• APAC stocks were mixed after the choppy performance on Wall St where stocks wavered, Treasuries rallied, and the Dollar dipped on dovish Fed rhetoric.
• DXY was rangebound and traded on both sides of the 102.50 level overnight after declining yesterday on dovish comments from Fed hawk Waller; 10-year UST futures remained underpinned after the prior day’s bull-steepening.
• RBNZ opted for a hawkish hold where it kept rates unchanged but slightly raised its OCR forecasts from March 2024 to March 2025.
• Israeli negotiators are offering Hamas a further three days of ceasefire through to Sunday morning if the group releases all the remaining women and children they believe it is holding, according to sources close to talks in Qatar cited by The Times.
• Berkshire Hathaway's Charlie Munger passed away peacefully at the age of 99, according to a statement.
• Looking ahead, highlights include German Prelim. CPI, German Import Prices, Spanish CPI, Italian Consumer Confidence, UK Mortgage Lending, EZ Economic Sentiment, US MBA’s, GDP Estimates, PCE Prices, Advance Goods Trade Balance, Japanese Industrial Production, Fed Beige Book, Speeches from BoE's Bailey & Fed’s Mester, Supply from UK, Germany & Italy.

LOOKING AHEAD

• Highlights include German Prelim. CPI, German Import Prices, Spanish CPI, Italian Consumer Confidence, UK Mortgage Lending, EZ Economic Sentiment, US MBA’s, GDP Estimates, PCE Prices, Advance Goods Trade Balance, Japanese Industrial Production, Fed Beige Book, Speeches from BoE's Bailey & Fed’s Mester, Supply from UK, Germany & Italy
• Click here for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks were choppy and although most indices finished in the green, gains were capped after fading the initial rally that was spurred by dovish comments from Fed's Waller who talked up the potential for rate cuts next year whilst pushing back on the need for more hikes. This fuelled further upside in Treasuries with notable bull steepening, while it added to the month-end selling pressure for the Dollar.
• SPX +0.10% at 4,554, NDX +0.30% at 16,010, DJIA +0.24% at 35,416, RUT -0.46% at 1,792.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Goolsbee (2023 voter, dove) said of all the pieces of data, housing inflation is most paramount and market-based inflation expectations have been anchored. Goolsbee also suggested that the amount of restrictiveness needs to be less when believed to be on the path to 2% inflation and stated the data will determine how fast they go, according to Reuters and a Marketplace Radio interview.
• Fed's Williams (voter, dovish) said it is encouraging to see a decline in inflation pressure and the Fed has signalled a strong commitment to get inflation back to 2%. Williams added that longer-run inflation expectations have been very stable and that rising inflation expectations uncertainty is not a sign that expectations have unanchored.
• Fed Discount Rate Minutes stated all Federal Reserve banks voted to hold the discount rate in the November 1st meeting.
• US Thanksgiving weekend shoppers crossed 200mln for the first time (prev. 196.7mln) with an average spend of USD 321.41 per consumer (prev. USD 325.44), according to NRF.
• Berkshire Hathaway's Charlie Munger passed away peacefully at the age of 99, according to a statement.

APAC TRADE

EQUITIES

• APAC stocks were mixed after the choppy performance on Wall St where stocks wavered, Treasuries rallied and the Dollar dipped on dovish Fed rhetoric, while the region also digested the RBNZ’s hawkish hold where it kept rates unchanged but signalled risks of a hike.
• ASX 200 was positive with the index helped by encouraging data including better-than-expected Construction Work Done which feeds into next week’s GDP release and after softer monthly CPI all but guaranteed a pause at the December RBA meeting.
• Nikkei 225 swung between gains and losses with early pressure from a firmer currency before the index rebounded off lows, while there were also comments from BoJ Adachi who stuck to the dovish script as he noted it is appropriate to patiently maintain easy policy and if needed, the BoJ will take additional easing steps.
• Hang Seng and Shanghai Comp declined with underperformance in Hong Kong after the recent rises in domestic money market rates and with the PBoC’s open market operations resulting in a net daily drain.
• US equity futures eked marginal gains overnight following the dovish pivot in language from Fed's Waller.
• European equity futures are indicative slightly lower open with Euro Stoxx 50 future -0.1% after the cash market closed down 0.2% yesterday.

FX

• DXY was rangebound and traded on both sides of the 102.50 level after declining yesterday on dovish comments from Fed hawk Waller who suggested the potential for a rate cut next year if inflation was to continue falling for several more months, while it was also reported that Pershing Square’s Bill Ackman is betting that the Fed will cut rates as soon as Q1.
• EUR/USD marginally extended on the prior day’s advances after having reclaimed the 1.1000 status.
• GBP/USD eked mild gains at the 1.2700 handle following the prior day’s advances and hawkish BoE rhetoric.
• USD/JPY initially dipped below 147.00 on yield differentials but bounced off lows after BoJ's Adachi kept to the dovish script.
• Antipodeans were varied with NZD/USD boosted after the RBNZ announcement in which it kept rates unchanged but signalled risks of a future hike, while AUD/USD was contained following mixed data including softer-than-expected monthly CPI.
• PBoC set USD/CNY mid-point at 7.1031 vs exp. 7.1340 (prev. 7.1132).

FIXED INCOME

• 10-year UST futures remained underpinned after the prior day’s bull-steepening owing to the dovish rhetoric from Fed’s Waller which dragged yields to multi-month lows including the 10yr yield which sat beneath 4.30%.
• Bund futures extended on gains above the 132.00 level heading into today's German states CPI data and Bund auction.
• 10-year JGB futures tracked the advances in counterparts amid the BoJ’s presence in the market and dovish comments from board member Adachi.

COMMODITIES

• Crude futures traded rangebound with Brent and WTI crude futures sat above USD 81/bbl and USD 76/bbl, respectively, as price action was muted amid ongoing uncertainty regarding OPEC+ output quotas and with private sector inventory data also uneventful.
• US Energy Inventory Data (bbls): Crude -0.8mln (exp. -0.9mln), Gasoline -0.9mln (exp. +0.2mln), Distillate +2.8mln (exp. +0.4mln), Cushing -0.5mln.
• Spot gold extended on recent gains and briefly climbed above the USD 2050/oz level where it ran into some resistance.
• Copper futures took a breather around the USD 3.80/lb level after climbing yesterday on supply-related disruptions.
• Strike at Las Bambas copper mine in Peru is limited to 48 hours after the labour authority declared the protest inappropriate.
• First Quantum (FM CA) said the Cobre Panama Mine suspended commercial production and is applying a programme of preservation and safe maintenance after the recent court ruling that its contract was unconstitutional.

CRYPTO

• Bitcoin was rangebound and held on to most of the spoils from the recent rally and brief foray above the USD 38,000 level.

NOTABLE ASIA-PAC HEADLINES

• China's Vice Foreign Minister recently met with the EU's external action service deputy secretary and said that China is ready to strengthen communication and coordination with the EU side and make preparations for a China-EU summit before the end of the year. Furthermore, it was stated that the two sides need to grasp the general direction of China-EU relations, uphold mutually beneficial and win-win cooperation, as well as fully respect each other's core interests, according to Reuters.
• Japan's Finance Ministry will raise the assumed interest rate paid on bonds in the government's annual budget proposal for the first time in 17 years in fiscal 2024, reflecting policy shifts by the BoJ that have allowed yields to rise, according to Nikkei.
• BoJ Board Member Adachi said Japan is yet to see a positive wage-inflation cycle become embedded enough and it is appropriate to patiently maintain easy policy. Adachi also stated that if needed, the BoJ will take additional easing steps, while he added that the steps the BoJ took in October to make YCC more flexible are not aimed at laying the groundwork for policy normalisation.
• RBNZ kept the OCR unchanged at 5.50% as expected, while it reiterated that interest rates will need to remain at a restrictive level for a sustained period of time and interest rates are restricting spending in the economy with consumer price inflation declining as is necessary to meet the committee's remit. RBNZ said inflation remains too high and the committee remains wary of ongoing inflationary pressures, as well as noted that demand growth has eased but by less than anticipated and if inflationary pressures were to be stronger than anticipated, the OCR would likely need to increase further. Furthermore, the committee is confident the current OCR level is restricting demand but slightly raised OCR and CPI forecasts with the OCR seen at 5.63% in March 2024 (prev. 5.58%), 5.66% in December 2024 (prev. 5.50%), and 5.56% (prev. 5.36%) in March 2025, while annual CPI is seen at 2.5% by December 2024 (prev. 2.4%).
• RBNZ Governor Orr said in the press conference that they've been adamant on holding rates through next year and noted that the projection shows upward bias to rates but it is not a done deal. Orr also stated the risk to inflation is still more to the upside, while he is nervous that inflation has been outside the band for so long and concerned that longer-term inflation expectations are creeping up.

DATA RECAP

• Australian Weighted CPI YY (Oct) 4.90% vs. Exp. 5.20% (Prev. 5.60%)
• Australian Construction Work Done (Q3) 1.3% vs. Exp. 0.4% (Prev. 0.4%)

GEOPOLITICS

• Israeli negotiators are offering Hamas a further three days of ceasefire through to Sunday morning if the group releases all the remaining women and children they believe it is holding, according to sources close to talks in Qatar cited by The Times.
• G7 Foreign Ministers' joint statement on Israel and Gaza stated that they welcome the release of hostages and the pause in hostilities, while they support a further extension of the pause and future pauses as needed.
• White House's Kirby said they hope to see more Americans released by Hamas and will work to see if they can extend the pause.
• US paused drone flights over Gaza as part of the truce between Israel and Hamas, according to a Pentagon spokesperson.
• US State Department senior official said Turkey’s Foreign Minister told NATO he is working on the ratification of Sweden and gave the likely timeline of a 'few weeks'.

EU/UK

NOTABLE HEADLINES

• The number of businesses set up in the UK in 2022 fell by 7% to 337k as UK business creation was hit by high borrowing costs and weaker demand, according to analysis by FT citing data released last week by the Office of National Statistics.