• APAC stocks were lower across the board amid spillover selling from global peers.
• After-hours earnings in the US saw Netflix surge 12.8%, whilst Tesla fell 4.2%.
• European equity futures are indicative of a lower open with the Euro Stoxx 50 future -0.6% after the cash market closed down 1.1% yesterday.
• FX markets are steady with DXY caged in a tight range above 106.50, AUD suffers post-jobs data and USD/JPY continues to eye 150.
• Looking ahead, highlights include US IJC, Philadelphia Fed, Existing Home Sales & Leading Index, Fed's Powell, Jefferson, Goolsbee, Barr, Bostic, Harker & Logan, Supply from France & Spain.
• Earnings from Roche, Nestle, Pernod Ricard, Renault, L'Oréal, Philip Morris, AT&T.

US TRADE

EQUITIES

• US stocks declined throughout the session despite the lack of an obvious catalyst other than ongoing geopolitical angst even though there was no material worsening of the situation in Israel. The downturn was led by the small-cap Russell 2k index whilst NQ futures flirted beneath 15k before rebounding from lows post-Netflix earnings.
• Netflix Inc (NFLX) Q3 2023 (USD): EPS 3.73 (exp. 3.49), Revenue 8.54bln (exp. 8.54bln), Streaming paid net additions 8.76mln (exp. +6.20mln). Co. shares +12.8% after-hours
• Tesla Inc (TSLA) Q3 2023 (USD): Adj. EPS 0.66 (exp. 0.73), Revenue 23.35bln (exp. 24.1bln); Cybertruck deliveries scheduled to begin on November 30th. Co. shares -4.2% after-hours
• SPX -1.34% at 4,314, NDX -1.41% at 14,909, DJIA -0.98% at 33,665, RUT -2.11% at 1,728.
• Click here for a detailed summary.

NOTABLE US HEADLINES

• Fed's Bowman (voter) said inflation has come down, but it is still too high and the Fed is highly focused on returning inflation to 2%, while she added that strength in goods spending has been surprising.
• Fed's Waller (voter) said it is too soon to tell if more policy rate action is needed and that they can wait, watch and see before making definitive moves on the policy path. Waller added they can hold policy rates steady if the real economy slows and more action on the policy rate would be needed if demand and economic activity keep up the recent pace. Waller also commented that they need to see how inflation progresses in the next 6-12 months and then see about cutting rates but added that no one expects any kind of rate cut soon and that if long rates go up, that will do some of the Fed's work.
• Fed's Williams (voter) said inflation has come down quite a bit although still a ways to go to get down to the target. Williams added they are not declaring victory, but sees progress and will "stick at it" to get inflation back to the target.
• Fed Beige Book noted little change in economic activity since September and the labour market tightness continued to ease, while wage growth remained modest to moderate and prices continued to increase at a modest pace.
• US GOP Rep. Jim Jordan lost the House Speaker vote for the second time and a spokesperson said Jordan is not dropping out, while Jordan said he hasn't decided whether to pursue a third round of votes.

APAC TRADE

EQUITIES

• APAC stocks were lower across the board amid spillover selling from global peers following the latest earnings releases and as geopolitical risks lingered, while further upside in yields also added to the headwinds.
• ASX 200 was pressured amid mixed jobs data and with underperformance in yield-sensitive sectors.
• Nikkei 225 suffered firm losses despite the mostly better-than-expected Japanese trade figures.
• Hang Seng and Shanghai Comp. conformed to the downbeat mood with the Hong Kong benchmark being the worst hit amid weakness in Chinese tech stocks and the property industry with the latter not helped by ongoing debt woes and after Chinese property prices remained at a contraction.
• US equity futures (ES -0.1%, NQ -0.1%) remained depressed amid recent selling which rolled over into the Asia-Pac region.
• European equity futures are indicative of a lower open with the Euro Stoxx 50 future -0.6% after the cash market closed down 1.1% yesterday.

FX

• DXY took a breather from the prior day’s haven bid as participants look ahead to a slew of upcoming Fed speeches including from Chair Powell at the Economic Club of New York. There were also recent comments from Bowman and Williams who suggested inflation was still elevated, while Harker and Waller all but confirmed a pause in November.
• EUR/USD remained lacklustre on a 1.05 handle after losing ground owing to the recent dollar strength.
• GBP/USD languished at this week’s lows after sliding from the 1.2200 handle.
• USD/JPY lacked direction and remained in proximity to the highly watched 150.00 level despite the mostly better-than-expected Japanese trade data.
• Antipodeans were pressured amid the risk-off conditions and after mixed Australian jobs data in which the headline Employment Change missed forecasts and although the Unemployment Rate was lower than expected, it coincided with a surprise drop in the Participation Rate.
• PBoC set USD/CNY mid-point at 7.1795 vs exp. 7.3226 (prev. 7.1795)

FIXED INCOME

• 10yr UST futures extended on their recent declines as the US 10yr yield printed a fresh 16-year high and with price action also flimsy after a mixed 20yr auction.
• Bund futures are subdued after retreating beneath the 128.00 level which has since acted as resistance.
• 10yr JGB futures were on the back foot following the losses in global counterparts and also failed to benefit from the slightly improved demand at the enhanced liquidity auction for long-end JGBs.

COMMODITIES

• Crude futures traded flat and largely ignored confirmation of the US relaxing some Venezuela sanctions.
• Qatar set December-loading Al-Shaheen crude term price at about USD 3.25/bbl above Dubai quotes.
• US relaxed some sanctions on Venezuela's oil, gas and gold sectors. US Treasury said it is issuing a 6-month licence authorising transactions in Venezuela's oil and gas sectors and also issued a general licence authorising dealings with Venezuela's mining Co. Minerven. Furthermore, the general licence will only be renewed if Venezuela meets election commitments and other commitments related to those wrongfully detained, while there were later comments from Venezuelan President Maduro that all sanctions must be lifted.
• Spot gold traded sideways with prices stuck near the USD 1950/oz level amid an uneventful dollar.
• Copper futures were subdued amid the broad risk aversion and Chinese property sector woes.

CRYPTO

• Bitcoin was indecisive and marginally edged lower but remained north of the USD 28,000 level.
• US SEC Chair Gensler said the SEC is still weighing Bitcoin ETF proposals.

NOTABLE ASIA-PAC HEADLINES

• BoK kept its base rate unchanged at 3.50%, as expected, with the decision unanimous although one of the six board members said the policy rate should remain flexible in both ways and the five other board members remained open for a future rate hike. BoK said it will maintain a restrictive policy stance for a considerable time and will monitor inflation slowdown, financial stability risks, economic downside risks, household debt growth monetary policy changes in major countries and developments in geopolitical risks, as well as noted that the Middle East crisis adds to uncertainties for South Korea. BoK also stated that South Korea's economy is to grow as projected earlier but uncertainties to the growth path are high, while it sees upside risks to inflation and said it might take longer to reach the inflation target.

DATA RECAP

• Chinese House Prices YY (Sep) -0.1% (Prev. -0.1%)
• Japanese Trade Balance (JPY)(Sep) 62.4B vs. Exp. -425.0B (Prev. -930.5B, Rev. -937.8B)
• Japanese Exports YY (Sep) 4.3% vs. Exp. 3.1% (Prev. -0.8%)
• Japanese Imports YY (Sep) -16.3% vs. Exp. -12.9% (Prev. -17.8%, Rev. -17.7%)
• Australian Employment (Sep) 6.7k vs. Exp. 20.0k (Prev. 64.9k)
• Australian Participation Rate (Sep) 66.7% vs. Exp. 67.0% (Prev. 67.0%)
• Australian Unemployment Rate (Sep) 3.6% vs. Exp. 3.7% (Prev. 3.7%)
• Australian NAB Business Confidence (Q3) -1 (Prev. -3)

GEOPOLITICAL

• Israel conducted an air strike on Kafr Shuba in southern Lebanon, according to Al Mayadeen TV.
• Israeli PM Netanyahu won private backing from US President Biden to push ahead with a ground invasion of Gaza, according to accounts of a closed-door meeting between the leaders cited by The Times.
• US President Biden discussed with Egypt's Sisi ongoing coordination to deliver humanitarian assistance to Gaza and agreed to work together on encouraging an urgent and robust international response to the UN's humanitarian appeal, while they agreed on the need to preserve stability in the Middle East and prevent escalation of the conflict.
• US President Biden is expected to seek USD 60bln for Ukraine and aid for Israel in an upcoming USD 100bln funding request, according to NBC News.
• Russian Foreign Minister Lavrov says there is a serious risk that the Gaza conflict will become regional, while he added that attempts to blame Iran for the Gaza crisis are provocations, according to IFAX.
• North Korea said Russian Foreign Minister Lavrov's visit will mark a significant occasion in bilateral relations, while Lavrov said his visit will be a chance to reach a practical outcome in implementing the agreement reached at the recent Russia-North Korea summit. Furthermore, Lavrov said Russia totally supports North Korea's push to implement its sovereignty and their ties have a special meaning under the complex global political situation due to US hegemony that seeks world domination, according to KCNA.

EU/UK

NOTABLE HEADLINES

• EU's Breton said the European Commission adopted the recommendation to member states to anticipate the implementation of the future Digital Services Act governance system.