• Equities post modest gains with the FTSE 100 & DAX 40 outperforming given crude and SAP/Salesforce
• Stateside futures tilt higher in-fitting with the European bias as markets await US PCE data.
• DXY is firmer, leading G10’s lower with clear underperformance in the EUR post cooler than expected CPI.
• Debt futures wane after short squeeze fizzles out; Bunds fade from near 133.00
• Crude extends gains following reports that OPEC+ has a preliminary agreement for additional oil output cuts in excess of 1mln BPD, according to Reuters
• The overnight session saw a slew of key data releases including disappointing Chinese official PMI figures which showed a steeper contraction in China’s factory activity.
• Looking ahead, US Personal Consumption, PCE Price Index, IJC, Dallas Fed PCE, Canadian GDP, Average Weekly Earnings, Australian PMI (Final), Japanese Unemployment Rate, OPEC+ Meeting, Speeches from Fed’s Williams, BoE’s Greene & ECB’s Lagarde.

EUROPEAN TRADE

EQUITIES

• European bourses currently post modest gains, Euro Stoxx 50 +0.2%, despite spending the majority of the morning in the red; with the FTSE 100 outperforming, +0.6%, boosted by broader Crude price action pre-OPEC+; DAX 40 is lifted by SAP, +1.1%, as a read-over from Salesforce earnings.
• European sectors are mixed, though with a positive tilt; Energy significantly outperforms whilst Autos lag.
• Stateside futures, NQ & ES +0.2%, tilt higher in-fitting with the European bias as markets await US PCE data.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
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FX

• Dollar resumes recovery rally with a firm fillip from the Euro post-EZ inflation data and pre-US PCE/IJC.
• DXY towards top of 103.35-102.71 range and EUR/USD hovering near bottom of 1.0910-84 band.
• Pound and Yen suffer contagion, with Cable sub-1.2650 and USD/JPY above 147.50 compared to 1.2700+ and 146.85 at one stage.
• Loonie underpinned between 1.3568-1.3616 parameters as oil rebounds in advance of Canadian GDP metrics.
• PBoC set USD/CNY mid-point at 7.1018 vs exp. 7.1273 (prev. 7.1031).
• Banxico Governor Rodriguez said they do not see a rate cut in the December decision but it is possible they could begin a discussion of rate cuts in meetings early next year.
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• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Debt futures wane after short squeeze fizzles out.
• Bunds hit brakes just ahead of 133.00 as cool EZ inflation data pre-empted.
• Gilts undermined by extra DMO issuance and probing 97.00 to downside.
• T-note near base of 110-05+/14 range awaiting US PCE and IJC.
• UK DMO Gilt Auction Calendar: December 2023-March 2024. Two Gilts (2053 & 2034) to be sold at the additional auctions on 13th & 19th December; The gilts to be issued at auctions on 5, 6 and 12 December 2023 were previously announced on 31 August 2023. The auctions on 13 and 19 December 2023 were added to the calendar at the remit revision published on 22 November 2023
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COMMODITIES

• WTI and Brent, +1.9%, extend gains following reports that OPEC+ has a preliminary agreement for additional oil output cuts in excess of 1mln BPD, according to Reuters; reminder the JMMC commences at 08:30EST and the OPEC+ gathering at 09:30EST.
• Spot Gold is marginally lower, owing to the firmer Dollar, though with overall trade rangebound ahead of US PCE, base metals are mixed/flat following on from weaker Chinese PMI data and the FX influence.
• OPEC "proposal is around Saudi Arabia extending the voluntary cuts of 1 million bpd and then on top of that other states may add additional cuts", via Energy Intel's Bakr
• OPEC+ has a preliminary agreement for additional oil output cuts in excess of 1mln BPD, via Reuters citing a delegate; Talks around an OPEC cut of more than 1mln BPD will depend on how much could be contributed by members states, Energy Intel reports; adds almost all member states appear to be aligned that a deeper cut is needed
• Updated OPEC Timings for today: OPEC meeting at 10:00GMT/05:00EST, JMMC meeting at 13:30GMT/08:30EST, OPEC+ meeting at 14:30GMT/09:30EST, according to EnergyIntel's Bakr
• OPEC/OPEC+ meetings expected to occur as scheduled on Thursday, via Reuters citing sources; OPEC+ continues to discuss additional oil output cut for early-2024
• OPEC+ additional output cut discussions range from 1-2mln BPD, according to Reuters sources
• OPEC+ reportedly mulls new oil production cuts amid the Middle East conflict with Saudi Arabia favouring a curb of up to 1mln BPD, while other members oppose downgrading quotas with Nigeria and Angola resisting a downgrade of their individual quotas and the UAE is also reluctant to cut output. Furthermore, it was stated that a rollover of most existing output curbs is the most likely scenario but talks are continuing, according to WSJ citing delegates.
• Kazakhstan Energy Ministry said oil output was down 34% at Karachaganak oilfield on November 29th due to the Black Sea storm.
• Oil loadings from Novorossiysk and CPC terminals remained shut on Wednesday amid a storm with the November plan for Novorossiysk delayed by over 1mln tons, according to Reuters sources.
• First Quantum (FM CA) announced the suspension of 7,000 contract employees due to force majeure at its Panama mine.
• Click here for more details.
• Click here for the newsquawk OPEC+ primer.

NOTABLE HEADLINES

• German Finance Minister Lindner said Germany faces a EUR 17bln gap in the 2024 budget.
• Dutch NSC party said it is not ready to negotiate on joining the Cabinet with far-right leader Wilders, according to ANP.
• ECB to, as usual, temporarily pause PEPP purchases (reinvestments) in anticipation of significantly lower market liquidity towards the end of this year. The last trading day before 19th December 2023, and purchases will resume on 2nd January 2024.
• BoE Monthly Decision Maker Panel (3rd-17th Nov): One-year ahead CPI inflation expectations decreased to 4.4% in November, down from 4.6% in October, expected year-ahead wage growth remained unchanged at 5.1%. The three-month moving average fell by 0.2 percentage points to 4.6% in the three months to November. Three-year ahead CPI inflation expectations increased 0.1 percentage point to 3.2% in November.
• ECB will discuss QT in December, via Econostream citing an ECB insider; some preference for coming to a QT decision next year as it means less once in 2024. Lagarde will not try to delay the discussion indefinitely. Will not take many meetings to come to a decision on PEPP, given broad agreement currently. PEPP change is expected, liquidity is high; unworried by how markets will take the change.
• ECB’s Panetta says ECB needs to avoid "useless damage" to the economy and financial stability that would end up also putting price stability at risk; ECB may be able to ease monetary conditions if persistently weak output accelerates decline in inflation; Monetary tightening has not yet had full impact, it will continue to dampen demand in the future

DATA RECAP

• UK Lloyds Business Barometer (Nov) 42 (Prev. 39)
• German Retail Sales YY Real (Oct) -0.1% vs. Exp. -2.0% (Prev. -4.3%); MM Real 1.1% vs. Exp. 0.4% (Prev. -0.8%)
• Swiss Retail Sales YY (Oct) -0.1% (Prev. -0.6%, Rev. -1.2%)
• French GDP QQ Final (Q3) -0.1% vs. Exp. 0.1% (Prev. 0.1%)
• French CPI (EU Norm) Prelim YY (Nov) 3.8% vs. Exp. 4.1% (Prev. 4.5%); French CPI Prelim YY NSA 3.4% vs. Exp. 3.70% (Prev. 4.00%)
• French Consumer Spending MM (Oct) -0.9% vs. Exp. -0.2% (Prev. 0.2%)
• Swiss KOF Indicator (Nov) 96.7 vs. Exp. 96.6 (Prev. 95.8, Rev. 95.1)
• German Unemployment Rate SA (Nov) 5.9% vs. Exp. 5.8% (Prev. 5.8%); German Unemployment Change SA 22.0k vs. Exp. 22.0k (Prev. 30.0k)
• German Unemployment Total SA (Nov) 2.702M (Prev. 2.678M); NSA 2.606M (Prev. 2.607M)
• Polish CPI Flash YY (Nov) 6.50% (Prev. 6.60%); MM 0.70% (Prev. 0.30%)
• Italian Unemployment Rate (Oct) 7.8% vs. Exp. 7.5% (Prev. 7.4%, Rev. 7.6%)
• EU HICP Flash YY (Nov) 2.4% vs. Exp. 2.7% (Prev. 2.9%); EU HICP-X F&E Flash YY 4.2% (Prev. 5.0%); EU HICP-X F,E,A&T Flash YY 3.60% vs. Exp. 3.90% (Prev. 4.20%); EU HICP-X F, E, A, T Flash MM -0.60% (Prev. 0.20%)
• EU Unemployment Rate (Oct) 6.5% vs. Exp. 6.5% (Prev. 6.5%)
• Italian CPI (EU Norm) Prelim YY (Nov) 0.7% vs. Exp. 1.1% (Prev. 1.8%); Prelim MM -0.4% vs. Exp. -0.1% (Prev. 0.1%)

NOTABLE US HEADLINES

• Salesforce (CRM) - Better than expected earnings and upbeat guidance helped CRM shares surge almost 9% in US afterhours trading. Q3 adj. EPS 2.11 (exp. 2.06), Q3 revenue USD 8.72bln (exp. 8.72bln). Q3 professional services and other revenue USD 579mln (exp. 621.5mln), Q3 adj. income from operations USD 2.72bln (exp. 2.64bln), Q3 adj. operating margin 31.2% (exp. 30.4%), Q3 FCF 1.37bln (exp. 898.3mln). Sees Q4 revenue between USD 9.18-9.23bln (exp. 9.22bln), and sees Q4 adj. EPS between 2.25-2.26 (exp. 2.17); raises its FY24 EPS outlook to between USD 8.18-8.19 (prev. 8.04-8.06, exp. 8.06), and sees FY24 revenue between USD 34.75-34.8bln (prev. 34.7-34.8bln, exp. 34.80bln). Shares seen +9% pre-market
• Click here for the US Early Morning Note.

GEOPOLITICS

ISRAEL-HAMAS

• Israeli military said the truce will continue in light of mediators' efforts to release more hostages and Hamas also confirmed that it agreed to extend the truce for a seventh day, according to Reuters.
• Sources in Israel's war council earlier noted that Hamas's list of the new batch of hostages to be released did not meet the agreed criteria and Israel officials warned fighting will resume if Hamas does not present a new list by 07:00 local time (05:00GMT/00:00EST), while Hamas confirmed Israel rejected its proposed hostage release and it told its fighters to be ready for renewed battles if the truce with Israel was not extended, according to Al Jazeera, Al Arabiya and Reuters.
• Israeli prison service announced it released 30 Palestinians in the sixth round of Gaza truce swaps on Wednesday.
• UK Defence Minister Shapps is sending a warship to the Gulf region amid fears of a ramp up in Iranian missile attacks. The warship will protect against drone threats and ensure safe flow of trade, according to the Telegraph.
• China issued a position paper on the Israeli-Palestinian conflict which stated that the UN Security Council should respond to the general call of the international community for a comprehensive ceasefire to be put in place to stop the fighting. Furthermore, China's Foreign Minister Wang Yi said a spillover of the Israeli-Palestinian conflict to the entire Middle East region should be avoided by urging countries that have an impact on the parties to play an active role, while he added that China is to send another batch of emergency humanitarian supplies to Gaza to alleviate the humanitarian situation.
• "Sirens in the Upper Galilee in northern Israel after a march crept in from southern Lebanon", according to Al Arabiya
• United Nations Interim Force In Lebanon says Israel retaliated to cross-border fire from Lebanon
• "Estimates in Israel indicate that tomorrow is the last day of the truce in Gaza", according to Al Arabiya citing Israeli Press Yedioth Ahronoth

North Korea

• North Korean leader Kim inspected satellite photos of a US naval base in San Diego and Kadena air base in Japan, while North Korea said it will never sit face-to-face with the US for negotiations, according to KCNA.

CRYPTO

• Bitcoin, USD 37.7k, is marginally weaker whilst Ethereum teeters around the unchanged mark; with specifics light for Crypto, though action influenced by Dollar strength.

APAC TRADE

• APAC stocks were mixed and indecisively capped off this month’s notable gains as the Israel-Hamas truce hung in the balance before the announcement of a last-minute one-day extension, while participants also digested a slew of key data releases including disappointing Chinese official PMI figures.
• ASX 200 was choppy after mixed data in which Building Approvals topped forecast and Private Capital Expenditure missed estimates.
• Nikkei 225 swung between gains and losses amid recent currency strength and with better-than-expected Industrial Production offset by softer Retail Sales.
• KOSPI was just about kept afloat following the unsurprising decision by the BoK to keep rates unchanged and noted that it will maintain a restrictive policy stance for a sufficiently long period of time.
• Hang Seng and Shanghai Comp were indecisive with only brief pressure seen after the PMI data showed a steeper contraction in China’s factory activity which raises the prospects for further supportive measures.

NOTABLE HEADLINES

• Taiwan is closely monitoring China's respiratory illnesses outbreak and will adjust epidemic prevention measures when needed.
• BoK kept its base rate unchanged at 3.50%, as expected, with the decision unanimous and four out of the seven board members said the door to a rate hike should remain open. BoK said uncertainties to the growth path are high with the economy facing heightened geopolitical risks and restrictive monetary policies abroad, while it will maintain a restrictive policy stance for a "sufficiently long period" of time (prev. "considerable time") until the board is confident inflation will converge to the target level. Furthermore. Governor Rhee said the current policy rate is sufficiently restrictive and that restrictive monetary policy could stay for longer than six months.
• Hong Kong Exchange consultation paper on severe weather: severe conditions will no longer have automatic consequential impact on the continuity of trading

DATA RECAP

• Chinese NBS Manufacturing PMI (Nov) 49.4 vs. Exp. 49.7 (Prev. 49.5); Non-Manufacturing PMI (Nov) 50.2 vs. Exp. 51.1 (Prev. 50.6)
• Chinese Composite PMI (Nov) 50.4 (Prev. 50.7)
• Japanese Industrial Production MM (Oct P) 1.0% vs. Exp. 0.8% (Prev. 0.5%)
• Japanese Retail Sales YY (Oct) 4.2% vs. Exp. 5.9% (Prev. 5.8%, Rev. 6.2%)
• Australian Building Approvals MM (Oct) 7.5% vs. Exp. 2.0% (Prev. -4.6%, Rev. -4.0%)
• Australian Capital Expenditure (Q3) 0.6% vs. Exp. 1.0% (Prev. 2.8%); Private Capital Expenditure 2023-2024 (AUD)(Est. 4) 171.2B (Prev. 157.8B)
• New Zealand ANZ Business Confidence (Nov) 30.8 (Prev. 23.4); Activity Outlook (Nov) 26.3 (Prev. 23.4)