• APAC stocks traded cautiously after the lacklustre handover from Wall St where the major indices were subdued; Hong Kong outperformed 
• European and US equity futures lacked firm direction despite an earlier approach towards the prior day's lows
• DXY was marginally higher overnight, G10s were mostly lower, and the JPY lagged
• US Energy Envoy Hochstein said the US still needs to replenish the SPR for the long-term
• Looking ahead, highlights include US Initial Jobless Claims & Speech from ECB's Lagarde
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US TRADE

• US stocks were subdued in choppy ranges amid deflationary data and comments from Russian President Putin that Russia considers nuclear weapons a response to an attack.
• SPX -0.18% at 3,934, NDX -0.45% at 11,497, DJIA flat at 33,597, RUT -0.61% at 1,801.
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NOTABLE HEADLINES

• US President Biden's administration will appeal to keep COVID-era border restrictions in place following a court order, according to Reuters.
• Democrats reportedly plan to release their government funding proposal on Monday, with talks seriously stalled, according to Politico.

APAC TRADE

EQUITIES

• APAC stocks traded cautiously after the lacklustre handover from Wall St where the major indices were subdued as participants digested deflationary data and Russian President Putin's nuclear rhetoric.
• ASX 200 was led lower by underperformance in the energy sector after oil prices recently slipped to a YTD low and with sentiment not helped by a monthly contraction in both export and imports, as well as the failure of takeover talks between Link Administration and suitor Dye & Durham.
• Nikkei 225 traded negatively amid reports that the government is to propose a JPY 1tln tax income increase to fund national defence, while data releases were uninspiring as it surprisingly showed the first Current Account deficit since June and although Q3 GDP was revised higher, it remained in negative territory.
• Hang Seng and Shanghai Comp were mixed with the Hong Kong benchmark buoyed by strength in casino names on the reopening play as Hong Kong is said to be considering easing COVID testing rules for arrivals and may repeal the outdoor mask rule, while the mainland is indecisive amid trade-related headwinds with the Netherlands planning curbs on tech exports to China under an agreement with the US.
• US equity futures lacked firm direction despite an earlier approach towards the prior day's lows.
• European equity futures were slightly lower with the Euro Stoxx 50 future down 0.3% after the cash market closed with losses of 0.5% yesterday.

FX

• DXY was marginally higher overnight and clawed back some of the losses seen in the aftermath of the US Labour Cost data which was revised to much lower than expected and had subsequently weighed on yields.
• EUR/USD was stuck near the 1.0500 level after having faded the advances from the slight upward revision to EU GDP and hawkish remarks from ECB's Kazimir who noted one inflation figure is not sufficient to slow rate hikes.
• GBP/USD marginally pulled back after it failed to sustain the 1.2200 handle with newsflow from the UK relatively light and as the nation braces for this month’s strike chaos.
• USD/JPY rebounded with price action influenced by yield differentials and after soft data releases.
• Antipodeans were kept rangebound amid the cautious risk tone and mixed trade data from Australia.
• PBoC set USD/CNY mid-point at 6.9606 vs exp. 6.9603 (prev. 6.9975)

FIXED INCOME

• 10yr UST futures trickled lower overnight and gradually faded some of the prior day’s advances which had been spurred by disinflationary US Labour Cost data and the nuclear rhetoric from Russian President Putin.
• Bund futures traded rangebound with price action contained following the marginal EU GDP upward revision and hawkish comments from ECB’s Kazimir
• 10yr JGB futures were lacklustre with slight pressures seen in the aftermath of mixed 5yr JGB auction results.

COMMODITIES

• Crude found mild reprieve from recent selling pressure but with the rebound only marginal owing to the flimsy risk appetite and after the bearish product components in the latest DoE inventory report.
• US Energy Envoy Hochstein said the US still needs to replenish the SPR for the long-term and had created the environment for oil producers, while he added producers should increase production and he expects increases in oil output in H1 2023, according to Bloomberg.
• US Deputy Treasury Secretary told the Turkish Deputy Foreign Minister in a call that the price cap on Russian oil does not mean additional checks on ships passing through Turkish waters.
• Spot gold traded flat with price action contained as the dollar nursed recent losses.
• Copper languished at its lowest levels in nearly a month amid the cautious mood.

CRYPTO

• Bitcoin traded slightly lower amid the cautious mood and after failing to sustain the USD 17,000 level.
• US federal prosecutors are investigating whether Sam Bankman-Fried and his hedge fund orchestrated trades that led to the collapse of two cryptocurrencies in May, according to NYT.
• It was initially reported that US House Finance Services Chair Waters doesn't plan to subpoena Sam Bankman-Fried to testify at the hearing on FTX's collapse, although Waters later denied the report.

NOTABLE ASIA-PAC HEADLINES

• Hong Kong is said to be considering easing COVID testing rules for arrivals and may repeal the outdoor mask rule, while it was separately reported that Hong Kong is expected to decrease the isolation period for COVID patients and close contacts from 7 days to 5 days, according to Reuters.
• China's securities regulator reportedly advised insurers to purchase bonds from banks as investors withdraw, according to NYT.
• Netherlands is planning curbs on tech exports to China under an agreement with the US, according to Bloomberg.

DATA RECAP

• Japanese GDP QQ (Q3) -0.2% vs. Exp. -0.3% (Prev. -0.3%)
• Japanese GDP Annualised (Q3) -0.8% vs. Exp. -1.1% (Prev. -1.2%)
• Australian Trade Balance (AUD)(Oct) 12.2B vs. Exp. 12.1B (Prev. 12.4B)
• Australian Goods/Services Exports (Oct) -1% (Prev. 7%)
• Australian Goods/Services Imports (Oct) -1% (Prev. 0%)

CENTRAL BANKS

• Brazilian Central Bank maintained the Selic rate at 13.75%, as expected, while it will remain vigilant and assess if the strategy of maintaining the Selic rate for a sufficiently long period will be enough to ensure the convergence of inflation. BCB also stated that it will persist in its strategy until it consolidates disinflation and anchoring expectations around its targets, while it will not hesitate to resume the tightening cycle if the disinflationary process does not proceed as expected.
• Polish Central Bank kept the Base Rate unchanged at 6.75%, as expected. Poland’s central bank reiterated it may intervene in the FX market and that the return of CPI to target will be gradual, while upcoming decisions will depend on inflation and economic activity.
• Peru Central Bank raised the reference rate by 25bps to 7.50%, as expected.

GLOBAL

• Peru's Castillo ordered to dissolve Congress and called for elections as soon as possible. However, Peru's Congress voted to remove Castillo in an impeachment trial and Dina Boluarte was sworn in as the nation's first female president, while the public ministry said former President Castillo was detained and is accused of rebellion

GEOPOLITICS

RUSSIA-UKRAINE

• EU sanctioned roughly 200 more individuals and entities over Russia and is reportedly planning to issue more measures against Russia's energy and mining sectors.
• German Chancellor Scholz said the risk of Russia using nuclear weapons has decreased, according to Funke Media.

OTHER

• Taiwan Defence Ministry said 9 Chinese air force planes crossed the Taiwan Strait median line during the past 24 hours, according to Reuters.

EU/UK

NOTABLE HEADLINES

• UK PM Sunak refused to rule out a ban on strikes by emergency services and said he will do what is needed to keep the public safe during ongoing industrial action as he threatens tougher laws, according to Sky News.
• UK RMT Union said the planned industrial action for RMT train operating Co. members will go ahead as scheduled.
• UK's Unite union said around 146 members will begin strike action at Petrofac's (PFC LN) Repsol (REP) installation on December 8th and 9th over pay and working terms, while 76 members at BP (BP/ LN) installations are to strike over working rotation, according to Reuters.
• UK banks agreed to offer specific help to mortgage borrowers including extending a loan or lowering monthly payments after meeting with UK Chancellor Hunt, according to Reuters.
• ECB staff in a pay dispute are to hold talks about a potential strike, according to FT.

DATA RECAP

• UK RICS Housing Survey* (Nov) -25 vs. Exp. -10 (Prev. -2)