• European equities soar with US futures bid but slightly more contained
• DXY is trending lower towards the 104.00 level, with outperformance in the Yen amid tighter yield differentials
• Bond bulls rampant, assisted by softer UK Retail Sales, with key yield levels in sight
• Crude attempts to nurse some losses while industrial metals are subdued but precious metals shine
• Looking ahead, highlights include US Housing Starts, Speeches from BoE's Ramsden & Greene; Fed’s Collins, Barr, Goolsbee & Daly; ECB's Nagel, Wunsch & Cipollone.

EUROPEAN TRADE

EQUITIES

• European bourses in the green, Euro Stoxx 50 +0.9%, and on track to conclude the week with upside in excess of 2.0% for the broader Stoxx 600, gains which largely derive from the US CPI and subsequent pronounced dovish price action.
• Sectors are higher across the board with Health Care, Real Estate & Basic Resources leading while Autos remain green but closer to stalling after reports around Volvo.
• Stateside, futures are also in the green but action is much more contained thus far, ES/NQ +0.2%, while the RTY +1.3% outperforms in a recovery from Thursday's data prints.
• Tesla (TSLA) is set to raise prices in China again next week, according to Cailianshe citing an industry insider. "This will be the fourth time for Tesla to raise prices in China so far this year.", according to National Business Daily.
• Li Auto (2015 HK / LI), Wuxi Apptec (2359 HK) to join Hong Kong's Hang Seng Index, effective December 4, via Bloomberg.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
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FX

• DXY back on the brink of 104.00/multiple lows as yields crumble to the benefit of the Yen especially, USD/JPY retreats from 150.77 to sub-149.50 through stops at 150.00; USD/JPY currently near 149.25 lows.
• Sterling stumbles after a slump in UK retail sales, but Cable back above 1.2400 as Dollar reverses sharply.
• Euro retests key tech resistance vs Buck above 1.0850 amidst another stack of option expiries, spanning 1.0800-1.0910.
• Yuan breaks higher as Greenback weakens and PBoC moves to ease funding squeeze.
• PBoC set USD/CNY mid-point at 7.1728 vs exp. 7.2473 (prev. 7.1724)
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FIXED INCOME

• Debt futures fly into the weekend as bullish/dovish impulses garner more momentum.
• Bunds extend to 131.74 and the 10-year yield hovers above 2.50%.
• Gilts reach 97.99 after dismal UK consumption data.
• T-note towards the top of 109-08+/108-22 range ahead of US housing metrics and another host of Fed speakers.
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COMMODITIES

• WTI and Brent Jan futures have been picking up after consolidating around USD 73.25/bbl and USD 77.50/bbl respectively overnight; though the benchmarks remain in relative proximity to Thursday's troughs with substantial ground to recoup before that session's peaks.
• Spot gold inches closer towards USD 2,000/oz as it trades just under the 6th November peak of USD 1,993.15/oz whilst spot silver topped USD 24/oz once again.
• Base metals are softer amid broader weakness in industrial commodities with 3M LME copper briefly dipping under USD 8,200/t, Dalian iron ore continued to slip after the week's market intervention by China; though, a reported recovery in steel demand stemmed the downside.
• Iran set December Iranian light crude price to Asia at Oman/Dubai + USD 4.00/bbl, according to a Reuters source.
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NOTABLE HEADLINES

• ECB's Villeroy says inflation has been lowered considerably and the recent policy pause is justified, via the ACPR conference.
• ECB's Holzmann says "please don't think that this is the last rate hike and there won't be any more"; ECB " may yet be forced to raise rates further if inflation shocks occur", via Econostream.

NOTABLE DATA

• UK Retail Sales MM (Oct) -0.3% vs. Exp. 0.3% (Prev. -0.9%, Rev. -1.1%); predominately because of a fall in automotive fuel sales volumes, but also from both food and non-food stores. Non-store retailing the only main sector to report sales volume growth.
• EU Current Account SA, EUR* (Sep) 31.0B (Prev. 27.7B)
• EU HICP Final YY (Oct) 2.9% vs. Exp. 2.9% (Prev. 2.9%).

NOTABLE US HEADLINES

• US President Biden said they have made substantial progress but noted they still have more work to do on the Indo-Pacific Economic Framework, while he added they are launching a critical minerals dialogue.
• Chinese Commerce Ministry says China and US agreed to hold 1st Commerce Working Group meeting in Q1 2024.

GEOPOLITICS

• Syrian air defences confronted enemy targets and shot down Israeli missiles fired from Golan Heights.
• US Secretary of State Blinken spoke with Israeli Minister Gantz and discussed efforts to accelerate the transit of humanitarian aid into Gaza, as well as efforts to prevent the conflict from widening and to secure the release of hostages. Blinken also stressed the urgent need for affirmative steps to de-escalate tensions in the West Bank including confronting rising levels of settler extremist violence.
• Iraqi armed factions say they targeted the Harir base (hosts US forces) in northern Iraq, according to Al Arabiya
• "A truce agreement is near, including the entry of aid and release of 50 prisoners held by Hamas", via Al Arabiya sources

CRYPTO

• Bitcoin is modestly firmer on the session, with impetus coming from the softer USD, though as has been the case in recent sessions around this time overall action for BTC is limited with ranges relatively contained overall. Currently, BTC is around the mid-point of USD 36-36.5k bounds.

APAC TRADE

• APAC stocks traded mixed with sentiment clouded after the recent soft US data and tumble in oil prices.
• ASX 200 marginally declined with notable underperformance in the energy sector after oil prices slumped to their lowest since July although the downside in the index was cushioned by resilience in miners and defensives.
• Nikkei 225 was indecisive before moving higher amid a lack of fresh catalysts and after balanced comments from BoJ Governor Ueda.
• Hang Seng and Shanghai Comp were pressured amid heavy losses in Alibaba shares after it scrapped its cloud business spinoff due to US chip restrictions and with energy names reeling from the tumble in oil prices.

NOTABLE HEADLINES

• China President Xi said China will continue to improve foreign investment mechanisms and is to further shorten the negative list on foreign investment. Furthermore, Chinese President Xi told Japanese PM Kishida that peaceful coexistence, lasting friendship and cooperation will serve the fundamental interests of Chinese and Japanese people, while he added that both sides should focus on common interests and properly handle differences.
• Japanese PM Kishida said there are many areas of common interests as well as issues between Japan and China, while he was able to reaffirm that they will work towards a strategic relationship based on mutual interests. Kishida also stated that he sought a calm response from China regarding the release of Fukushima wastewater and conveyed strong concerns regarding the situation over the disputed Senkaku Islands, as well as China's increasing joint activities with Russia near Japanese waters.
• BoJ Governor Ueda said Japan's economy is recovering moderately which will likely continue and that they will patiently maintain easy policy, while he noted they cannot say yet with conviction that the price target will be stably and sustainably met. Ueda said they will consider ending YCC and the negative rate if they can expect inflation to stably sustain the target and in what order they will change policy will depend on economic, price and market developments at the time. Furthermore, he said making strong commitments now on how they could change policy could have unintended consequences in markets and the BoJ does not have a specific plan yet on how it will sell ETFs, while he also stated they cannot say now when the BoJ will change ultra-easy policy.
• PBoC has reportedly asked some lenders to cap interest rates on an interbank debt instrument this month, according to Reuters sources, citing rising short-term yields on bank debt and strains in funding markets. Some large-sized commercial lenders were reportedly told not to sell negotiable certificates of deposit (NCDs) at very high rates, according to the sources.
• PBoC and Financial Regulators hold a meeting on financial issues; will strive to stabilise the property market; pledges to stabilise credit growth to strengthen the economy.
• Head of Japan's largest trade union confederation says it will seek wage hikes for workers beyond 2024.

DATA RECAP

• Singapore Non-Oil Exports MM (Oct) 3.4% vs. Exp. 1.5% (Prev. 11.1%); YY (Oct) -3.4% vs. Exp. -6.5% (Prev. 13.2%)
• Chinese FDI (YTD) (Oct) -9.4% (Prev. -8.4%)