• European bourses and US futures are under pressure, seemingly in a second wave of the post-FOMC price action.
• USD has continued to climb throughout the morning, DXY above 104.40 at best with peers dented across the board
• SNB & Norges Bank were essentially in-line with expectations, hiking by 50bp & 25bp respectively.
• Gilts continue to outperform and leading a relative 'revival' in the debt space, though USTs and Bunds are yet to make any real ground above neutral
• Crude benchmarks are flat, having pared a bulk of the APAC losses with the move coming in spite of the above action
• Looking ahead, highlights include US IJC, Retail Sales & Industrial Production, BoE, ECB, Banxico Policy Announcements, European Council Meeting (1/2), Press Conference from ECB's Lagarde.
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EUROPEAN TRADE

CENTRAL BANKS

• Swiss SNB Policy Rate (Q4) 1.00% vs. Exp. 1.00% (Prev. 0.50%); cannot be ruled out that further hikes will be necessary. Willing to intervene in FX as necessary. Inflation forecasts cut, implying Switzerland is at the peak level. Click here for full details & analysis.
• SNB's Jordan (press conference) says we have sold foreign currency in recent months to ensure appropriate monetary conditions. Willing to buy/sell foreign currency as necessary.
• Norges Bank Policy Announcement (Dec): 2.75% vs. Exp. 2.75% (Prev. 2.50%); policy rate will most likely be raised further in Q1 2023. Inflation forecasts lifted, Repo Path forecasts tweaked but little changed, implying another 25bp move with some optionality for further tightening, if needed. Click here for full details & analysis.

EQUITIES

• European bourses and US futures under pressure, seemingly in a second wave of the post-FOMC price action after action stabilised a touch overnight.
• Currently, Euro Stoxx 50 -1.3% and ES -1.0%, with non-Central Bank updates relatively thin ahead of key US data and more Policy Announcements.
• Foxconn (2317 TT) has ended most closed-loop restrictions in 'iPhone city' ( Zhengzhou) , via Bloomberg.
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FX

• USD has continued to climb throughout the morning, DXY above 104.40 at best.
• Action which has weighed on peers across the board, with EUR/USD and Cable testing 1.06 and 1.23 to the downside ahead of ECB & BoE.
• Antipodeans are at the bottom of the G10 pile irrespective of upbeat macro news.
• NOK undermined post-Norges Bank despite initial fleeting upside as the Bank guides towards further tightening, despite the domestic headwind.
• CHF similarly dented in a 'buy the rumour, sell the fact' style following the as-expected SNB and as the inflation forecasts show the economy at the peak, perhaps limited the need for further tightening.
• PBoC set USD/CNY mid-point at 6.9343 vs exp. 6.9325 (prev. 6.9535)
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Notable FX Expiries, NY Cut:

• EUR/USD: 1.0415-30 (1.06BN), 1.0450 (1.93BN), 1.0500 (237M), 1.04530 (201M), 1.0550 (426M), 1.0570-80 (419M), 1.0600 (337M), 1.0700 (1.15BN)
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FIXED INCOME

• Gilts continue to outperform and lead the complex's revival, with Bunds and USTs lifting in turn though are comparably more contained and yet to make any real foray into positive territory.
• USTs appear to be guided by the risk tone and ongoing curve flattening post-Fed, with Central Bank activity since essentially in-line with expectations.
• Click here for more detail.

COMMODITIES

• Crude benchmarks are flat, having pared a bulk of the APAC losses with the move coming in spite of the downside seen across the equity complex and a firmer USD.
• TC Energy announced it communicated with regulators and customers about the restart of the Keystone pipeline system sections unaffected by the leak but noted that the affected segment remains isolated and will not be restarted until it is safe and they receive approval to do so, according to Reuters.
• Canada said it decided to revoke the time-limited Nord Stream sanctions waiver that was granted to allow turbines to be repaired in Montreal for return to Germany with the decision made working closely with Ukrainian, German and other European allies, according to Reuters.
• Spot gold and silver are unable to benefit from any traditional haven allure as the USD continues to ramp up; pressure in the yellow metal has brought it below the 10- & 200-DMAs to a test of the 21-DMA, at USD 1788/oz. 1787/oz and 1771/oz respectively.
• Click here for more detail.

NOTABLE EUROPEAN HEADLINES

• UK PM Sunak eyes anti-strike laws which he vows would protect lives and livelihoods, according to Daily Mail.

NOTABLE DATA

• German Wholesale Price Index MM (Nov) -0.9% (Prev. -0.6%); YY (Nov) 14.9% (Prev. 17.4%)

NOTABLE US HEADLINES

• Click here for the US Early Morning Note.

GEOPOLITICS

• US is planning to send Ukraine advanced electronic equipment that converts unguided aerial munitions into "smart bombs", according to officials cited by Washington Post.
• US defence firms are in talks with Vietnam to sell helicopters and drones, while military deals with the US would signal a shift away from Vietnam's reliance on Russia, according to Reuters.
• Russia's Washington embassy has warned that a transfer of the Patriot System to Ukraine would result in "unpredictable consequences", via Walla News' Elster.

APAC TRADE

EQUITIES

• APAC stocks were subdued in the aftermath of the FOMC.
• ASX 200 was dragged lower by weakness in nearly all sectors but with losses cushioned by strong jobs data.
• Nikkei 225 declined but just about remained above the 28K level following strong trade numbers in which the value of both exports and imports reached a record for the month of November.
• Hang Seng and Shanghai Comp were negative after disappointing Chinese Industrial Production and Retail Sales data, while property and tech stocks were driving the underperformance in Hong Kong after the HKMA raised rates in lockstep with the Fed, while attention was also on the PBoC which conducted a CNY 650bln 1-Year MLF operation vs. CNY 500bln maturing but maintained the rate at 2.75%.

NOTABLE ASIA-PAC HEADLINES

• PBoC conducted CNY 650bln of 1-year MLF vs. CNY 500bln maturing with the rate kept at 2.75%.
• HKMA raised its base rate by 50bps to 4.75%, as expected, following the Fed rate hike, while Macau's Monetary Authority raised its base rate for the discount window by 50bps to 4.75%.
• China's stats bureau said China's economy maintained its recovery trend in November despite multiple pressures but added that the foundation of the economic recovery is still not solid, according to Reuters.
• US Senate passes bill to ban federal employees from using TikTok on government devices.

DATA RECAP

• Chinese Industrial Output YY (Nov) 2.2% vs. Exp. 3.6% (Prev. 5.0%); Retail Sales YY (Nov) -5.9% vs. Exp. -3.7% (Prev. -0.5%)
• Chinese Urban Investment (YTD)YY (Nov) 5.3% vs. Exp. 5.6% (Prev. 5.8%); House Prices YY (Nov) -1.6% (Prev. -1.6%)
• Japanese Trade Balance (JPY)(Nov) -227.4B vs. Exp. -1680.3B (Prev. -2162.3B, Rev. -2166.2B)
• Japanese Exports YY (Nov) 20% vs. Exp. 19.8% (Prev. 25.3%); Imports YY (Nov) 30.3% vs. Exp. 27.0% (Prev. 53.5%)
• Australian Employment (Nov) 64.0k vs. Exp. 19.0k (Prev. 32.2k, Rev. 43.1k); Unemployment Rate (Nov) 3.4% vs. Exp. 3.4% (Prev. 3.4%)
• Australian Participation Rate (Nov) 66.8% vs. Exp. 66.6% (Prev. 66.5%)
• New Zealand GDP QQ (Q3) 2.0% vs. Exp. 0.9% (Prev. 1.7%, Rev. 1.9%); YY (Q3) 6.4% vs. Exp. 5.5% (Prev. 0.4%, Rev. 0.3%)