• APAC stocks traded mixed in the absence of a lead from Wall St and as markets headed into the start of the Israel-Hamas truce.
• DXY traded rangebound amid a lack of drivers and in holiday conditions with many in the US likely to stay away for Black Friday.
• 10-year UST futures trickled further below 109.00 as yields edged higher and with demand hampered by thinned conditions.
• A four-day truce in the Israel-Hamas war took effect at 7:00 am local time (05:00 GMT) on Friday, with hostages held in the Gaza Strip set to be released later in the day in exchange for Palestinian prisoners.
• OPEC+ is moving closer toward a compromise with African oil producers, according to Reuters citing two OPEC+ sources.
• Looking ahead, highlights include German GDP & Ifo, Canadian Retail Sales, US PMI (Flash), Speeches from ECB’s Lagarde, de Cos & de Guindos, Early Market Closures in the US Post-Thanksgiving.
• The Newsquawk desk will operate a normal service today until 18:15GMT/13:15EST, upon which the desk will close.

24th November 2023

LOOKING AHEAD

• Highlights include German GDP & Ifo, Canadian Retail Sales, US PMI (Flash), Speeches from ECB’s Lagarde, de Cos & de Guindos, Early Market Closures in the US Post-Thanksgiving.
• The Newsquawk desk will operate a normal service today until 18:15GMT/13:15EST, upon which the desk will close.
• Click here for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US markets were closed for Thanksgiving Day.

APAC TRADE

EQUITIES

• APAC stocks traded mixed in the absence of a lead from Wall St and as markets headed into the start of the Israel-Hamas truce.
• ASX 200 was led higher by strength in utilities, financials and the energy sector albeit with gains capped by tech weakness and after an Australian warship sailed through the Taiwan Strait which risks stoking frictions between Australia and its largest trading partner.
• Nikkei 225 outperformed on return from its holiday closure as participants digest data releases including national CPI which printed softer than expected although mostly accelerated from the previous month.
• Hang Seng and Shanghai Comp were pressured despite the lack of obvious catalysts, while PBoC liquidity efforts and news that China is mulling unprecedented support for the property sector by allowing banks to offer unsecured short-term loans to qualified developers have failed to support the risk tone.
• US equity futures lacked direction with volumes to remain light and markets set for an early closure on Black Friday.
• European equity futures are indicative of a marginally softer open with Euro Stoxx 50 -0.1% after the cash market closed up 0.2% yesterday.

FX

• DXY traded rangebound amid a lack of drivers and in holiday conditions with many in the US likely to stay away for Black Friday.
• EUR/USD traded on both sides of the 1.0900 level with participants looking to today’s scheduled ECB speakers for a catalyst.
• GBP/USD was indecisive at the 1.2500 handle after momentum from yesterday’s encouraging PMI data waned.
• USD/JPY remained near 149.50 after the latest inflation data and mixed PMIs from Japan did little to spur price action.
• Antipodeans were little changed amid the mixed risk appetite and lacklustre commodities complex.
• PBoC set USD/CNY mid-point at 7.1151 vs exp. 7.1440 (prev. 7.1212)

FIXED INCOME

• 10-year UST futures trickled further below 109.00 as yields edged higher and with demand hampered by thinned conditions.
• Bund futures languished at the prior day’s lows firmly beneath the 131.00 level with prices not helped by recent ECB rhetoric.
• 10-year JGB futures were pressured amid weakness in peers and mixed Japanese data, while prices also failed to benefit from the firmer demand at the enhanced liquidity auction in the long end.

COMMODITIES

• Crude futures were lacklustre in the absence of any major catalysts and after the postponement of the OPEC+ meeting which will now be held online on November 30th, while it was also reported that the group were moving closer towards a compromise.
• OPEC+ is moving closer towards a compromise with African oil producers, according to Reuters citing two OPEC+ sources.
• Spot gold was little changed beneath the psychological USD 2,000/oz level amid an uneventful dollar.
• Copper futures eked mild gains with price action indecisive amid the mixed risk appetite in Asian trade.

CRYPTO

• Bitcoin traded flat and took a breather after the prior day's rebound from support near the USD 37,000 level.

NOTABLE ASIA-PAC HEADLINES

• WHO held talks with Chinese health authorities in which requested data on the upsurge of respiratory illnesses among children in northern China was provided and no changes in the disease presentation were reported by Chinese health authorities. Furthermore, Chinese health authorities said the rise in respiratory illness has not resulted in patient loads exceeding hospital capacities and there has been no detection of unusual or novel pathogens or unusual clinical presentations including in Beijing and Liaoning.
• Chinese Premier Li met with the French Foreign Minister in Beijing and said that China and France's relationship is developing better in all aspects this year, according to Reuters.
• US Navy operations chief is excited by prospects of improved communications with the Chinese military and said work is needed to solidify the next steps with the Chinese military, according to Reuters.
• New Zealand's National, NZ First and ACT parties signed a coalition agreement to form a government with Winston Peters appointed as Deputy PM for the first half of the three-year parliamentary term and David Seymour to be Deputy PM in the second half, while Nicola Willis is to be appointed as Finance Minister. Furthermore, incoming PM Luxon said the Reserve Bank Act will be amended to focus monetary policy on price stability and the incoming government's policy includes repealing the ban on offshore oil and gas exploration.

DATA RECAP

• Japanese National CPI YY (Oct) 3.3% vs. Exp. 3.4% (Prev. 3.0%)
• Japanese National CPI Ex. Fresh Food YY (Oct) 2.9% vs. Exp. 3.0% (Prev. 2.8%)
• Japanese National CPI Ex. Fresh Food & Energy YY (Oct) 4.0% vs. Exp. 4.1% (Prev. 4.2%)
• Japanese Manufacturing PMI Flash (Nov) 48.1 (Prev. 48.7)
• Japanese Services PMI Flash (Nov) 51.7 (Prev. 51.6)
• Japanese Composite PMI Flash (Nov) 50.0 (Prev. 50.5)

GEOPOLITICS

• A four-day truce in the Israel-Hamas war took effect at 7:00 am local time (05:00 GMT) on Friday, with hostages held in the Gaza Strip set to be released later in the day in exchange for Palestinian prisoners, according to AFP.
• Israel’s military said achieving control over the northern half of Gaza is only the first stage in the campaign to destroy Hamas, while they are preparing for the next stages and are looking forward in the coming days in which they will focus on planning and fulfilling the next stages of the war, according to Reuters.
• Israeli military sounded sirens in two villages near Gaza warning of possible rocket launches despite the touted start of the truce.
• Hamas’ armed wing spokesperson called for an escalation of the confrontation with Israel on all resistance fronts.
• Taiwan's Defence Ministry said an Australian warship sailed through the Taiwan Strait.
• The White House is reportedly concerned that the UK's Rwanda plan undermines the Good Friday agreement in Northern Ireland, according to The Times.

EU/UK

NOTABLE HEADLINES

• BoE's Pill said the challenge for the Bank and other central banks is that headline inflation is coming down, while he added that economic activity and employment growth are weakening and that the central bank cannot afford to ease off tight monetary policy. Pill stated that UK monetary policy is in a difficult phase and warned of stubbornly high price pressures in the British economy, as well as noted that the MPC had to resist the temptation to declare victory and move on from battle to quash inflation, according to FT.
• ECB's Villeroy said he doesn't think the ECB will raise rates again unless there is an unexpected event, while he noted that a gradual reduction in rates will come one day, but added that they are not there yet.
• German Finance Minister Lindner confirmed the debt brake suspension for 2023 but added the suspension does not mean new debt.

DATA RECAP

• UK GfK Consumer Confidence (Nov) -24 vs. Exp. -28 (Prev. -30)