• APAC stocks traded mostly firmer following a similar lead from Wall Street; Chinese markets saw more of a muted performance.
• DXY traded flat within a tight range on either side of 105.50, USD/JPY remained just under 151.00, and Antipodeans outperformed.
• European equity futures are indicative of a contained open with the Eurostoxx 50 -0.1% after the cash market closed +0.6% yesterday.
• US military forces confirm it conducted a self-defence strike on a facility in eastern Syria, according to the Pentagon; the strike was a response to attacks against US personnel in Iraq and Syria by IRGC-Quds Force affiliates.
• Highlights include US IJC, NZ Manufacturing PMI, Speeches from Fed’s Powell, Barkin, Bostic, ECB’s Lagarde, BoJ’s Ueda, ECB’s Lane, Banxico Policy Announcement, Supply from US.
• Earnings: Deutsche Telekom, Hannover Re, AstraZeneca, Taylor Wimpey, National Grid

US TRADE

EQUITIES

• US stocks sold off at the start of the session but edged higher after the European close to see a broadly unchanged close, aside from the small caps - RUT closed lower by over 1% with regional banks underperforming while lower oil prices weighed on energy names.
• SPX +0.10% at 4,382, NDX +0.11% at 15,313, DJIA -0.12% at 34,112, RUT -1.10% at 1,714.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed’s Harker (2023 vote) said he supported a steady interest rate stance at the latest FOMC meeting; Fed will stay higher for longer, no sign of near-term rate cuts. He added now is a time to take stock of past rate hikes’ impact. He added the next Fed rate choice "could go either way" depending on data, and he sees no recession, but growth likely to cool off. Click here for more details.
• BoC Minutes: Some members of the GC felt the rate would more likely than not need to increase further. Other council members felt a 5% rate would be likely be enough to bring inflation down to the 2% target provided it was maintained at that level for long enough, and there was a strong consensus that with clearer evidence of higher rates having the desired effect, GC should be patient and hold policy rate at 5%. Click here for more details.
• Morgan Stanley’s (MS) wealth-management arm is reportedly being probed by the Fed; looking into whether the bank has sufficient controls in place to prevent rich foreign customers from laundering money, according to WSJ.
• Striking actors reportedly reached a tentative labour agreement with Hollywood studios, according to a union statement.

DATA RECAP

• Atlanta Fed GDPnow (Q4): 2.1% (prev. 2.1%).

APAC TRADE

EQUITIES

• APAC stocks traded mostly firmer following a similar lead from Wall Street with most major APAC markets in the green although Chinese markets saw more of a muted performance.
• ASX 200 saw its upside supported by Health and Financials, with the latter as NAB rose post-earnings, although the IT and Energy sectors lagged.
• Nikkei 225 was firmer from the start as the recent JPY weakness lent exporters a hand and the index eventually topped 32,500.
• Hang Seng and Shanghai Comp were mixed with Mainland China flat/firmer whilst the latest Chinese inflation metrics painted a picture of a fragile economy as the nation fell back into deflation. Hong Kong underperformed as the Property sector dragged the index lower.
• US equity futures were flat/mixed with modest weakness seen in the NQ and the ES, whilst the YM and RTY traded with a more flat/upward bias.
• European equity futures are indicative of a contained open with the Eurostoxx 50 -0.1% after the cash market closed +0.6% yesterday.

FX

• DXY traded flat within a tight range on either side of 105.50 within a 105.46-59 band but still within yesterday’s 105.44-87 range, with the 50 DMA for the index seen at 105.79.
• EUR/USD managed to find overnight support at 1.0700 but also found resistance near yesterday’s high of 1.0716. The next upside levels include the 7th November high at 1.0723 and the 6th November peak at 1.0756 ahead of its 100 DMA (1.0796) and 200 DMA (1.0801). Downside levels include yesterday’s trough at 1.0658, the 50 DMA (1.0624), and the 21 DMA (1.0607).
• GBP/USD traded within yesterday’s 1.2238-2302 range and on either side of its 50 DMA (1.2275), while the RICS Housing Survey showed the pace of the decline in house prices steadying in October.
• USD/JPY remained under 151.00 throughout the session after briefly topping the level in US trade yesterday to print a fresh weekly peak at 151.05.
• Antipodeans saw cautious gains amid the mixed mood across the market, whilst the Aussie and the Chinese Yuan saw minimal price action to the Chinese inflation metrics.
• PBoC set USD/CNY mid-point at 7.1772 vs exp. 7.2723 (prev. 7.1773)

FIXED INCOME

• 10-year UST futures are flat despite an initial mild upside bias after Treasuries bull-flattened on Wednesday amid the decline in oil prices and after a satisfactory US 10-year auction.
• Bund futures initially tilted upward with the contract eventually printing a 130.93 high (vs yesterday’s peak at 130.92) before coming off best levels.
• 10yr JGB futures were uneventful and conformed to the price action seen across peers whilst the corresponding 10-year yield traded sub-85bps, although
• US sold USD 40bln of 10yr notes at 4.519%; tails by 0.8bps.
• Japan sold 900bln 30yr JGBs b/c 3.60x (prev. 3.06x), average yield 1.741% (prev. 1.691%).

COMMODITIES

• Crude futures were once again consolidating following the prior day’s decline which saw the front-month contracts settle lower by over USD 2/bbl, although price action was seemingly underpinned at the resumption of electronic trade after US military forces confirmed it conducted a self-defence strike on a facility in eastern Syria in response to attacks against US personnel.
• Spot gold was flat but eventually found mild resistance at USD 1,950/oz.
• Copper futures gradually edged modestly lower against the backdrop of a cautious market mood.
• Iraqi government oil officials met with Kurdistan reps to discuss resumption of flows from the export pipeline from Iraq to Turkey, according to Reuters citing a statement.
• Chinese importers bought at least five more US soybean cargoes on Wednesday for Dec-Mar shipment, according to Reuters citing traders.
• China Commerce Ministry said China is to re-investigate anti-dumping duties case on stainless steel billets and stainless steel hot-rolled sheets and coils imported from the EU, Japan, South Korea, and Indonesia, according to Reuters.

CRYPTO

• Bitcoin gradually edged higher by over USD 1,000 towards USD 37,000 following source reports that the US SEC has reportedly opened talks with Grayscale Investments regarding a spot bitcoin ETF.
• US SEC has reportedly opened talks with Grayscale Investments on the details of the company's application to convert its trust product GBTC to a spot Bitcoin (BTC) ETF, according to CoinDesk citing sources.

NOTABLE ASIA-PAC HEADLINES

• Japan's Government will seek JPY 2tln (USD 13.2bln) in budget funding to support chip production and advances in generative AI technology, including more aid for Taiwan Semiconductor Manufacturing Co. (TSM), according to Nikkei.
• Two of Japan's biggest life insurers, Nippon Life Insurance and Dai-ichi Life Insurance, are increasing their purchases of superlong-term Japanese government bonds in the second half of FY23, according to Nikkei.
• BoJ Oct Summary of Opinions: one member said must patiently maintain monetary easing; One member said that given extremely high uncertainty and must take steps to make YCC operation more flexible. Click here for the detailed headline.
• BoJ Governor Ueda reiterates that firms becoming more active in raising prices and wages than before, according to Reuters.
• Ex-BoJ executive Maeda said the BoJ may end the negative interest rate policy in January and keep raising short-term rates in stages, according to Reuters.
• PBoC injected CNY 202bln via 7-day reverse repos with the rate at 1.80% for a CNY 8bln net daily injection.
• RBI Governor Das said India's current account deficit remains eminently manageable, and they have bolstered FX reserves to deal with potential eventualities.

DATA RECAP

• Chinese CPI YY * (Oct) -0.2% vs. Exp. -0.1% (Prev. 0.0%)
• Chinese CPI MM * (Oct) -0.1% vs Exp. 0.0% (Prev. 0.2%)
• Chinese PPI YY * (Oct) -2.6% vs. Exp. -2.7% (Prev. -2.5%)

GEOPOLITICS

• US military forces confirm it conducted a self-defence strike on a facility in eastern Syria, according to the Pentagon; the strike is a response to attacks against US personnel in Iraq and Syria by IRGC-Quds Force affiliates.
• Two marches attack on the Silk base in Iraq and sirens sound at the US embassy [in Iraq]", according to Sky News Arabia.
• US President Biden and Chinese President Xi reportedly prepare to restart military-to-military channels, according to Axios citing sources.
• Hamas is reportedly discussing the possible release of a few hostages in exchange for a brief pause in fighting, officials said via NYT.
• Egyptian sources said they are close to reaching a humanitarian truce in the Gaza Strip to exchange detainees, according to Sky News Arabia.
• Vice chairman of China's Central Military Commission, in a meeting with Russian President Putin, said "China is ready to work with Russia to jointly safeguard the two countries' interests and safeguard global and regional prosperity and stability", according to Global Times.
• Germany will send four fighter jets to Romania to support NATO's air policing mission from the end of November, according to Reuters sources.

EU/UK

NOTABLE HEADLINES

• UK'S MHRA authorises Eli Lilly's (LLY) diabetes drug Mounjaro (Tirzepatide) for obese adult patients to aid with weight loss and weight management, according to Reuters.
• Eli Lilly's (LLY) diabetes weight loss drug, Tirzepatide, approved by the FDA, according to Reuters. Note, it was previously approved for diabetes but is now approved for obesity.

DATA RECAP

• UK RICS Housing Survey* (Oct) -63 (Prev. -69.0); "Pace of house price falls ‘showing signs of steadying as the end of year approaches".