• European bourses are mixed, waning off highs whilst US Futures trade with little direction
• Bonds off best levels after having bounced following yesterday’s well-covered US supply
• Dollar remains weaker; whilst the Kiwi outperforms owning to encouraging NZ trade data
• Crude trims Monday's gains while metals benefit from the Dollar pullback & strike action
• Looking ahead, highlights include US National Activity Index, US Fed Non-Manufacturing Business Outlook Survey, Canadian CPI, NBH Policy Announcement, Fed Minutes, Canadian Fall Economic Update, Speeches from ECB’s Lagarde & Schnabel, Supply from US, Earnings from NVIDIA Corp, Analog Devices, Best Buy & Autodesk.

EUROPEAN TRADE

EQUITIES

• European bourses are essentially unchanged, Euro Stoxx 50 U/C, with macro developments a touch light after Monday's US-tech-led performance.
• The FTSE 100 -0.5% is the standout laggard, amid GBP strength after BoE's Bailey on Monday and reinforced by the Treasury Select Committee headlined by the BoE's hawks.
• Sectors are mixed overall: Retail names the relative outperformer amid numerous broker moves for UK firms, while Telecoms, Energy & Banks are the relative laggards.
• Stateside, futures are flat/incrementally lower with the tone a tentative one before FOMC Minutes (early given Thanksgiving) for the November gathering, ES & NQ U/C.
• Baidu Inc (BIDU) Q3 2023 (USD): Diluted EPS 2.80 (exp. 2.28), Revenue 4.72bln (exp. 4.71bln); (CNY): adj. operating profit 7.6bln (exp. 6.9bln). +2.2% in pre-market trade
• Lowe's Companies Inc (LOW) Q3 2023 (USD): EPS 3.06 (exp. 3.03), Revenue 20.5bln (exp. 20.88bln). FY EPS view 13.00 (exp. 13.32) FY Revenue view 86.00bln (exp. 87.55bln). FY Comparable Sales expected to be down -5% (prev. guidance -2% to -4%) -3.5% in pre-market trade
• EU antitrust regulators raid online food delivery firms in two EU countries; companies not named, according to Reuters.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
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FX

The dollar continues to depreciate as DXY slips through Fib support within a 103.48-17 range.

• Kiwi boosted by encouraging NZ trade data as NZD/USD bounces from 0.6030 to 0.6086 and AUD/NZD retreats through 1.0850.
• Yen extends recovery gains against the Greenback between 148.41-147.16 parameters with impetus via softer Treasury yields.
• Aussie and Sterling underpinned by hawkish RBA and BoE vibes as AUD/USD eyes 200 DMA at 0.6589 and Cable 100 DMA just above 1.2500.
• Euro solid on 1.0900 handle vs Buck and testing Fib at 1.0960.
• PBoC set USD/CNY mid-point at 7.1406 vs exp. 7.1677 (prev. 7.1612).
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• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Bonds hit buffers after early EU advances, but retain firm bid, Bunds hold within 131.17-130.82 range.
• Gilts stay afloat of 97.00 following a pullback from 97.51 to 97.09 amidst hawkish BoE TSC testimony.
• T-note sits tight between 109-01+/108-26+ band awaiting US national activity index, Philly Fed non-manufacturing survey and existing home sales ahead of FOMC minutes.
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COMMODITIES

• Crude benchmarks are softer, trimming Monday's upside where the contract settled higher by over USD 1.70/bbl; action since has been more contained with specific developments light ahead of the weekend's OPEC+ meeting.
• Currently, WTI & Brent Jan'24 trade just below USD 77.50/bbl and USD 82.00/bbl respectively, towards the top-end of circa. USD 1/bbl parameters.
• Spot gold is bid, benefitting from the softer USD and modest yield downside, with the yellow metal holding just shy of the USD 1990/oz mark and the session high above that.
• Base metals continue the positive APAC tone with upside driven by the USD and an escalation of strike action at the Las Bambas mine in Peru.
• 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.
• Russian Deputy PM Novak says Russian gas production in 2023 is to be 30bcm less than in 2022, according to Tass.
• Iranian Oil Minister says production will reach 3.6mln BPD in March 2024 and aims for 4mln BPD for the next Iranian year.
• IEA's head of oil market says that even if OPEC+ oil production cuts are extended into 2024, IEA sees a slight surplus in the global market balance; says we are in a deficit now and all stocks are drawing at a fast rate.
• 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.
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BoE TSC

• BoE's Ramsden (Text Release): "Given my assessment of the outlook and the risks I would not rule out having to raise Bank Rate further in the future but I will continue to make my decisions on a meeting to meeting basis."
• BoE's Mann (Text Release): continue to see upside potential for sales and employment in the forward-looking business indicators, as well as continued strong wage and services price growth through next year at least.. "The appropriate path is one that exhibits a higher peak in Bank Rate, with an inversion later. In my view, this path would cement our commitment to the remit." and "To me, the prospects for more persistent inflation imply a need for tighter monetary policy. While I acknowledge that the monetary policy stance has started becoming restrictive, it is so only recently and not by so much. Indeed, comparing August financial market data to the readings around the November MPR, financial conditions have in fact eased as Bank Rate hikes have paused."
• BoE's Bailey reiterates that it's sensible to keep rates where they are; the latest inflation data was largely as expected; inflation will end the year a little lower than BoE expected but not by much. Markets put too much weight on current data releases, BoE is concerned about potential inflation persistence. Markets underestimate the risk of inflation persistence. QT is only having a small impact on yields, possibly 10-15bps.. Adds. if we try to bring inflation back to the target faster by raising rates more now, that would push inflation below the target.
• BoE's Mann (Q&A): more tightness now is important in order to cement the commitment to the 2% inflation target.
• BoE's Ramsden (Q&A): BoE is very clear in distancing itself from market rate expectations.
• BoE's Haskel (Q&A): falling headline CPI not a good guide to inflation trend.

NOTABLE HEADLINES

• EU is reportedly set to place France on a fiscal watch list which is scheduled for release today, according to Bloomberg.
• German Economy Ministry spokesperson says the budget freeze is necessary for the situation and the government is working intensively on solutions.

NOTABLE DATA

• UK PSNB, GBP (Oct) 13.972B GB (Prev. 13.526B GB, Rev. 13.718B GB); ONS says April-October borrowing of 98.3bln is 16.9bln less than the OBR forecast.
• EU New Car Registrations (Oct): +14.6% Y/Y; battery electric 14.2% Y/Y market share; This marked the fifteenth consecutive month of growth, with notable double-digit percentage increases in three of the largest markets: France (+21.9%), Italy (+20%). Click here for more.

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.
• "Qatari government is expected to announce today that it will reach a deal for the release of the hostages. The source added that he hoped nothing would happen on the ground in the coming hours to thwart this", according to a source cited by Axios' Ravid. Subsequently, "As part of the hostage deal, a lull in the fighting in Gaza will be declared for four days, with the possibility of extending it for another two days.", via Axios' Ravid.
• "Qatar reveals that Hamas hostage negotiations have reached the 'closest point' to the agreement", according to Sky News Arabia citing AFP.
• 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.
• Israeli Officials says "There are some technical matters that must be worked on to complete the deal with Hamas ", via Al Arabiya

CRYPTO

• US SEC sued Kraken for operating an online crypto trading platform without registering with the agency, according to a court filing.

APAC TRADE

• 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.

NOTABLE 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. Subsequently, PBoC has reportedly told some banks to bring forward some of the loans and then intend to extend in early 2024 to later this year, via Reuters citing sources; a directive was reportedly issued earlier this week.
• China's major state-owned banks seen buying Dollars via onshore swaps and selling them in spot FX market this week, according to Reuters sources.
• 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); Imports (NZD)(Oct) 7.1B (Prev. 7.2B, Rev. 7.2B)