• European bourses have experienced a firm bounce throughout the morning, Euro Stoxx 50 +1.2%, one which has occurred without a clear fundamental driver.
• Stateside, performance is much the same though magnitudes are a touch more contained, ES +0.6%.
• Core benchmarks are under notable pressure, downside which seemingly commenced without a clear catalyst or driver and prior to the latest remarks from ECB’s Lagarde & TLTRO.III repayment
• DXY has continued to consolidate on a 106 handle within 106.32-106.78 parameters with peers mostly firmer vs USD.
• Crude benchmarks are little changed in what has until recently been a quiet session before the latest China-COVID developments

LOOKING AHEAD

• Fed's Collins, BoE's Haskel, Sovereign Debt Ratings for Portugal, South Africa, Turkey, Italy and Sweden.

EUROPEAN TRADE

EQUITIES

• European bourses have experienced a firm bounce throughout the morning, Euro Stoxx 50 +1.2%, one which has occurred without a clear fundamental driver.
• Stateside, performance is much the same though magnitudes are a touch more contained, ES +0.6%.
• Foxconn (2317 TT) has suspended hiring for three days in China's Zhengzhou amid limited quarantine capacity, according to local recruitment agents cited by SCMP.
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FX

• DXY has continued to consolidate on a 106 handle within 106.32-106.78 parameters after venturing as high as 107.25 yesterday.
• EUR/USD back on a 1.03 handle and nearing the 1.04 mark as the USD struggles to pick up; though, EUR/GBP is hindering the single currency.
• Cable resides in proximity to the 1.19 mark and has pared the post-Budget downside, with this relative strength seemingly a factor of EUR/GBP action as well.
• Antipodeans continue to outperform with no overt driver behind the upside and seemingly unfased by the China COVID updates before next week's RBNZ.
• PBoC set USD/CNY mid-point at 7.1091 vs exp. 7.0905 (prev. 7.0655)
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Notable FX Expiries, NY Cut:

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FIXED INCOME

• Core benchmarks are under notable pressure, downside which seemingly commenced without a clear catalyst or driver and prior to the latest remarks from ECB’s Lagarde in what has been an otherwise relatively contained session.
• Further pressure was seen following Lagarde; though, much of this has been pared following a smaller than expected TLTRO repayment figure for the first additional window.
• USTs are in-fitting with EGB peers and holding towards the lower-end of 112.06+ to 112.5 parameters, with Fed’s Collins (2022 voter) the only speaker on today’s docket from the Fed and follow’s Kashkari’s (2023 voter) pushback on the singular CPI print.
• ECB TLTRO.III November 23rd window repayment figure (EUR): 296bln vs exp. 600bln (range, 200bln to 1.5tln)
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COMMODITIES

• Crude benchmarks are little changed in what has until recently been a quiet session for the most part, once again the USD has dictated the bulk of the price action.
• While the USD’s downside has been supportive for much of the session, this has now been superseded by the latest negative China-COVID developments.
• As it stands, WTI Dec’22 and Brent Jan’23 are lower by around USD 0.10/bbl and reside around USD 0.30/bbl from overnight lows.
• Spot gold and silver are modestly firmer given the USD’s failure to gain a positive foothold. However, in contrast, base metals are pressured post-China COVID.
• Osaka Gas (9532 JT) President said it is highly possible that US Freeport LNG operation resumption will be delayed, via Reuters.
• ANZ raises estimate of 2023 Chinese oil demand growth to 800k BPD from 450k BPD, via Reuters.
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NOTABLE EUROPEAN HEADLINES

• ECB's Lagarde says the ECB will ensure that a phase of high inflation does not feed into inflation expectations, allowing too-high inflation to become entrenched. We expect to raise rates further – and withdrawing accommodation may not be enough.

NOTABLE EUROPEAN DATA

• UK GfK Consumer Confidence (Nov) -44 (Prev. -47.0)
• UK Retail Sales MM (Oct) 0.6% vs. Exp. 0.3% (Prev. -1.4%, Rev. -1.5%); Ex-Fuel MM (Oct) 0.3% vs. Exp. 0.6% (Prev. -1.5%, Rev. -1.5%)
• UK Retail Sales YY (Oct) -6.1% vs. Exp. -6.5% (Prev. -6.9%, Rev. -6.8%); Ex-Fuel YY (Oct) -6.7% vs. Exp. -6.9% (Prev. -6.2%, Rev. -6.1%)

NOTABLE US HEADLINES

• US President Biden Aides, NEC Chair Deese and CEA Chair Rouse are expected to depart in 2023, according to Bloomberg.
• General Motors (GM) expect FY22 adj. automotive FCF will increase to 10-11bln (prev. 7-9bln); 2022 adj. EBIT of 13.5-14.5bln (prev. 13-15bln); raises 2022 guidance and expects NA EV portfolio to be profitable in 2025 as annual capacity tops 1mln.
• Amazon (AMZN) said there will be more role reductions; doesn't know yet exactly how many roles will be impacted, via Reuters.
  • Click here for the US Early Morning note.

GEOPOLITICS

NORTH KOREA

• North Korea appeared to have fired an intercontinental ballistic missile (ICBM), according to Yonhap.
• North Korean missile had enough range to reach the US mainland, according to the Japanese Defence Minister.
• North Korean missile was an ICBM-class missile that flew for around 69 minutes, according to the Japanese Defence Minister; missile had a possible range of over 10,000km, via Reuters.
• North Korean missile believed to have landed inside Japan's Exclusive Economic Zone (EEZ), according to Japanese PM Kishida; no reports of damages, via Reuters.
• South Korean President Yoon has ordered to strengthen security cooperation with US and Japan following North Korea's ICBM launch, via Reuters
• US, Japan, South Korea, Australia, New Zealand and Canada will hold an emergency summit on the sidelines of APEC over North Korea's ICBM launch, according to Kyodo citing a Japanese government source
• US strongly condemns North Korea's long-range ballistic missile test, according to a statement; US will take all necessary measures to ensure the security of US, South Korea, and Japan, according to the White House.
• Japanese Chief Cabinet Secretary said Japan did not take any action to destroy the missile and hopes to keep in close contact with US and South Korea, via Reuters.
• Japanese government convened emergency gathering team following North Korea's presumed ICBM launch, according to NHK.
• South Korea to convene a National Security Council meeting over North Korea's missile launch, according to the presidential office.

OTHER

• Russian Deputy Foreign Ministry says they are ready for strategic stability meetings at higher levels, if the US is, via IFX; subsequently, Russian Kremlin says there is no talk over a potential summit between President Putin and US President Biden at this time.
• Biden admin said Saudi Prince has immunity from lawsuit in the Khashoggi killing, according to a court filing cited by Reuters.
• Chinese President Xi said Beijing is considering holding the third Belt and Road Forum for International Cooperation next year, via state media.
• Swedish prosecutor says sabotage has been confirmed at the Nord Stream pipelines, explosive remains found on the pipelines.

APAC TRADE

EQUITIES

• APAC stocks traded mostly firmer as sentiment somewhat picked up following the negative handover from Wall Street.
• ASX 200 was lifted by gains in its heavy-weight financials sector, whilst Oz Minerals resided as one of the winners following a sweetened takeover deal by BHP.
• Nikkei 225 briefly climbed back above 28,000 with BoJ Governor Kuroda reiterating the need for easy monetary policy, whilst Nissan shares failed to benefit from General Motors’ guidance upgrade.
• KOSPI trimmed earlier gains following reports of North Korea firing an ICBM which was in flight for 69 minutes.
• Hang Seng and Shanghai Comp were mixed with the former boosted by shares in Alibaba rising some 6% post-earnings.

NOTABLE ASIA-PAC HEADLINES

• PBoC adviser said the government should set its 2023 economic growth target no lower than 5%; adds that it is urgent for China's economic growth to return to a reasonable range, via Reuters.
• China reported 2,362 (prev. 2,388) new confirmed coronavirus cases in the mainland for November 17th.
• Beijing reported 100 new symptomatic cases (prev. 172) and 366 new asymptomatic cases (prev. 262) for November 17th.
• PBoC injected CNY 21bln via 7-day reverse repos with the rate at 2.00% for a CNY 9bln net injection.
• BoJ Governor Kuroda said Japan's core CPI is likely to slow in pace from next year; reiterated that the BoJ will maintain easy monetary policy, via Reuters. Governor Kuroda said rapid one-sided FX moves are undesirable; undesirable to tighten policy now. Kuroda sees no need to now revise the govt's and BoJ's policy mandates. Governor Kuroda said Japan has yet to see inflation hit 2% in a stable and sustained manner; the current increase in CPI is driven mostly by rising import costs, via Reuters. Kuroda said the BoJ could normalise monetary policy if the achievement of price target is in sight, which could push up cost of financing government debt.
• Senior BoJ official said recent inflation may affect next year's wage negotiations and outlook for service prices, via Reuters.
• Beijing City official says COVID cases are consistently rising and scale is expanding; encouraging residents in the Chaoyang district to stay at home over the weekend.

APAC DATA

• Japanese CPI, Core Nationwide YY (Oct) 3.6% vs. Exp. 3.5% (Prev. 3.0%); fastest pace since Feb 1982
• Japanese CPI Index Ex Fresh Food (Oct) 103.4 (Prev. 102.9); Overall Nationwide (Oct) 3.7% (Prev. 3.0%)