alternative products in China.
• Cisco Systems Inc (CSCO) - Q1 adj. EPS 0.86 (exp. 0.84), Revenue 13.6bln (exp. 13.31bln). Sees Q2 revenue growth of +4.5-6.5% (exp. +4.2%), and sees Q2 adj. EPS between 0.84-0.86 (exp. 0.85). Lifts FY23 revenue growth outlook to +4.5-6.5% (prev. +4-6%, exp. +5.1%). Exec said FY23 was off to a good start, supply chain issues eased slightly in Q1. Announced restructuring plan, which will include "talent movement options". Said it would also optimise its real estate portfolio, beginning in Q2 of FY23. Expects to recognise pre-tax charges of approximately USD 600mln consisting of severance and other one-time termination benefits, real estate-related charges, and other costs.
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FX

• DXY has seen a intra-day recovery from a 106.08 low to a 106.68 peak, with G10 peers now all pressured vs initial modest upside against the Greenback.
• Fundamental driver(s) behind the move have been limited, with the sessions main events yet to come in the form of the UK budget and Central Bank speak thereafter.
• Cable has, given the USD's recovery, experienced a marked pullback from 1.1950+ best to back below the figure and almost a full point lower.
• Similarly, EUR has moved into the red though this is comparably more contained given its initial upside was capped by EUR/GBP action, action which is now marginally EUR-favourable.
• USD/CNY has reverted back to initial 7.14+ best levels after pulling back towards the figure, with the region focused on fresh COVID commentary.
• PBoC sets USD/CNY mid-point at 7.0655 vs exp. 7.0479 (prev. 7.0363)
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Notable FX Expiries, NY Cut:

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FIXED INCOME

• Gilts unchanged ahead of significant fiscal changes from the UK, USTs await Fed speak post-Waller.
• Currently, the UK benchmark resides at the lower-end of 106.32-107.17 parameters with the associated 10yr yield at 3.15%; a figure that is only 15bp above the current BoE base rate and significantly shy of the 4.632% peak seen in wake of the former PM/Chancellor’s ‘mini-Budget’.
• EGBs and USTs are holding in similarly contained ranges around the unchanged mark; currently, +14 and -9 ticks respectively, with focus on the hefty Central Bank docket.
• Italy maintains the new BTP Italia bond real annual coupon at 1.6%.
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COMMODITIES

• Crude benchmarks are under modest pressure given the USD recovery throughout the morning, generally softer APAC tone and a continuing deterioration to the China COVID case count weighing.
• Ags. in focus and pressured following a as-expected extension to the Black Sea grain deal.
• Currently, the yellow metal is holding around the lower-end of USD 1761-1774/oz parameters, and is thus a similar distance from the WTD peak of USD 1786/oz and the 10-DMA at USD 1738/oz.
• TC Energy's Keystone oil pipeline issues were resolved after force majeure, but TC Energy will reduce injections for the rest of November, according to Reuters sources.
• Ukrainian Infrastructure Minister says the Black Sea grain initiative will be extended for 120-days, via Reuters; Russia will not cut off the Black Sea grain deal, via Tass citing the Deputy Foreign Minister.
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NOTABLE EUROPEAN HEADLINES

• UK is to reportedly spend billions on energy efficiency to cut demand by 13%, according to Bloomberg.

NOTABLE EUROPEAN DATA

• EU HICP Final YY (Oct) 10.6% vs. Exp. 10.7% (Prev. 10.7%); X Food & Energy Final YY (Oct) 6.4% vs. Exp. 6.4% (Prev. 6.4%)

NOTABLE US HEADLINE

• US Republicans have won control of the US House by a slim margin, according to NBC and CNN.
  • Click here for the US Early Morning note.

GEOPOLITICS

Chinese President Xi may visit Russia in 2023; government heads could have call in December, according to Tass.

• North Korea fired an unspecified ballistic missile toward East Sea, according to the South Korean military cited by Yonhap.
• North Korea said the recent South Korea, US, and Japan summit would lead the Korean peninsula to an even more unpredictable situation, according to KCNA.
• South Korean and US militaries conducted missile defence drills following the North Korean missile launch, according to the South Korean military.
• UK blocked Chinese takeover of Newport chip plant, ordering Chinese-owned Nexperia to sell at least 86% of the factory in order to mitigate risk to national security, according to FT.
• China's President Xi said China is willing to increase imports from Italy, according to CCTV.
• Turkish President Erdogan expects issues around the US F-16 jet purchases to resolve soon, via Reuters.

APAC TRADE

EQUITIES

• APAC stocks traded mostly lower throughout the session following the downbeat lead from Wall Street.
• ASX 200 was the relative outperformer with gains lead but the Consumer Staples and IT sector, with no reaction seen in wake of the Aussie jobs data.
• Nikkei 225 traded on either side of the 28k mark before stabilising under the round figure, with losses modest during the session.
• KOSPI gave up earlier gains and drifted lower throughout the session with losses led by the chip and IT sectors, whilst sentiment in the region was soured by North Korea firing a short-range ballistic missile.
• Hang Seng and Shanghai Comp opened with and then extended on losses with the former seeing downside in Meituan, which fell around 6% after Tencent announced a special dividend in the form of Meituan shares, whilst People's Daily also suggested China is able to achieve COVID Zero as mainland cases roses at the fastest pace since April.

NOTABLE ASIA-PAC HEADLINES

• China reported 2,388 (prev. 1,623) new confirmed coronavirus cases in the mainland on Nov 16th, via Reuters
• China is able to achieve COVID Zero, according to People's Daily.
• China has asked banks to report on liquidity following the sudden bond rout, according to Bloomberg.
• PBoC injected CNY 132bln via 7-day reverse repos with the rate at 2.00% for a CNY 123bln net injection.
• Tokyo to raise COVID alert level by one notch amid the recent rise in COVID cases, according to NTV.
• BoJ Governor Kuroda said it is important to continue monetary easing to support the economy. Kuroda said recent price hikes are due to cost-push factors, according to Reuters. Kuroda said BoJ will closely coordinate with the government to conduct appropriate policy.
• Senior BoJ official Uchida said it is too early to discuss the exit from monetary stimulus, via Reuters.
• Saudi Arabia signed USD 30bln worth of investment agreements with South Korean firms, covering clean energy and medical tech, according to the Saudi Investment Minister
• China's Commerce Ministry, on China-US economic & trade dialogue, says will implement the key consensus reached by leaders, domestic exports/imports will see greater pressure.

APAC DATA

• New Zealand PPI - Outputs QQ (Q3) 1.6% (Prev. 2.4%); Inputs QQ (Q3) 0.8% (Prev. 3.1%)
• Japanese Trade Balance Total Yen (Oct) -2162.3B vs. Exp. -1610.0B (Prev. -2094.0B, Rev. -2094.3B)
• Japanese Imports YY (Oct) 53.5% vs. Exp. 49.7% (Prev. 45.9%, Rev. 45.7%); Exports YY (Oct) 25.3% vs. Exp. 28.1% (Prev. 28.9%)
• Japanese Foreign Investment Japanese Stock w/e 556.6B (Prev. 340.0B, Rev. 333.7B)
• Japanese Foreign Bond Investment w/e -123.9B (Prev. -581.8B, Rev. -574.5B)
• Australian Participation Rate (Oct) 66.5% vs. Exp. 66.6% (Prev. 66.6%); Unemployment Rate (Oct) 3.4% vs. Exp. 3.6% (Prev. 3.5%)
• Australian Employment (Oct) 32.2k vs. Exp. 15.0k (Prev. 0.9k); Full Time Employment (Oct) 47.1k (Prev. 13.3k)