• APAC stocks were mostly higher with risk sentiment underpinned by softer yields.
• European equity futures are indicative of a modestly firmer open with Euro Stoxx 50 future +0.4% after the cash market closed up 0.9% yesterday.
• DXY lingers just below 104, EUR/USD languishes beneath 1.08, antipodeans benefit from the risk appetite.
• 10-year UST futures marginally pulled back and Crude futures lacked direction after yesterday's whipsawing.
• Looking ahead highlights include EZ, German, French, Italian & UK Construction PMI, German Industrial Orders, EZ Retail Sales, US MBAs, ADP National Employment, International Trade, Canadian Trade, NBP & BoC Policy Announcements, BoE's FSR, Supply from UK.

US TRADE

EQUITIES

• US stocks were choppy and the major indices finished little changed whilst the Russell 2k unwound some of its recent outperformance as markets digested mixed data releases including a tumble in JOLTS job opening which spurred a dovish reaction but was offset by stronger-than-expected ISM Services, while treasuries bull-flattened following recent dovish central bank updates.
• SPX -0.06% at 4,567, NDX +0.24% at 15,877, DJIA -0.22% at 36,124, RUT -1.38% at 1,856.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US Treasury Secretary Yellen said economists who predicted that taming inflation would require very high unemployment are eating their words and she is not seeing the usual signs of a weakening labour market that would bring fears of a recession. Yellen said US growth will come down but she is not seeing weakness on the spending side of the economy, while she added that demand continues to be adequate to power the US economy forward at trend-growth-like rates.
• SAG-AFTRA actors union ratified a new three-year contract with Hollywood studios, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks were mostly higher with risk sentiment underpinned by softer yields as market focus remained on data releases and with the recent drop in US job openings stoking hopes for Fed rate cuts.
• ASX 200 saw broad gains across sectors amid lower yields and with markets unfazed by mixed GDP data.
• Nikkei 225 climbed back above 33,000 as the 10yr JGB yield declined to its lowest since August.
• Hang Seng and Shanghai Comp were somewhat varied as the Hong Kong benchmark conformed to the overall upbeat mood, while the mainland lagged after the PBoC continued to drain liquidity and Moody’s revised China’s credit outlook to negative.
• US equity futures (ES +0.3%) notched marginal gains amid a rally across most of the Asia-Pacific bourses.
• European equity futures are indicative of a modestly firmer open with Euro Stoxx 50 future +0.4% after the cash market closed up 0.9% yesterday.

FX

• DXY stalled near the 104.00 level but held on to most of the prior day’s advances in the aftermath of mixed data releases in which strong ISM Services data offset the lowest job openings in more than two years, while participants await further employment data.
• EUR/USD languished beneath 1.0800 with the single currency not helped by recent dovish ECB rhetoric.
• GBP/USD traded rangebound and partially nursed some losses to just about reclaim the 1.2600 status.
• USD/JPY kept afloat alongside softer Japanese yields and with BoJ Deputy Governor Himino sticking to the familiar BoJ script whereby he noted the BoJ will patiently maintain easy policy until a sustained and stable achievement of the price target is in sight.
• Antipodeans clawed back some of this week’s losses with the rebound facilitated by the positive risk appetite and after AUD/USD found a floor around 0.6550, while Chinese major state-owned banks were seen selling dollars in the market again for a second day.
• PBoC set USD/CNY mid-point at 7.1140 vs exp. 7.1476 (prev. 7.1127).
• China's major state-owned banks were seen selling dollars for yuan in the onshore spot FX market, according to sources cited by Reuters.

FIXED INCOME

• 10-year UST futures marginally pulled back after stalling near the 111.00 level and following recent bull-flattening that was spurred by dovish central bank updates and softening US labour market data.
• Bund futures took a breather after it recently extended above 134.00 and printed their best levels in 6 months.
• 10-year JGB futures tracked the advances in global counterparts to above the 147.00 level but with further upside capped by a quiet calendar and the absence of additional BoJ purchases.

COMMODITIES

• Crude futures lacked direction after yesterday's whipsawing and amid headwinds from recent dollar strength, while a slight surprise build in the private sector headline crude inventories also kept a tight rein on price action.
• US Energy Inventory Data (bbls): Crude +0.6mln (exp. -1.4mln), Gasoline +2.8mln (exp. +1.0mln), Distillate +0.9mln (exp. +1.5mln), Cushing +4.3mln.
• Saudi Arabia set January Arab light crude OSP to Asia at Oman/Dubai + USD 3.50/bbl, to NW Europe at ICE Brent + USD 2.90/bbl and to US at ASCI + USD 7.15/bbl, according to Aramco/pricing document cited by Reuters.
• Venezuelan President Maduro said he would authorise oil exploration in an area around the Esequibo River which is a disputed territory with Guyana. It was also that US official Nichols said they are seeing Venezuela's illicit oil trade move back into the formal sector.
• Spot gold traded sideways with the precious metal contained to a tight range around USD 2020/oz.
• Copper futures marginally gained with prices helped by the mostly constructive mood during Asian trade.

CRYPTO

• Bitcoin took a breather following the recent price surge that briefly lifted prices above USD 44,000.
• Japan is to make long-term corporate crypto holdings tax-exempt, according to Nikkei.

NOTABLE ASIA-PAC HEADLINES

• Chinese official Liu said the Biden-Xi meeting cannot solve US-China problems and domestic US politics could pose problems for US-China ties, while Liu added US policy towards China is unlikely to change in the near future and the outcome of Taiwan elections may affect US-China relations.
• Fitch said there are no further updates after it affirmed China's A+ rating with a stable outlook in August and S&P also said there was no change to China's credit rating or outlook, according to Reuters.
• BoJ Deputy Governor Himino said the BoJ will patiently maintain easy policy until a sustained and stable achievement of the price target is in sight, while he added that Japan's financial system is likely resilient enough to weather stress from transition to higher interest rates. Furthermore, Himino stated they must make appropriate decisions on the timing of the exit and procedure by scrutinising wage and inflation developments.

DATA RECAP

• Australian Real GDP QQ SA (Q3) 0.2% vs. Exp. 0.4% (Prev. 0.4%)
• Australian Real GDP YY SA (Q3) 2.1% vs. Exp. 1.8% (Prev. 2.1%)

GEOPOLITICS

• Hamas official said there will be no negotiations or exchange of detainees until the aggression against Gaza stops.
• US President Biden will participate in a meeting with G7 leaders today and Ukrainian President Zelensky will also join the G7 leaders video summit, according to Reuters.
• US Treasury Secretary Yellen said the US would be responsible for Ukraine's defeat if Biden's funding request fails to win approval by Congress and noted US aid to Ukraine is essential to keep the government operating and maintain IMF financial support to Ukraine.

EU/UK

NOTABLE HEADLINES

• EU finance ministers are discussing debt reduction targets as part of a fiscal overhaul which could include a fiscal buffer of 1.5% of GDP, according to Bloomberg.