• APAC stocks began the new month with price action rangebound as markets paused following the November rally amid another busy day of economic releases, while the conflict in Gaza also resumed.
• DXY marginally softened beneath 103.50 as it gave back some of the prior day’s gains, USD/JPY briefly dipped beneath the 148.00 level, and Antipodeans were choppy amid the mixed risk appetite.
• Crude futures remained subdued after the prior day's selling despite the OPEC+ agreement for deeper production cuts with markets underwhelmed given that output cuts are voluntary which raises questions regarding the discipline of individual producers.
• European equity futures are indicative of a higher open with Euro Stoxx 50 future +0.4% after the cash market closed up 0.3% yesterday.
• Looking ahead, highlights include EZ, US, Canadian Manufacturing PMI (Final), UK Nationwide House Prices, French Budget Balance, Italian GDP (Final), Canadian Unemployment Rate, Speeches from Fed’s Powell, Barr, Goolsbee & Cook, ECB's Elderson & Lagarde.
• Click here for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks were mixed during the session and ultimately finished mostly higher to top off this month's gains with a late rally heading into the close on the back of a large buy-side imbalance, while the Nasdaq lagged amid higher yields after hawkish Fed comments.
• SPX +0.38% at 4,567, NDX -0.25% at 15,947, DJIA +1.47% at 35,950, RUT +0.29% at 1,809.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US Treasury Secretary Yellen said there is still more work to do on inflation and economic issues, while she added that the labour market is essentially at full employment and the economy is continuing to grow.

APAC TRADE

EQUITIES

• APAC stocks began the new month with price action rangebound as markets paused following the November rally amid another busy day of economic releases, while the conflict in Gaza also resumed.
• ASX 200 was dragged lower by underperformance in tech and consumer-related sectors amid higher yields.
• Nikkei 225 traded indecisively as encouraging data releases offset the headwinds from early currency strength.
• Hang Seng and Shanghai Comp were gradually pressured following the PBoC’s substantial net liquidity drain, whilst the latter eventually moved into the green amid reports China state-owned capital operating Co. reportedly bought ETFs on Friday, whilst the session also saw a surprise return to expansion territory for the Chinese Caixin Manufacturing PMI.
• US equity futures traded sideways after yesterday's late ramp up heading into the Wall St closing bell and lacked direction overnight amid the cautious mood in Asia, while the resumption of the conflict in Gaza had little impact across asset classes.
• European equity futures are indicative of a higher open with Euro Stoxx 50 future +0.4% after the cash market closed up 0.3% yesterday.

FX

• DXY marginally softened beneath 103.50 as it gave back some of the prior day’s gains which were spurred by hawkish comments from Fed’s Daly who pushed back against rate cuts, while participants look ahead to data and Fed speakers ahead of the blackout period.
• EUR/USD partially nursed the prior day’s CPI-induced losses and just about reclaimed the 1.0900 status.
• GBP/USD clawed back some of its lost ground after the recent failure to hold on to the 1.2700 status.
• USD/JPY briefly dipped beneath the 148.00 level with Japan's currency supported amid a fall in unemployment and with its largest trade union formally agreeing to pay increase demands of at least 5% for next year, although the moves gradually faded.
• Antipodeans were choppy amid the mixed risk appetite and after yesterday’s oil-related pressure which was due to the underwhelming OPEC+ voluntary output cuts, while the surprise expansion in Chinese Caixin Manufacturing PMI provided a brief tailwind.
• PBoC set USD/CNY mid-point at 7.1104 vs exp. 7.1458 (prev. 7.1018).

FIXED INCOME

• 10-year UST futures marginally rebounded after yesterday’s month-end profit-taking although the recovery lacked strength after recent hawkish Fed commentary and a slip beneath 110.00.
• Bund futures traded rangebound but were off the prior day’s lows after support held around the 132.00 level.
• 10-year JGB futures were subdued amid encouraging data and the absence of additional BoJ purchases, while a formal agreement for Japan’s largest trade union regarding a pay hike of at least 5% next year could play a key role when the BoJ decides to exit easy policy.

COMMODITIES

• Crude futures remained subdued after the prior day's selling despite the OPEC+ agreement for deeper production cuts with markets underwhelmed given that output cuts are voluntary which raises questions regarding the discipline of individual producers.
• OPEC Secretariat announced several OPEC+ countries will conduct additional voluntary cuts to the total of 2.2mln BPD (exp. 2.0mln). It was confirmed that Brazil will join OPEC+ from January 2024.
• Saudi Arabia will extend its voluntary cut of 1mln BPD to the end of Q1 2024 with its production to be approx. 9mln BPD and Russia is also to extend its voluntary cut in oil supplies until the end of Q1 2024 with its voluntary supply cut to reach 500k BPD. Kuwait is to make a further 135k BPD OPEC+ oil output cut, while the UAE is to make an additional 160k BPD OPEC+ output cut and Iraq is said to cut its production by 220k BPD in Q1. Conversely, Angola rejected its OPEC quota for 1.11mln BPD and said it will produce 1.18mln BPD, according to Bloomberg. Click here for the detailed headline.
• US is purchasing 2.73mln bbls of oil for the strategic reserve, according to a document cited by Reuters.
• US aims to halve Russia's energy revenue by 2030, while Assistant Secretary of State for Energy Resources Pyatt said Western sanctions will continue for years to come to curb Moscow's war machine, according to FT.
• US President Biden and Angola's President welcomed the launch of a US-Angola energy security dialogue in 2024 during a meeting on Thursday, according to the White House
• US State Department said the US reiterated its pledge to ‘reconsider’ the steps it took to ease sanctions on Venezuela if the latter fails to comply with certain commitments by the end-November deadline, while it added that Venezuela must define steps for lifting bans on opposition candidates and begin the release of Venezuelan political prisoners and wrongfully detained Americans. It was later reported that banned Venezuelan candidates would be allowed to take their cases to a tribunal.
• Spot gold was rangebound near USD 2,040/oz as indecision persisted after the mostly inline PCE price data.
• Copper futures were ultimately flat with price action hampered by the uninspired risk sentiment across Asia-Pac.

CRYPTO

• Bitcoin gradually edged higher and returned to above the USD 38,000 level.

NOTABLE ASIA-PAC HEADLINES

• China state-owned capital operating Co. reportedly bought ETFs on Friday, according to Bloomberg.
• US judge blocked the Montana state ban on Tiktok from taking effect, according to a court order.
• US lawmakers seek a Biden administration investigation into Chinese drone maker Autel Robotics due to national security concerns.
• Japan's largest trade union RENGO said it formally agreed on a 2024 pay hike demand of 5% or more, according to Reuters.

DATA RECAP

• Chinese Caixin Manufacturing PMI Final (Nov) 50.7 vs. Exp. 49.8 (Prev. 49.5)
• Japanese Unemployment Rate (Oct) 2.5% vs. Exp. 2.6% (Prev. 2.6%)
• Japanese Jobs/Applicants Ratio (Oct) 1.30 vs. Exp. 1.29 (Prev. 1.29)
• Japanese Company Profits Y/Y (Q3) 20.1% vs Exp. 13.8% (Prev. 11.6%)
• Japanese Company Sales Y/Y (Q3) 5.0% vs Exp. 4.5% (Prev. 5.8%)

GEOPOLITICS

• Israel's military said that Hamas violated the truce and fired towards Israeli territory, while it has resumed combat against Hamas in Gaza
• Initial reports suggested Israel and Hamas agreed to extend the truce for an eighth day, according to Egyptian officials cited by WSJ. However, there was no official statement made by Israel, Hamas or mediator Qatar.
• Rocket sirens sounded in Israeli areas near the Gaza border and the Israeli military said one launch was detected from Gaza which was intercepted, while Hamas-affiliated media reported that explosions and gunfire were heard in the northern Gaza Strip. Furthermore, Israeli planes were reportedly flying over Gaza and Israeli army vehicles are firing in the northwest of the Gaza Strip, according to a correspondent cited by Al Jazeera.
• US Treasury Department issued new North Korean sanctions targeting 8 individuals and the hacking group Kimsuky, while South Korea imposed sanctions on 11 North Korean individuals, according to the Foreign Ministry.

EU/UK

NOTABLE HEADLINES

• ECB's Nagel said recent inflation developments are encouraging but the ECB cannot be satisfied yet and inflation risks are still on the upside so a further rate hike cannot be ruled out. Nagel also stated that longer-term inflation expectations are still some way from 2% and that a leaner ECB balance sheet is desirable and the reduction can accelerate, while he added it is far too early to discuss rate cuts.
• EU weighs concessions in the US steel feud amid concerns over a Trump return, according to Bloomberg sources.