• European bourses march firmly into the green whilst US futures post gains to a lesser extent; RTY outperforms after heavy losses in recent sessions
• Dollar is firmer ahead of Fed Chair Powell, with the Kiwi outperforming as it benefits from AUD/NZD cross-selling
• Debt gives back some of the prior session's gains with US 10-year yield surpassing 4.50%, though benchmarks are off worst
• Crude attempts to claw back some of the losses felt over the week; potentially assisted by news that the US military conducted strikes in eastern Syria
• Highlights include US IJC, NZ Manufacturing PMI, Speeches from Fed’s Powell, Barkin, Bostic, ECB’s Lagarde, Banxico Policy Announcement, Supply from US

EUROPEAN TRADE

EQUITIES

• European bourses are in the green with newsflow relatively limited and the tone gradually improving throughout the session, Euro Stoxx 50 +0.8%.
• Action which follows a more mixed APAC handover, where China and Hong Kong underperformed on inflation data and the property sector respectively.
• Sectors are primarily in the green, with Industrials outperforming after Schneider Electric though Airbus' update has capped gains. At the other end of the spectrum, Travel & Leisure is in the red after Flutter Entertainment's report.
• Stateside, futures are making their way into the green as we near the commencement of US cash trade, ES +0.2%; with action for much of the session near-unchanged and tentative/rangebound.
• EU court advisor has backed the EU's USD 14bln tax order to Apple (AAPL); advisor agrees with the Commission's view that the General Court erred when the case against Apple was thrown out, proposes the case is referred back for a new decision.
• Nvidia (NVDA) is reportedly planning to unveil three new chips for China, via Star Market Daily citing sources; to be announced as soon as November 16th
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
• Click here for more details.

FX

• Buck back on recovery track after midweek time out as Treasury yields rebound and curve re-steepens, DXY towards top end of 105.67-46 band.
• Yen losing ground sub-151.00 vs Dollar as BoJ Governor Ueda continues to bang the dovish drum.
• Euro capped by heavy 1.0700+ option expiry interest against the Greenback, and Franc underpinned by expiries above 0.9000.
• Pound propped around 1.2300 and 0.8700 vs Euro after BoE's Pill pushes the case for a prolonged period of restrictive policy.
• Kiwi elevated ahead of NZ manufacturing PMI, as NZD/USD grips 0.5900 handle and AUD/NZD slips under 1.0800.
• PBoC set USD/CNY mid-point at 7.1772 vs exp. 7.2723 (prev. 7.1773)
• Click here for more details.
• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Debt futures regress after upside extension and curves flip a bit from bull-flattening.
• Bunds fade closer to 131.00 within a 130.93-39 range, Gilts retreat from 96.14 to 95.35.
• T-note towards the base of 108-04/17 band as 10 year yield fails to hold below 4.5% ahead of US jobless claims, long bond auction and more Fed speak.
• Click here for more details.

COMMODITIES

• Crude benchmarks are firmer on the session though the magnitude of the move pales in comparison to the downside seen WTD and since the middle of October when the Israel-Hamas geopolitical premium peaked, so far at least.
• As it stands, WTI Dec’23 and Brent Jan’24 are posting upside of just under USD 1/bbl on the session; but, have only been able to recover to around the mid-point of Wednesday’s USD 74.91-77.53/bbl parameters in WTI at best.
• Metals are modestly softer but with action relatively contained as the USD inches higher and the overall risk tone remains firmer in Europe but much more tentative thus far stateside.
• 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.
• China Vice Premier Ding will increase coal, natural gas production and actively expand imports of resources to ensure stable energy supply this winter.
• Click here for more details.

NOTABLE EUROPEAN HEADLINES

• BoE's Pill assumes rates are to stay restrictive for an extensive period. Inflation remains much too high. No grounds for complacency when it comes to inflation. Do not need to raise rates to bear down on inflation. Need a persistent level of restrictive monetary policy for an extended period. If the economic situation changes, will need to change policy. BoE does not make promises when it comes to interest rates. Slowing growth does not appear to be lowering inflation or firms pricing power.
• The German Government reached an agreement on electricity price support for the industry, via Handelsblatt citing sources; agreement for five years, relief will amount to over EUR 10bln in the coming year alone.

EUROPEAN DATA

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

NOTABLE US 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.
• Fed's Goolsbee (Dove, 2023 Voter) says the Fed need to watch for risks of overshooting on rates; higher long-term yields can have a substantial effect if sustained, via WSJ.
• 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.
• Click here for the US Early-Morning note.

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.
• Hamas is reportedly discussing the possible release of a few hostages in exchange for a brief pause in fighting, officials said via NYT.
• 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.

CRYPTO

• 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.

APAC TRADE

• 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.

NOTABLE 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.
• 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.
• BoJ's Ueda cautions that unwinding ultra-loose policy is a serious challenge, adding that the BoJ will move carefully on raising interest rates, via FT. On commitment to quantitative/qualitative easing until inflation target is attained says: “We are making progress towards achieving this same goal, but there’s still some distance to cover before we can scrap the forward guidance,”. In the scenario of an overshoot in inflation, believe we will be able to deal with it by lifting rates. Rate of growth of wages, around 2%, will need to continue and at a slightly higher rate. Yet to decide what order they would terminate the measures which are in place.
• Japan lobby head urges BoJ to normalise policy to live with interest rates; the leader said the BoJ should unwind its easing programmes to live with interest rates although it may take a year to exit monetary stimulus.

DATA RECAP

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