• APAC stocks were pressured on spillover selling from global counterparts following the slew of central bank rate hikes.
• European equity futures are marginally higher with the Euro Stoxx 50 future up 0.2% after the cash market closed with losses of 3.5% yesterday.
• DXY is a touch softer but on a 104 handle, JPY leads G10 FX, EUR/USD sits on a 1.06 handle, Cable lingers around 1.22.
• ECB President Lagarde reportedly offered policymakers back-to-back 50bp hikes to secure a majority decision, according to Reuters sources.
• Looking ahead, highlights include UK Retail Sales, EZ, UK & US Flash PMIs, EZ HICP (Final), Quadruple Witching.

US TRADE

• US stocks were pressured amid a global stock sell-off owing to the latest central bank rate decisions including a hawkish ECB rate hike and after the recent dismal data releases from the US and China.
• SPX -2.49% at 3,896, NDX -3.37% at 11,345, DJIA -2.25% at 33,202, RUT -2.52% at 1,775.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US Senate voted 71-19 to pass a week-long stopgap funding bill and avert a government shutdown ahead of a midnight Friday deadline which gets sent to President Biden to sign into law, according to Reuters.
• US Senate voted 83-11 to pass the USD 858bln Defence Authorisation Bill and sends the measure to President Biden for signing, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks were pressured on spillover selling from global counterparts following the slew of central bank rate hikes and with markets also unnerved by a flurry of dismal US data releases.
• ASX 200 was lower with sentiment not helped by a deterioration in the latest Australian flash PMI data releases.
• Nikkei 225 underperformed after the ruling LDP tax panel agreed and provided details on the tax hike plan to boost the defence budget and with index-heavyweight Fast Retailing hit by the announcement of a 3-for-1 stock split.
• Hang Seng and Shanghai Comp lacked firm direction amid mixed headlines with some encouragement from reports related to US audits in which Chinese companies averted a delisting after the US was given full inspection access, while there was also a constructive tone in discussions between US Treasury Secretary Yellen and China's Ambassador to the US in which they agreed to step up coordination on trade and policies.
• US equity futures remained (ES -0.1%) lacklustre following the prior day's heavy losses.
• European equity futures were marginally higher with the Euro Stoxx 50 future up 0.2% after the cash market closed with losses of 3.5% yesterday.

FX

• DXY reversed some of its recent advances but remained above the 104.00 level after it was boosted yesterday by a haven bid as stocks tumbled due to the plethora of central bank rate hikes and disappointing US data.
• EUR/USD composed itself after the turbulence from a hawkish ECB rate hike and QT announcement which initially boosted the single currency before giving way to the dollar. ECB sources noted one-third of policymakers had wanted a 75bps hike.
• GBP/USD picked itself up after the prior day’s underperformance in which it briefly dipped below the 1.2200 handle despite the BoE hiking rates and omitting its reference about rates unlikely reaching a peak implied by the market.
• USD/JPY mildly pulled back after resistance around the 138.00 level capped the momentum that was spurred by widening policy diverges between the BoJ and its global central bank peers.
• Antipodeans were lacklustre with the recovery limited after weak PMI data from both sides of the Tasman.
• PBoC set USD/CNY mid-point at 6.9791 vs exp. 6.9844 (prev. 6.9343)
• Mexican Interest Rate (Dec) 10.50% vs. Exp. 10.5% (Prev. 10.0%). Banxico stated Deputy Governor Esquivel dissented and voted for just a 25bps hike, while the central bank added that it will still be necessary to raise the reference rate in its next monetary policy meeting.

FIXED INCOME

• 10yr UST futures were slightly softer but remained in a tight range as the recent weak US data helped prices shrug off the selling pressure seen in European counterparts triggered by the rate hikes across the pond.
• Bund futures languished near the prior day’s lows in the aftermath of the hawkish ECB.
• 10yr JGB futures traded steadily amid the risk aversion and the lack of additional BoJ purchases.

COMMODITIES

• Crude prices were marginally lower amid the downbeat sentiment and recent weak output data stateside.
• Qatar Energy sells February Al-Shaheen crude at USD 1.30-1.50/bbl above Dubai quotes, according to sources.
• French President Macron said EU energy policy is likely to be finalised during the meeting on Monday, while it was separately reported that the Czech PM said EU leaders agreed the gas price cap deal must be done by Monday at the energy ministers' meeting, according to Reuters.
• ICE warned it may pull the gas market from the EU over the Brussels price cap, according to FT.
• Russian Deputy PM Novak said Russia is interested in increasing oil output as part of projects in Venezuela, according to TASS.
• Spot gold languished near the prior day's lows.
• Copper attempted to nurse some of its recent losses but with the recovery capped by risk aversion.
• Panama's government ordered the suspension of operations at First Quantum Minerals' copper project.

CRYPTO

• Bitcoin was uneventful with price action contained after it recently slipped below the USD 18,000 level.
• HKEX (388 HK) welcomed Asia's first crypto assets ETFs after the listing of CSOP Bitcoin Futures ETF & CSOP Ether Futures ETF, according to Reuters.
• FTX is reportedly seeking permission to sell off LedgerX, Ember and its branches in Japan and Europe before they lose value and have their licences revoked, according to Cointelegraph.

NOTABLE ASIA-PAC HEADLINES

• China National Health Commission issued a plan to step up COVID control and prevention in rural areas where it will strengthen reserves of essential drugs and COVID home test kits. China will also accelerate COVID vaccination of the rural population, especially among the elderly and said that people returning to their hometowns in rural areas should monitor their health and reduce contact with the elderly at home, according to Reuters.
• China's NDRC said the economy is facing more complex and grim external environments but added that the long-term positive trend hasn't changed and it approved CNY 1.5tln of major projects as of end-November. NDRC said China's economic growth is expected to continue picking up following the implementation of new COVID rules and that they will focus on stabilising growth, employment and prices, as well as speed up infrastructure project construction and expand effective investment, according to Reuters.
• China's securities regulator said it welcomes the US PCAOB decision on auditing and will continue supervision work on auditing in the future, while it will create a more stable regulatory environment with the US, according to Reuters.
• China's ambassador to the US met with US Treasury Secretary Yellen to discuss their views on global macroeconomic and financial developments, while it was reported that they agreed to step up coordination on trade and policies.
• Japan's government is to implement defence tax hikes in stages over multiple years to secure more than JPY 1tln by fiscal 2027, while it is to adopt a new corporate surtax of 4.0%-4.5% and will introduce a surtax of 1% on incomes for the time being. Furthermore, it is to raise the tobacco tax in stages by JPY 3 a piece and said it will implement defence taxation at an appropriate time from 2024 onwards, according to a draft by the ruling LDP cited by Reuters.

DATA RECAP

• Japanese Manufacturing PMI (Nov P) 48.8 (Prev. 49.0)
• Japanese Services PMI (Nov P) 51.7 (Prev. 50.3)
• Australian Manufacturing PMI Flash (Dec) 50.4 (Prev. 51.3)
• Australian Services PMI Flash (Dec) 46.9 (Prev. 47.6)
• New Zealand Manufacturing PMI* (Nov) 47.4 (Prev. 49.3)

GEOPOLITICS

• EU agreed on the 9th sanctions package against Russia, according to diplomats.
• North Korean Leader Kim Jong Un guided a successful test of a 'high-thrust solid-fuel motor' at the satellite launching ground and the test was said to have provided a guarantee for the development of another new strategic weapon system, while Kim hopes the new-type strategic weapon would be made in the shortest span of time, according to KCNA.

EU/UK

NOTABLE HEADLINES

• ECB President Lagarde reportedly offered policymakers back-to-back 50bp hikes to secure a majority after stiff opposition on Thursday, according to Reuters sources, while two sources said this could mean three 50bp hikes if the inflation outlook fails to improve.

DATA RECAP

• UK GfK Consumer Confidence* (Dec) -42 vs. Exp. -43.0 (Prev. -44.0)