• European bourses slip whilst US Futures teeter around the unchanged mark with slight underperformance in the CAC 40
• Bonds retreat but have reclaimed some of the post-UK supply marked sell-off in Gilts
• DXY is around flat with slight outperformance in the CAD amid crude; G10s generally contained
• Oil continues to extend gains while metals are flat/mixed in the absence of major catalysts
• Looking ahead, US Consumer Confidence, Richmond Fed Index, Fed Discount Rate Minutes, Speeches from BoE’s Haskel, ECB's Lagarde, Lane, Fed’s Goolsbee, Waller, Bowman & Barr, Supply from US.

EUROPEAN TRADE

EQUITIES

• European bourses, Euro Stoxx 50 -0.3%, continue to slip with modest underperformance in the CAC 40 -0.4%, hampered by Luxury names after LVMH price target reductions.
• European sectors are mostly in the red, with Consumer Products and Services at the foot of the sectors weighed by Luxury names.
• Energy in the green, with crude prices lifting off lows throughout the European session; Utilities helped by RWE plans to increase dividends by 5-10% each year until 2030.
• US Futures are all teetering around the unchanged mark with specifics light thus far ahead of several Fed members.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
• Click here for more details.

FX

• DXY clings to 103.00 handle in the face of negative rebalancing signals on spot month end, but barely within a 103.07-32 range.
• Loonie underpinned by rebound in oil and straddling 1.3600 vs Greenback
• Euro continues to stall around 1.0960 Fib resistance against Dollar as hawkish ECB vibes vie with weak Eurozone M3 metrics.
• Yen extends recovery gains vs Buck to probe 148.00 before fading.
• Sterling retains 1.2600+ status ahead of comments from BoE hawk Haskel and Aussie extends beyond 0.6600 as RBA's Bullock underlines upside inflation risks to outweigh retail sales miss.
• Kiwi cautious pre-RBNZ as NZD/USD retreats through 0.6100.
• PBoC set USD/CNY mid-point at 7.1132 vs exp. 7.1432 (prev. 7.1159).
• Click here for more details.
• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Debt futures fade after extending recovery gains.
• Bunds down in sympathy with BTPs within 131.65-20 and 114.68-00 respective ranges.
• Gilts undermined by hefty tail on 30 year DMO sale between 96.47-95.89 parameters.
• T-note nearer 108-27 trough than 109-03+ peak ahead of 7 year auction and a slew of Fed speakers.
• UK sells GBP 2.75bln 3.75% 2053 Gilt: b/c 2.34x (prev. 2.60x), average yield 4.664% (prev. 4.926%) & tail 1.5bps (prev. 0.8bps)
• Click here for more details.

COMMODITIES

• Crude continues to extend gains, despite a lack of catalysts whilst geopolitics & OPEC remains in focus.
• Metals are flat/mixed in the absence of major catalysts, with Gold still holding onto yesterday's gains and comfortably above the USD 2000/oz level.
• Energy Intel noted there is still no resolution regarding new OPEC+ production baselines and cuts, while it added that the meeting is still scheduled to take place virtually on Thursday but it understands that a further delay cannot be ruled out.
• OPEC to hold an online meeting at 10:00GMT/05:00EST on Thursday; 13:00GMT/08:00EST the JMMC will meet; 14:00GMT/09:00EST the full OPEC+ meeting will occur, via Reuters citing sources.
• Click here for more details.

NOTABLE HEADLINES

• BoE Deputy Governor Ramsden said UK inflation is more homegrown and monetary policy is likely to need to be restrictive for an extended period of time to get inflation back to the 2% target, while he doesn't see financial stability grounds for adjusting quantitative easing or the setting of the level of interest rates.
• ECB's Nagel says rate hikes are not necessarily over, would have to hike again if inflation outlook worsened. Inflation outlook encouraging, but core shows dynamics continue to be strong. Premature to discuss rate cuts, prefer to err on the side of caution.
• German Chancellor Scholz says they will be able to end the energy price break at year-end given lower prices and gas storage levels. Working to make all decisions required for the 2024 budget as soon as possible. German States have the greatest interest in securing investments in the chip industry, climate-friendly steel and battery plants.
• In December, Greece will repay EUR 5.3bln of EZ bailout funds ahead of schedule, via Reuters citing Finance Ministry Officials; in 2024, considering another early repayment

DATA RECAP

• UK BRC Shop Price Index YY (Nov) 4.3% (Prev. 5.2%)
• German GfK Consumer Sentiment (Dec) -27.8 vs. Exp. -27.9 (Prev. -28.1, Rev. -28.3)
• French Consumer Confidence (Nov) 87.0 vs. Exp. 84.0 (Prev. 84.0)
• EU Money-M3 Annual Growth (Oct) -1.0% vs. Exp. -0.9% (Prev. -1.2%)
• EU Loans to Non-Financials (Oct) -0.3% (Prev. 0.2%); Households (Oct) 0.6% (Prev. 0.8%)

NOTABLE US HEADLINES

• White House said the US is seeing lower prices on items from fuel to food.
• Click here for the US Early Morning Note.

GEOPOLITICS

ISRAEL-HAMAS

• Israel released 30 Palestinian children and three women under the truce agreement and it received a list of ten hostages to be released by Hamas on Tuesday, while it was separately reported that Israel approved a list of 50 female Palestinian prisoners for possible release if additional Israeli hostages are freed, according to Reuters.
• Israeli Defence Minister said when they return to fighting after the truce, the fighting will be stronger and will include all parts of the Gaza Strip, according to Sky News Arabia.
• Hamas Leader Khalil Al-Hayya told Al Jazeera they hope they can extend the truce for a longer period, according to Al Jazeera.
• Al Jazeera reported via social media platform X that Israeli occupation forces raided Beitunia which is west of Ramallah.
• "Palestinian media: Israeli forces fire heavily east of Khan Yunis in the southern Gaza Strip", according to Al Arabiya.
• US Secretary of State Blinken is to visit Israel, the West Bank and UAE later this week and will stress in meetings the need to sustain increased flow of humanitarian assistance to Gaza and secure the release of all hostages, according to a US official
• "Israeli forces fired a shell at a house in Tubas in the West Bank", according to Al Arabiya; Subsequently, "Lebanese news agency: An Israeli shell landed near a border town in southern Lebanon", according to AshaqNews
• Qatar Foreign Ministry says there have been "minimal breaches" of the Gaza truce, but they have not threatened the overall agreement
• CIA director Burns is to meet today in Doha with the Mossad director Barnea & Qatar's PM to discuss a possible second extension of the pause in Gaza, via Axios; contingent on Hamas releasing more hostages.

NORTH KOREA

• North Korea said its spy satellite took photos of the White House, the Pentagon and a key US naval base, according to Yonhap.

CRYPTO

• Bitcoin has been contained throughout the session thus far, in-fitting with the general tone; currently, pivoting USD 37k.
• Interactive Brokers (IBKR) expanded its cryptocurrency trading to retail investors in Hong Kong.

APAC TRADE

• APAC stocks traded mixed amid the lower yield environment and after the lacklustre performance of US counterparts.
• ASX 200 was higher with early outperformance on softer yields and following a break above the 7,000 level although the index finished off intraday highs following a surprise contraction in Retail Sales data.
• Nikkei 225 failed to hold on to opening gains and was pressured as a firmer currency paved the way for profit-taking.
• Hang Seng and Shanghai Comp diverged despite recent support pledges by the PBoC as a report also suggested that China’s property lifeline exposes banks to large losses and job reductions.

NOTABLE HEADLINES

• PBoC Governor Pan said China's economy continued to gain momentum in recovery and reiterated that China's economy is expected to achieve its GDP growth target for 2023, while he added that China's CPI is gradually bottoming out and consumption's contribution to the domestic economy is on the rise. Furthermore, Pan said they will continue to keep monetary policy accommodative and will make it easier for foreign financial institutions to do business in China, according to Reuters.
• Chinese Premier Li Qiang said China is willing to build closer supply chain linkages with all countries, while it opposes any form of decoupling and cutting off of supply chains. Li added that China will continue to create an international and rule-of-law-based business environment, according to Reuters.
• China’s property lifeline reportedly exposes banks to large losses and job reductions, according to Bloomberg.
• Meituan (3690 HK) reports Q3 (CNY): Revenue 76.47bln (exp. 76.01bln)

DATA RECAP

• Australian Retail Sales MM (Oct F) -0.2% vs. Exp. 0.1% (Prev. 0.9%)