• APAC stocks were subdued for most of the session before edging higher in holiday-quietened conditions owing to market closures in the US and Japan.
• DXY marginally softened, EUR/USD nursed the prior day’s losses, and Antipodeans were firmer with NZD/USD the outperformer.
• Israel’s military said they do not know when the ceasefire will take effect; Iran's Foreign Minister said if the truce between Hamas and Israel does not continue, the war will spread.
• German Federal government decided to discontinue the programme for inflation-linked bonds with no further inflation-linked Federal securities to be issued from 2024
• Looking ahead, highlights include French, German, EZ & UK PMI (Flash), Japanese CPI, Riksbank, SARB & CBRT Policy Announcements, ECB Minutes & Banxico Minutes, Speeches from Riksbank Thedeen, ECB’s Schnabel & Cipollone, US Thanksgiving Holiday.
• The Newsquawk desk will operate a normal service on Thursday 23rd November until 18:00GMT/13:00EST, upon which the desk will close and then re-open later at 22:00GMT/17:00EST for the beginning of the Asia-Pacific session.

23rd November 2023

LOOKING AHEAD

• Highlights include French, German, EZ & UK PMI (Flash), Japanese CPI, Riksbank, SARB & CBRT Policy Announcements, ECB Minutes & Banxico Minutes, Speeches from Riksbank Thedeen, ECB’s Schnabel & Cipollone, US Thanksgiving Holiday.
• The Newsquawk desk will operate a normal service on Thursday 23rd November until 18:00GMT/13:00EST, upon which the desk will close and then re-open later at 22:00GMT/17:00EST for the beginning of the Asia-Pacific session.
• Click here for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks gradually edged higher heading into the Thanksgiving holiday with US data points front-loaded, while the jobless claims data was the main highlight as initial claims saw a notable decline and continued claims fell for the first time since early September.
• SPX +0.41% at 4,556, NDX +0.43% at 16,001, DJIA +0.53% at 35,273, RUT +0.69% at 1,795.
• Click here for a detailed summary.

APAC TRADE

EQUITIES

• APAC stocks were subdued for most of the session before edging higher in holiday-quietened conditions owing to market closures in the US and Japan.
• ASX 200 was dragged lower by losses in the commodity-related sectors and with sentiment dampened by weak Australian flash PMIs which showed deeper contractions in manufacturing and services activity.
• KOSPI was indecisive amid tensions after another launch by North Korea on Wednesday which plans to restore military measures.
• Hang Seng and Shanghai Comp were lacklustre albeit with the downside stemmed as developers benefitted from recent support pledges including Country Garden Holdings which was placed on the draft list of firms to be supported by China.
• US equity futures took a breather after yesterday's gains with participants now away for Thanksgiving Day.
• European equity futures are indicative of a marginally softer open with Euro Stoxx 50 -0.1% after the cash market closed up 0.5% yesterday.

FX

• DXY marginally softened with participants stateside now away for the Thanksgiving holiday although losses were limited amid the lack of fresh catalysts and after recent notable declines in jobless claims data.
• EUR/USD nursed the prior day’s losses and just about reclaimed the 1.0900 status after recent ECB commentary and with attention also on the German fiscal situation including the decision to discontinue issuing inflation-linked bonds from next year.
• GBP/USD recovered from the prior day’s trough near the 1.2450 level and returned to the 1.2500 territory in otherwise tepid trade after the Autumn statement.
• USD/JPY was subdued and briefly tested support around 149.00 amid the absence of Japanese participants.
• Antipodeans were firmer with NZD/USD the outperformer on cross-related flows, while it was later reported that coalition talks have concluded with New Zealand's incoming PM Luxon hoping to be sworn in on Monday.
• PBoC set USD/CNY mid-point at 7.1212 vs exp. 7.1512 (prev. 7.1254).
• BoC Governor Macklem said interest rates may now be restrictive enough and that excess demand that made it too easy to raise prices is now gone but added the BoC is prepared to raise the policy rate further if high inflation persists.
• Brazil’s government forecasts a 2023 primary deficit of BRL 177.4bln (prev. deficit of BRL 141.4bln in Sept forecast), equal to 1.7% of GDP (prev. 1.3%). Furthermore, 2023 net revenue is seen at BRL 1.901tln (prev. 1.915tln) and primary spending seen at 2.078tln (prev. 2.056tln).

FIXED INCOME

• 10-year UST futures were rangebound amid the Thanksgiving holiday in the US and with overnight cash treasuries trade also shut due to the Tokyo closure, although prices were well off the prior day’s lows which were seen in the wake of a drop in jobless claims.
• Bund futures remained afloat north of the 131.00 level but lacked firm direction after recent price swings and fiscal developments in Germany including an unprecedented budget freeze and discontinuation of inflation-indexed bond issuances.

COMMODITIES

• Crude futures were mildly pressured overnight and WTI briefly dipped below USD 76/bbl amid residual headwinds from the delay of the OPEC+ meeting due to disagreement over some members' oil production figures and associated quotas with the issues linked to African countries.
• Saudi September oil exports fell by SAR 17.2bln or 17.1% Y/Y, according to government data.
• Baker Hughes US Rig Count (Nov 18th-22nd): Oil flat at 500, Nat Gas +3 at 117, Total +4 at 622.
• BSEE estimated that roughly 61k BPD have been shut in due to the Gulf of Mexico oil spill.
• Energy Intel's Bakr noted there is a possibility that the next OPEC+ meeting ends up being a virtual one, citing some delegates.
• Spot gold eked marginal gains on the back of a softer dollar although stalled just shy of the USD 2,000/oz level.
• Copper futures were uneventful with prices flat alongside the mixed risk sentiment and holiday conditions.
• Chile's Codelco noted it has reached production 'turning point' after declines and is making progress on key projects.
• China's NDRC will step up regulation on iron ore futures and spot trading, while it urged iron ore firms not to hoard and hype up prices.

CRYPTO

• Bitcoin took a breather after the prior day's crypto rally which propelled prices above the USD 37,000 level.

NOTABLE ASIA-PAC HEADLINES

• China's Foreign Ministry said China and Germany should work together to inject more stability and certainty into the troubled world, while it added that China has always regarded Germany as an important partner for peaceful differences and win-win cooperation.
• New Zealand's incoming PM Luxon said talks to form a government have concluded, and parties are now going through their processes for a final sign-off, while the processes are expected to be completed Thursday evening and he hopes to be sworn in on Monday.

DATA RECAP

• Australian Judo Bank Manufacturing PMI Flash (Nov) 47.7 (Prev. 48.2)
• Australian Judo Bank Services PMI Flash (Nov) 46.3 (Prev. 47.9)
• Australian Judo Bank Composite PMI Flash (Nov) 46.4 (Prev. 47.6)

GEOPOLITICS

• Israel’s military said they do not know when the ceasefire will take effect but added that the army is ready, while the Israeli PM's office later stated that the release of hostages will not occur before Friday.
• Qatari Foreign Ministry said talks to implement the deal between Hamas and Israel are continuing and proceeding positively, while work is continuing to ensure a speedy start of the truce and the announcement of the start date of the truce will be in the coming hours.
• US President Biden further emphasised the importance of maintaining calm along the Lebanese and in the West Bank during a call with Israeli PM Netanyahu, while they agreed the work is not yet done and Biden said he will work on securing the release of all hostages.
• USS Thomas Hudner reportedly shot down multiple one-way attack drones launched from Houthi-controlled areas in Yemen this morning, according to a source via social media platform X citing the US Central Command.
• Iran's Foreign Minister said if the truce between Hamas and Israel does not continue, the war will spread.
• Turkey informed NATO that Sweden's membership ratification will not be completed by next week's foreign ministers meeting, according to Reuters sources.
• North Korea said it would not be bound by the inter-Korean deal and vowed to restore all military measures, while it added that South Korea must pay dearly for their irresponsible and grave political and military provocations, according to Yonhap and KCNA.
• South Korea's intelligence agency said North Korea's satellite was successful and placed into orbit, while it added that North Korea received help from Russia. It also stated that North Korea could launch additional satellites next year and might conduct a nuclear test next year.

EU/UK

NOTABLE HEADLINES

• UK DMO CEO said the rebound in the UK debt market since the mini-budget is "notable" and that the BoE's QT has not affected the gilt issuance strategy but added that slow demand for long-term gilts is likely to continue, according to Reuters.
• ECB's Nagel believes the Bank is close to the level seen as the terminal rate and cannot say if the ECB will raise rates again but thinks ECB rates will stay where they are for a while. ECB's Nagel also said it is important for high-debt countries to reduce it and noted that German growth is flattish this year but will be a little bit better next year.
• German Chancellor Scholz said he expects a deal will be achieved on the European stability pact soon, while he said he thinks it is correct to check carefully the impact of the court ruling when asked if the 2024 budget will pass.
• German Federal government decided to discontinue the programme for inflation-linked bonds with no further inflation-linked Federal securities to be issued from 2024, according to the German Finance Agency.
• Italian PM Meloni said regarding new EU budget rules that they are making progress day by day in a negotiation that is not easy, while she said they want a deal that will be possible for Italy to comply with in the coming years.
• Dutch election exit poll has the Freedom Party (PVV) run by Wilders on course to win the most seats, followed by Timmermans's GL+PvdA alliance. However, right-wing PVV may struggle to form a working coalition that can command a 76-seat majority. As is often the case, simultaneous coalition discussions from both PVV and GL+PvdA may not result in a working majority for several months, with incumbent Ruttee remaining as caretaker until there is a resolution. Final results expected in Thursday's session.