• APAC stocks took impetus from the positive handover from Wall St where sentiment was underpinned amid a global risk revival.
• European equity futures were modestly higher with the Euro Stoxx 50 future +0.3% after cash markets closed up by 0.5% yesterday.
• DXY trades flat just above the 107 mark, EUR/USD is back on a 1.03 handle, NZD is firmer post-RBNZ.
• The RBNZ delivered a historic 75bps rate hike and raised its peak OCR forecasts to 5.50% from 4.10%.
• Looking ahead, highlights include EZ, UK & US Flash PMIs, US Durable Goods, IJC, New Home Sales, FOMC Minutes, Speeches from ECB's de Guindos & BoE's Pill, Supply from the UK & Germany.

US TRADE

• US stocks gained and commodities rose throughout the session amid a softer dollar and lower yield environment to reverse Monday's price action despite the lack of an obvious catalyst, while focus stateside shifts to the upcoming FOMC Minutes and a slew of data releases ahead of the Thanksgiving holiday.
• SPX +1.36% at 4,003, NDX +1.48% at 11,724, DJIA +1.18% at 34,098, RUT +1.16 at 1,860.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's George (voter, departing 2023) said US house prices remain above pre-pandemic trend and can argue it is partly due to QE, while she added that it could take a higher interest rate for some time to convince households to hold on to savings. Furthermore, George said current data suggests savings are elevated across the spectrum, but lower-income households are running down their buffers more quickly.
• White House is to extend the student loan repayment halt up to June 30th, according to Bloomberg.

APAC TRADE

EQUITIES

• APAC stocks took impetus from the positive handover from Wall St where sentiment was underpinned amid a global risk revival despite the lack of fresh catalysts but with upside capped amid Japan's holiday closure, tighter COVID rules in China and following the RBNZ's historic rate hike.
• ASX 200 was led by strength in the mining-related industries and with the energy sector front running the advances although the index is limited by underperformance in tech.
• NZX 50 was the laggard following the RBNZ’s 75bps rate hike and hawkish revisions to its OCR view which it now expects to peak at 5.50% (prev. 4.10% view), while the Committee had considered either a 75bps or 100bps move compared with analysts’ forecasts of either a 50bps or 75bps hike heading into the meeting.
• Hang Seng and Shanghai Comp were both higher, albeit with price action in the mainland choppy amid COVID concerns after several key cities tightened restrictions and testing requirements.
• US equity futures plateaued (ES flat) as the focus shifted towards the FOMC Minutes and pre-Thanksgiving data fest.
• European equity futures were modestly higher with the Euro Stoxx 50 future +0.3% after cash markets closed up by 0.5% yesterday.

FX

• DXY traded flat and languished near the prior day’s lows after being pressured by the heightened risk appetite and softer yield environment stateside, while the latest comments from Fed speakers didn’t provide anything incremental.
• EUR/USD marginally extended on recent advances above the 1.0300 level amid recent dollar softness and with the latest ECB commentary mixed whereby officials suggested either a 50bps or 75bps hike next month.
• GBP/USD stalled after it briefly reclaimed the 1.1900 status where it then met resistance but with the pullback limited after reports noted a GBP 15bln reduction to the maximum authorised size of the BoE's APF.
• USD/JPY rebounded from a floor around the 141.00 level but with upside capped in holiday-thinned trade.
• Antipodeans were mixed with NZD/USD lifted after the RBNZ delivered a historic 75bps rate hike and raised its peak OCR forecasts to 5.50% from 4.10%, while the Committee even considered a 100bps move.
• PBoC set USD/CNY mid-point at 7.1281 vs exp. 7.1307 (prev. 7.1667)
• Brazilian President Bolsonaro filed a complaint with the electoral court requesting extraordinary verification of the 2022 election, according to Reuters citing a document.

FIXED INCOME

• 10yr UST futures took a breather after the recent bull flattening following a duration grab, while overnight price action was restricted owing to the holiday in Japan.
• Bund futures were confined to a tight range after yesterday’s intraday rebound and mixed ECB rhetoric.

COMMODITIES

• Crude lacked direction with tailwinds from the positive risk tone offset by China's COVID woes, while bullish private inventory data had little lasting impact on prices in the backdrop of deliberations on energy price caps.
• US Private Energy Inventory Data (bbls): Crude -4.8mln (exp. -1.1mln), Cushing -1.4mln, Gasoline -0.4mln (exp. +0.4mln), and Distillate +1.1mln (exp. -0.6mln).
• OPEC+ delegates said Saudi's denial of a production increase at the December meeting reflected an unease with public discussion of the group's decision-making before an agreement with Russia was struck, according to WSJ.
• Western allies are set to agree on a Russian oil price cap on Wednesday ahead of a December 5th start date with officials discussing setting the price cap at around USD 60/bbl but could be as high as USD 70/bbl, according to WSJ.
• EU reportedly prepares to soften the Russian oil price cap plan ahead of approval, according to Bloomberg. It was separately reported that "several" EU diplomats told the FT that the EU Commission's EUR 275/MWh gas price cap proposal is far too high for their governments to accept and one said that setting it higher than EUR 250/MWh "is just another way of killing the cap".
• US Treasury Department issued new guidance on the implementation of a price cap policy for Russian crude and said the price cap will be set after a technical exercise is conducted by the price cap coalition. A Treasury official also noted hopes that the EU price cap consultation is concluded relatively soon to allow the coalition to announce a price, while the official added there is no reason to expect Russia will retaliate to a price cap by cutting oil output and warned that violation of price cap could be subject to civil or criminal penalties, according to Reuters.
• Spot gold was subdued.
• Copper marginally declined in tandem with the uninspired performance across the commodities complex with price action not helped by the tighter COVID restrictions and requirements in China.

CRYPTO

• Bitcoin continued to claw back recent losses and tested USD 16,500 amid the constructive tone.
• New York enacted a 2-year ban on some crypto mining operations, according to NYT.

NOTABLE ASIA-PAC HEADLINES

• PBoC adviser Wang Yiming sees China's 2023 GDP growth to likely be above 5% if the impact of COVID ends but noted growth will depend on the rollout of support measures and that support measures are needed to lift market confidence and consumption. Wang stated there is limited room for China to cut interest rates and slower Fed hikes in H1 2023 will provide China with more policy room.
• Shenzhen will require 48-hour COVID tests to access public venues and Chengdu will conduct mass testing on November 23rd-27th, while Tianjin is to conduct complete city testing on November 24th-25th.
• RBNZ hiked the OCR by 75bps to 4.25%, as expected, while it stated that monetary conditions need to tighten further and that the Committee considered a 75bps or 100bps rate increase. RBNZ said consumer price inflation is too high and the Committee agreed the OCR needs to reach a higher level and sooner than previously indicated. Furthermore, the RBNZ noted near-term inflation expectations have risen and it raised its OCR projections with the OCR expected to peak at 5.5% by December 2023 vs prev. forecast of 4.10%.
• RBNZ Governor Orr said during the press conference that there will be a shallow recession but noted economic activity remains high and spending is strong, while the RBNZ also noted that they are mature in the tightening cycle and closer to the end than the beginning but added that new shocks are arriving all the time.

DATA RECAP

• Singapore GDP QQ (Q3 F) 1.1% vs Exp. 1.3% (Prelim. 1.5%)
• Singapore GDP YY (Q3 F) 4.1% vs Exp. 4.3% (Prelim. 4.4%)

GEOPOLITICS

RUSSIA-UKRAINE

• Ukraine's Foreign Minister Kuleba said Russia is not ready for peace talks and is looking to buy time.

EU/UK

NOTABLE EU/UK HEADLINES

• UK Chancellor Hunt and BoE Governor Bailey are to reduce the maximum authorised size of the APF to GBP 871bln (prev. GBP 886bln), according to a BoE statement.
• Moody's said the UK government set out an ambitious consolidation plan but added that low confidence in the delivery hampers its credibility, according to Reuters.