• APAC stocks eventually traded mixed following a mostly positive lead from Wall Street and with news flow on the quieter side
• DXY traded on a firmer footing and reclaimed a 104.00 handle from a 103.91 low, USD/JPY trimmed recent losses and NZD lagged among G10s
• 10yr UST and Bund futures were subdued overnight, whilst Japan's 2yr yield rose above 0% for the first time since 2015
• China will no longer take measures to isolate people from overseas and go to isolation facilities from January 3rd 2023, according to HKSTV
• Looking ahead, highlights include  German GfK Consumer Sentiment, UK Q3 GDP, UK CBI Distributive Trades, US MBA Mortgage Applications, Canadian CPI, CNB Decision, Supply from the US

US TRADE

• US stocks closed flat/firmer on Tuesday.
• SPX +0.1% at 3,822, NDX -0.1% at 11,072, DJIA +0.3% at 32,850, RUT +0.5% at 1,748
• Click here for a detailed summary.

NOTABLE HEADLINES

• US Senate's USD 1.66tln government funding bill has secured enough support to advance in the first procedural vote, according to Reuters.
• Tesla (TSLA) CEO Musk said he will resign as Twitter CEO as soon as he finds a replacement, and after that, he will just run the software and servers teams, via Twitter

APAC TRADE

EQUITIES

• APAC stocks eventually traded mixed following a mostly positive lead from Wall Street and with news flow on the quieter side.
• ASX 200 outperformed and was lifted by gains across gold miners after the yellow metal topped USD 1,800/oz.
• Nikkei 225 remained pressured by the recent JPY strengthening, whilst the region overlooked reports that Japan maintained its overall economic view in December.
• Hang Seng and Shanghai Comp gave up earlier gains but remained within tight parameters
• US equity futures trended higher during the APAC session despite a lack of newsflow.
• European equity futures were firmer overnight with the Euro Stoxx 50 future +0.6% after cash markets closed -0.2% yesterday.

FX

• DXY traded on a firmer footing and reclaimed a 104.00 handle from a 103.91 low after notching a 103.77-104.79 range yesterday.
• USD/JPY trimmed some of yesterday's losses and moved back above 132.00, but held onto a bulk of yesterday's move.
• EUR/USD and GBP/USD were flat with a modest downside bias but remained above 1.0600 and 1.2150 respectively.
• Antipodeans were softer with the NZD lagging after a deterioration in New Zealand consumer confidence in December.
• PBoC set USD/CNY mid-point at 6.9650 vs exp. 6.9644 (prev. 6.9861)

FIXED INCOME

• 10yr UST futures were subdued following the prior day’s bear-steepening.
• Bund futures were modestly softer and have dipped under yesterday’s session low.
• 10yr JGB futures remained weak with the yield firmer around 0.48% vs the BoJ’s new 0.50% upper band, whilst the 2yr yield rose above zero for the first time since 2015.
• BoJ unscheduled operation: offered to buy JPY 100bln in 3-5yr JGBs and JPY 100bln in 5-10yr JGBs, according to Reuters.

COMMODITIES

• Crude futures consolidated following the prior day’s choppy price action which ultimately resulted in both benchmarks settling higher.
• Spot gold held onto most of the prior day’s gains but resided under yesterday’s USD 1,821/oz peak.
• Base metal futures were modestly firmer as DXY held onto most of its recent losses, whilst Indonesia banned the export of bauxite - which is used in the aluminium manufacturing industry.
• US Private Inventories (bbls): Crude -3.1mln (exp. -1.7mln), Cushing +0.84mln, Gasoline +4.5mln (exp. +2.1mln). Distillate +0.828mln (exp. +0.3mln).
• TC Energy (TRC) delays the full restart of the Keystone pipeline (622k BPD) until Dec. 28th/29th, according to Reuters.
• Indonesia is to ban the export of bauxite from June 2023; a move to encourage the development of onshore bauxite processing, according to the Indonesian President, according to Reuters.
• Russia decreased oil exports by 11% M/M between Dec 1-20th, according to Kommersant.
• India has imposed anti-dumping duty on stainless steel tubes and pipe imports from China for five years, according to a government notification

CRYPTO

• Bitcoin was uneventful overnight and traded just under the USD 17,000 mark.
• Crypto exchange Uniswap has partnered with fintech company Moonpay to allow users to buy cryptocurrency on its web app using debit cards, credit cards, and bank transfers, according to CoinTelegraph.

NOTABLE ASIA-PAC HEADLINES

• China reported zero new COVID deaths in the mainland on Dec 20th vs five a day earlier; reported 3,101 new COVID cases in the mainland on Dec 20th vs 2,722 a day earlier.
• "China will no longer take measures to isolate people from overseas and go to isolation facilities from January 3, 2023" according to HKSTV; "The policy optimized to 0+3 also means that China will fully open up from 2023 in the new year."
• PBoC injected CNY 19bln via 7-day reverse repos with the rate maintained at 2.00%; injects CNY 141bln via 14-day reverse repos with the rate maintained at 2.15%; daily net injection CNY 158bln.
• China State Planner is holding a meeting to study measures to deal with excessive hog price decline, according to Reuters.
• Japanese Foreign Minister Hayashi is to delay his trip to China to late-January or later, according to TV Asahi.
• Japan maintained its overall economic view in December; the economy is recovering moderately, said Japan needs to pay close attention to China's COVID situation, via Reuters.
• Japanese Economy Minister Goto acknowledged that the BoJ's Tuesday decision was not meant to be a tweak or exit from monetary policy, according to Reuters.
• IMF said the BoJ's YCC tweak is "a sensible step", according to Reuters.
• Japanese government to set assumed interest rate at a record low of 1.1% for compilation of FY23/24 budget, according to Reuters sources.
• South Korean Finance Minister sees 2023 GDP growth at 1.6% (vs 2022 estimate of 2.5%) and 2023 CPI growth at 3.5% (vs 2022 estimate of 5.1%), according to Reuters.

DATA RECAP

• New Zealand Consumer Confidence (Dec) 73.8 (prev. 80.7)
• New Zealand Annual Trade Balance (Nov) -14.63B (Prev. -12.88B, Rev. -13.86B)
• New Zealand Trade Balance (Nov) -1863M (Prev. -2129.0M, Rev. -2298M)
• New Zealand Imports (Nov) 8.54B (Prev. 8.27B, Rev. 8.26B)
• New Zealand Exports (Nov) 6.68B (Prev. 6.14B, Rev. 5.96B)
• South Korea (Dec 1-20) imports +1.9% Y/Y, exports -8.8% Y/Y; Trade Balance USD -6.43bln, according to the Customs Agency.

GEOPOLITICS

RUSSIA-UKRAINE

• US Pentagon said there is no evidence of imminent Belarus action in Ukraine, according to Reuters.

OTHER

• Naval exercises of Russia and China with practical rocket and artillery firing will start in the East China Sea on Wednesday, according to Interfax.

EU/UK

NOTABLE HEADLINES

DATA RECAP

• UK Lloyds Business Barometer (Dec) 17 (Prev. 10)

GLOBAL

• Peru's congress has approved constitutional reform to hold an early vote, according to Bloomberg.