• APAC stocks traded mixed following the weak handover from the US where sentiment was dampened amid soft data and pre-Thanksgiving positioning.
• FOMC minutes stated the FOMC saw rates remaining restrictive for some time; the minutes were uneventful and had little effect on price action.
• Hamas confirmed an agreement with Israel for a four-day pause in Gaza hostilities and agreed to release around 50 women and children hostages from Gaza in exchange for Israel releasing 150 Palestinian women and children from Israeli jails.
• Chinese government advisers are to recommend a 4.5%-5.5% growth target for 2024, while they noted that maintaining China's growth pace next year requires more fiscal stimulus,
• UK Chancellor Hunt is to reveal an annual GBP 9bln permanent tax break for businesses. Hunt is also expected to cut national insurance for employees and self-employed in the Autumn Statement.
• Binance founder Changpeng Zhao agreed to step down and plead guilty to violating money laundering rules.
• Looking ahead, highlights include UK CBI Trends, US Durable Goods, IJC, EZ Consumer Confidence (Flash), UoM Inflation Expectations (Final), UK Autumn Statement, ECB FSR, Speeches from RBA’’s Bullock, ECB’s Elderson & BoC’s Macklem, Supply from Germany & US. Earnings from Thyssenkrupp, Severn Trent, Kingfisher, Deere & Co.

US TRADE

EQUITIES

• US stocks were lower with risk appetite subdued amid pre-Thanksgiving positioning and after soft data, while the FOMC minutes were stale and noted that the Fed is in a position to proceed carefully whilst stressing the need for restrictive policy for some time. Furthermore, the minutes also stated that inflation risks are skewed to the upside and growth risks to the downside although Fed pricing remained little changed in the wake of the release with nearly four 25bp rate cuts priced across 2024.
• SPX -0.20% at 4,538, NDX -0.58% at 15,933, DJIA -0.18% at 35,088, RUT -1.32% at 1,783.
• Click here for a detailed summary.

FOMC MINUTES

• FOMC minutes stated all participants agreed that the FOMC was in a position to proceed carefully and all in the FOMC saw rates remaining restrictive for some time, while many participants saw measures suggesting long-term treasury yield increases were driven by a rise in term premium. The minutes also stated that all participants agreed that policy decisions at every meeting would continue to be based on the 'totality of incoming information’ and participants noted that further policy tightening would be appropriate if information showed progress towards the inflation goal was insufficient. Furthermore, participants saw labour market conditions as tight but had eased since earlier in the year, while various participants noted downside risks to economic activity, including that credit conditions might tighten more than expected if the domestic banking sector experienced further strains.

NOTABLE HEADLINES

• Nvidia (NVDA) - Q3 adj. EPS 4.02 (exp. 3.37), Q3 revenue USD 18.12bln (exp. 16.18bln). The chipmaker settled 1.75% lower afterhours after initially falling as much as 6.3%; its Q3 results topped expectations, though it warned China sales would decline in Q4; Bloomberg suggested that the results "failed to satisfy the loftier expectations of shareholders who have bet heavily on an artificial intelligence boom."

APAC TRADE

EQUITIES

• APAC stocks traded mixed following the weak handover from the US where sentiment was dampened amid soft data and pre-Thanksgiving positioning, while the latest FOMC minutes were uneventful and had little effect on price action. Furthermore, participants digested the latest geopolitical developments including North Korea’s satellite launch and the agreement between Israel and Hamas for a four-day pause of the fighting in Gaza and a hostages-prisoners swap.
• ASX 200 was rangebound as losses in tech and consumer sectors were counterbalanced by resilience in defensives, while Westpac Leading Index also showed a slight contraction.
• Nikkei 225 was the outperformer and clawed back initial losses in an early turnaround despite the government cutting its view on the overall economy for the first time since January.
• KOSPI was pressured following the satellite launch by North Korea which plans to launch additional spy satellites.
• Hang Seng and Shanghai Comp were cautious with price action rangebound amid a lack of fresh macro drivers from China although the Hong Kong benchmark was cushioned by strength in Baidu post-earnings.
• US equity futures were little changed alongside the uninspiring mood in Asia and after Nvidia's outlook underwhelmed.
• European equity futures are indicative of a marginally higher open with Euro Stoxx 50 +0.1% after the cash market closed down 0.2% yesterday.

FX

• DXY was confined to within a tight range of between 103.47-103.60 after recent soft data and uneventful FOMC minutes which noted that all participants agreed that the FOMC was in a position to proceed carefully and saw rates remaining restrictive for some time.
• EUR/USD lacked direction but was off the prior day’s lows after a mild rebound from support at the 1.0900 level, while there were comments from ECB officials including Lagarde who expects headline inflation to rise again slightly in the coming months.
• GBP/USD took a breather following a return to the 1.2500 territory and as focus turns to the Autumn Statement in which Chancellor Hunt will reportedly reveal a GBP 9bln annual permanent tax break for businesses and is also expected to cut national insurance.
• USD/JPY traded sideways at the 148.00 handle after yesterday’s intraday rebound from a two-month trough.
• Antipodeans were rangebound alongside the mixed risk appetite and non-committal mood across the FX space.
• PBoC set USD/CNY mid-point at 7.1254 vs exp. 7.1468 (prev. 7.1406).

FIXED INCOME

• 10-year UST futures lacked direction after yesterday’s choppy performance in which prices oscillated back and forth of the 109.00 level in holiday-thinning trade amid retailer warnings, a poor 10-year TIPS auction and mixed FOMC minutes.
• Bund futures were pressured and eventually breached the 131.00 level to the downside.
• 10-year JGB futures softened amid resilience in Tokyo stocks and after the BoJ reduced purchase amounts for the 5yr-10yr and 25yr+ maturities in today’s bond-buying operations.

COMMODITIES

• Crude futures were rangebound with upside capped by resistance at the USD 78/bbl level, while prices were unmoved by the substantially larger-than-expected build in headline private sector crude inventories and the confirmation of a temporary Gaza truce.
• US Energy Inventory Data (bbls): Crude +9.1mln (exp. +1.2mln), Gasoline -1.8mln (exp. -0.2mln), Distillates -3.5mln (exp. -0.8mln), Cushing +0.6mln.
• Iraq’s Kurdistan region PM Barzani reportedly played down the prospect of an imminent restart of crude exports through the Iraq-Turkey Pipeline, according to an Argus Media reporter.
• Spot gold traded sideways and made another attempt to reclaim the USD 2,000/oz status.
• Copper futures were subdued and trickled back below USD 3.80/lb alongside the mixed risk appetite.

CRYPTO

• Bitcoin regained composure and nursed some of the losses from yesterday's dip beneath the USD 37,000 level.
• Binance founder Changpeng Zhao agreed to step down and plead guilty to violating money laundering rules, while the exchange will admit wrongdoing and will pay a fine totalling USD 4.3bln, according to WSJ.

NOTABLE ASIA-PAC HEADLINES

• Chinese government advisers are to recommend a 4.5%-5.5% growth target for 2024, while they noted that maintaining China's growth pace next year requires more fiscal stimulus, according to sources via Reuters.
• Japan cut its view on the overall economy for the first time since January and stated that the overall economy is recovering moderately but some areas recently stalled, while it cut its view on capital spending for the first time since December 2021 and stated the pace of pickup in capital spending is pausing.

DATA RECAP

• Singapore GDP QQ (Q3 F) 1.4% vs Exp. 1.1% (Prelim. 1.0%)
• Singapore GDP YY (Q3 F) 1.1% vs Exp. 0.8% (Prelim. 0.7%)

GEOPOLITICS

• Israeli PM Netanyahu said the war will continue after a pause for hostage exchange, while he stated that hostages will be released in stages and that the war is ongoing and will continue until Israel achieves all its goals. Furthermore, the Israeli PM's office confirmed the government voted in favour of the proposed deal for the release of some hostages held in Gaza with 50 hostages, women and children to be released over four days during which there will be a pause in fighting.
• Hamas confirmed an agreement with Israel for a four-day pause in Gaza hostilities and agreed to release around 50 women and children hostages from Gaza in exchange for Israel releasing 150 Palestinian women and children from Israeli jails. Hamas added the truce deal will allow hundreds of trucks of humanitarian, medical and fuel aid to enter all parts of Gaza and said Israel committed to not attack or arrest anyone in all parts of Gaza during the truce period.
• US senior administration official said a rigorous inspection regime will ensure Hamas does not use the pause in fighting to get more weaponry, while the US hopes the pause will also be observed by Hezbollah and Israeli forces in northern Israel.
• US Central Command said the US carried out precision strikes against two facilities in Iraq in response to an attack on US troops.
• US fears that Iran is preparing to provide Russia with advanced short-range ballistic missiles for its military campaign in Ukraine, according to WSJ citing US officials. Furthermore, US officials said Iran has already provided Russia with armed drones, guided aerial bombs and artillery shells, while the White House said the US is going to monitor the Iran-Russia situation and will take appropriate action as needed.
• North Korea said it conducted a successful satellite launch and will launch additional spy satellites in the near future.
• UN Secretary-General strongly condemned North Korea's satellite launch and called for North Korea to fully comply with UN resolutions and return to dialogue, while the South Korean National Security Council condemned North Korea's launch as a violation of UN sanctions
• South Korea announced it is to partially suspend the military agreement signed with North Korea and will resume surveillance activities previously suspended near the border with North Korea, while it was separately reported that the US nuclear submarine USS Santa Fe arrived at a South Korean port, according to Yonhap.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Hunt is to reveal an annual GBP 9bln permanent tax break for businesses and will make the ‘full expensing’ capital allowance regime permanent, according to FT. Hunt is also expected to cut national insurance for employees and self-employed in the Autumn Statement on Wednesday, according to Times Radio's Kate McCann.
• ECB's Schnabel said the disinflation process is projected to slow with inflation moving towards 2% by end-2025, while she noted that longer-term inflation expectations continue to signal some upside risks.
• ECB's Centeno said inflation is falling faster than it climbed and there is a high probability ECB has reached the peak rate.
• France signalled that it wants to delay the introduction of tariffs on EV sales between the UK and EU, removing a big obstacle to a new deal over the levy due to come into effect in January, according to FT.
• Italian Treasury is cancelling several scheduled bond auctions which are not required to meet year-end financing needs.