• APAC stocks traded mostly higher following the tech-led gains in the US where Microsoft shares climbed to a record high in otherwise quiet trade and with Chinese markets underpinned by property sector support.
• USD/JPY continued to trickle lower and breached the 148.00 level to the downside despite softening JGB yields; DXY remained pressured firmly beneath the 104.00 level and Antipodeans were underpinned.
• RBA November Minutes stated that staff projections for inflation at the meeting assumed one or two more rate hikes and the Board noted the Cash Rate remained below rates in many other countries, while rising house prices could indicate that policy was not especially restrictive.
• BoE Governor Bailey said it is far too early to be thinking about rate cuts and that returning inflation to the target is an "absolute priority", while he said they will take no chances when inflation is high.
• Hamas chief said that they are close to reaching an agreement on a temporary ceasefire, arrangements for entry of aid into Gaza and a hostages-prisoners swap deal.
• Looking ahead, highlights include UK PSNB, US National Activity Index, US Fed Non-Manufacturing Business Outlook Survey, Canadian CPI, NBH Policy Announcement, Fed Minutes, Canadian Fall Economic Update, BoE Treasury Select Hearing, Speeches from ECB’s Lagarde & Schnabel, Supply from Germany & US, Earnings from Lowe's, NVIDIA Corp, Analog Devices, Best Buy & Autodesk.

US TRADE

EQUITIES

• US stocks were firmer with outperformance in the Nasdaq amid a big tech bias which was underscored by Microsoft's (MSFT) shares climbing to a record high amid the fluid OpenAI situation in an otherwise quiet session, while attention was also on treasuries with bull-flattening seen amid a well-received 20yr auction.
• SPX +0.74% at 4,547, NDX +1.19% at 16,027, DJIA +0.58% at 35,151, RUT +0.52% at 1,807.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Barkin (2024 voter) said it is not a big time for offering forward guidance and they will be data dependent, while he noted that overall and core inflation numbers are "coming down nicely", but added that a lot of that is for goods and business contacts on the ground report they are still raising prices faster than before the pandemic, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks traded mostly higher following the tech-led gains in the US where Microsoft shares climbed to a record high in otherwise quiet trade and with Chinese markets underpinned by property sector support.
• ASX 200 was kept afloat as strength in the mining and materials sectors atoned for the slack in tech and defensives but with gains limited after the hawkish undertones from the RBA Minutes.
• Nikkei 225 lacked firm direction as headwinds from recent JPY strength were counterbalanced by the decline in JGB yields.
• Hang Seng and Shanghai Comp were underpinned by support-related optimism in which the Hong Kong benchmark was led by property stocks to briefly above the 18,000 level after reports that China is drafting a "whitelist" of 50 developers for a financing boost, while China also asked government officials to increase financial support for the economy and looks to further bolster major strategies.
• US equity futures flatlined during Asia-Pac hours but held on to the prior day's spoils ahead of the FOMC Minutes.
• European equity futures are indicative of a marginally higher open with Euro Stoxx 50 +0.1% after the cash market closed flat yesterday.

FX

• DXY remained pressured firmly beneath the 104.00 level and closer to 103.00 owing to the strength in the Dollar’s major counterparts including outperformance in Asia-Pac currencies, while recent ‘data-dependant’ rhetoric from Fed’s Barkin had little effect on price action with the focus now turning to the approaching FOMC Minutes.
• EUR/USD extended on the prior day’s advances after breaching through resistance at the 1.0950 level.
• GBP/USD made further headway north of 1.2500 following comments from BoE Governor Bailey that it is too early to be thinking about rate cuts, while he added returning inflation to the target is an absolute priority and will not take any chances when inflation is high.
• USD/JPY continued to trickle lower and breached the 148.00 level to the downside despite softening JGB yields
• Antipodeans were underpinned by hawkish-leaning RBA Minutes, stronger New Zealand Exports and a firmer PBoC reference rate.
• PBoC set USD/CNY mid-point at 7.1406 vs exp. 7.1677 (prev. 7.1612).

FIXED INCOME

• 10-year UST futures marginally extended on the prior day’s highs and tested the 109.00 level after the recent bull flattening which was spurred alongside a strong 20-year auction stateside.
• Bund futures were firmer and just about returned to the 131.00 territory following Monday’s intraday recovery.
• 10-year JGB futures advanced above 146.00 as long-term yields eased to multi-month lows and with prices also supported by the 20-year JGB auction which showed stronger results across all metrics.

COMMODITIES

• Crude futures marginally pulled back with WTI crude futures below the USD 78/bbl level although the downside was stemmed by the mostly positive risk tone, China stimulus hopes and prospects for deeper OPEC+ production cuts.
• Goldman Sachs said its statistical model of OPEC decisions suggests that deeper cuts should not be ruled out given the fall in speculative positioning and time spreads, as well as higher-than-expected inventories.
• Spot gold steadily advanced throughout the session to above USD 1992/oz as the greenback remained pressured.
• Copper futures sat at the prior day's best levels above USD 3.80/lb amid supply disruptions as First Quantum Minerals considers putting the Panama copper mine in maintenance mode and with the union at the Las Bambas mine in Peru to go on an indefinite strike.
• Union at the MMG (1208 HK) Las Bambas mine in Peru is to go on indefinite strike beginning November 28th, according to the union secretary-general.
• Codelco is to spend an extra USD 720mln overhauling its key copper mine with the Chuquicamata mine being converted from an open pit to an underground mine, according to Bloomberg.

CRYPTO

• Bitcoin was ultimately flat after prices oscillated back and forth of the USD 37,500 level.
• US SEC sued Kraken for operating an online crypto trading platform without registering with the agency, according to a court filing.

NOTABLE ASIA-PAC HEADLINES

• PBoC reportedly encouraged some lenders to cap the amount of new loans they will issue in early 2024 and shift some of the loans forward to this year, according to Bloomberg.
• White House's Kirby said US President Biden and Chinese President Xi agreed to meet again but no date has been specified.
• RBA Governor Bullock said she is increasingly optimistic about the labour market and noted that inflation is a crucial challenge over the next one or two years.
• RBA November Meeting Minutes stated that they considered the case for raising rates or holding steady and the Board saw a credible case that a rate rise was not needed at the meeting but judged the case for hiking was the stronger one as inflation risk increased. RBA stated that whether further tightening is required would depend on data and assessment of risks, while it saw a risk that inflation expectations could increase if rates were not raised and noted is important to prevent even a modest further increase in inflation expectations. Furthermore, it stated that staff projections for inflation at the meeting assumed one or two more rate hikes and the Board noted the Cash Rate remained below rates in many other countries, as well as acknowledged that rising house prices could indicate that policy was not especially restrictive.

DATA RECAP

• New Zealand Trade Balance (NZD)(Oct) -1.7B (Prev. -2.3B, Rev. -2.4B)
• New Zealand Exports (NZD)(Oct) 5.4B (Prev. 4.9B, Rev. 4.8B)
• New Zealand Imports (NZD)(Oct) 7.1B (Prev. 7.2B, Rev. 7.2B)

GEOPOLITICS

• Hamas chief said that they are close to reaching a temporary ceasefire agreement and that Hamas delivered its response to Qatari officials, according to Reuters. Furthermore, a Hamas official noted that ongoing talks are about a temporary ceasefire for a number of days, arrangements for entry of aid into Gaza and a hostages-prisoners swap deal.
• Japan's Coast Guard said it received notice of a satellite rocket launch plan towards the Yellow Sea, East China Sea, and east of the Philippines' Luzon island between November 22nd and December 1st. Japanese PM Kishida said even if it is for the purpose of a satellite, any North Korean launch could affect the safety of Japanese citizens, while his office stated that Japan will work with the US, South Korea, and others to strongly urge North Korea not to launch the satellite rocket.
• South Korea issued a sail warning following the recent notice by North Korea for a satellite launch and the South Korean Defence Ministry said it is watching North Korea's satellite launch plan with the possibility it would succeed. Furthermore, South Korea's military announced that US aircraft carrier Carl Vinson arrived at a South Korean port.

EU/UK

NOTABLE HEADLINES

• BoE Governor Bailey said it is far too early to be thinking about rate cuts and that returning inflation to the target is an "absolute priority", while he said they will take no chances when inflation is high. Bailey added that interest rates will have to stay high enough for long enough to make sure the bank gets back to the 2% target and that they must watch for further signs of inflation persistence that may require interest rates to climb again.
• ECB's Villeroy said their reliance on forward guidance was excessive and should be more modest with future guidance, while he sees rates plateauing for at least the next several meetings and the next few quarters. Villeroy also suggested further bond volatility and renewed increases would be another reason not to hike rates, as well as noted that they will have to discontinue PEPP reinvestments in due time and possibly earlier than end-2024.
• German industrial projects are in jeopardy including chip factories, decarbonised steel production, and expanding the battery supply chain after the recent court ruling regarding the federal budget, according to Reuters sources.
• EU is reportedly set to place France on a fiscal watch list which is scheduled for release today, according to Bloomberg.